Centene Posts Strong 1Q15 Results (Part 4 of 5)
Dual eligible enrollments
By the end of 1Q15, Centene (CNC) offered health insurance services to about 184,000 dual eligible members. Dual eligible members involve poor beneficiaries who are eligible for both Medicare and Medicaid insurance. The health insurance industry (XLV) serves dual eligibles through ABD (aged, blind, and disabled), LTC (long-term care), Medicare, and dual eligible demonstration programs.
Demonstration programs
Beginning in 2014, state governments initiated demonstration programs to provide health insurance to dual eligibles. Centene serves about 12,600 members through these demonstration programs.
In 1Q15, Centene entered into a contract with South Carolina and Texas to participate in the states’ demonstration program for dual enrollments. Since 2014, the company has served these programs in Illinois, Ohio, Michigan, and Florida. Centene’s average opt-out rate, or the rate at which dual eligibles in the company’s market opt out of the demonstration programs, has been in line with those of its peers such as Humana (HUM), Cigna (CI), and UnitedHealth Group (UNH). Opt-out, however, has affected Centene’s dual enrollments mainly in Ohio, where the rate has been around 30%.
ABD enrollments
Dual eligibles served by Centene through the ABD program increased by 54.7%, from 72,800 enrollments in 1Q14 to 112,600 enrollments in 1Q15. Effective April 2015, Centene began serving ABD beneficiaries in Indiana under the Hoosier Care Connect Program.
LTC enrollments
LTC accounts for about 33% of Medicaid’s total expenditures. LTC is mainly comprised of nursing home care and home healthcare. Centene offered LTC services to 52,000 dual members in 1Q15, an increase of 25.9% from 41,300 members served in 1Q14. The long-term care program, however, is cost intensive and thus leads to lower profits for Centene.
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