As select insurers in recent weeks posted first-quarter 2021 earnings, the positive impact of lower-than-normal utilization, rising COVID-19 vaccination rates and increased Medicaid, Medicare and/or exchange enrollment was slightly tempered by post-pandemic unknowns, especially for those with a heavy Medicaid presence, AIS Health reported.
Centene Corp. on April 27 posted adjusted earnings per share (EPS) of $1.63, up from 86 cents per share in the first quarter of 2020, and revenue of $30 billion, compared with $26 billion a year ago. That 15% increase was due in part to the acquisition of WellCare, which was completed on Jan. 23, 2020, and the ongoing suspension of states’ eligibility redeterminations, which Centene does not expect to resume until at least Aug. 1. Revenue growth, however, was partly offset by an overall drop in exchange membership, state rate and risk-sharing actions, and the repeal of the health insurer fee (HIF) for 2021, explained Executive Vice President and Chief Financial Officer Jeff Schwaneke during an April 27 call to discuss quarterly earnings.
Centene’s medical loss ratio (MLR) of 86.8% came in higher (worse) than analysts’ expectations but was an improvement over 88.0% reported for the first quarter of 2020.
In an April 27 note to investors, Jefferies analyst David Windley pointed out that Centene’s first quarter results were “disappointing relative to other MCO reports.”
Reporting earnings the next day, Molina Healthcare, Inc. on April 28 beat Wall Street expectations with an adjusted EPS of $4.44 — a 47% increase over the first quarter of 2020 and the highest earnings posted by the five MCOs that had reported at that time. The firm also posted an improved MLR of 86.8% and revenue growth of 43% to $6.5 billion.
Meanwhile, Anthem, Inc. on April 21 posted an MLR of 85.6%, up from 84.2% in the first quarter of 2020 due to COVID-related costs such as testing and vaccine administration and to a lesser extent, the HIF repeal. Adjusted EPS rose 8% from the prior-year quarter to $7.01.
Strong membership growth in the government business was led by Medicaid. When asked about potential changes to Medicaid enrollment going forward, President and CEO Gail Boudreaux during an April 21 call said Anthem expects that reverification will continue to be on hold throughout 2021. Despite its predicted return in 2022, Anthem doesn’t envision a “cliff event” and sees states thinking about “continuing to keep people on the Medicaid rolls,” she said.