Centene tops profit estimates on strength in ACA business

Centene Corp.’s quarterly earnings beat analysts’ estimates due to increased membership and growth in its Affordable Care Act business, prompting the company to raise its 2017 revenue forecast.

The results come at an uncertain time for the health insurance industry, with President Donald Trump earlier this month saying that his administration would stop paying billions of dollars in subsidies that help insurers give discounts to low-income households.

Since then, Trump has alternately supported, and dismissed, an effort by Republican and Democratic senators that would reinstate the subsidies for two years until a broader replacement to the ACA, commonly known as Obamacare, can be negotiated.

The Clayton-based health insurer said it expects an impact of 7-12 cents per share in the fourth quarter if the subsidies are not received.

Despite the uncertainty around subsidies, Centene seems full steam ahead on ACA, increasing marketing and business expansion costs, Piper Jaffray analyst Sarah James said. “Our county level analysis gives us confidence Centene will remain profitable in the 2018 exchanges.”

Read more: St. Louis Post-Dispatch


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