Michael Neidorff (Photo: Scott Eells/Bloomberg)
Michael Neidorff, the chief executive officer of Centene Corp., told securities analysts today that the health insurer can manage through COVID-19 pandemic uncertainty, and is managing through a great deal of uncertainty.
Neidorff warned the analysts that predicting what the rest of the year, or next year, will be like is difficult.
"We've never seen it like this before," Neidorff said. "It's difficult to model a situation when you have no prior experience. And the biggest issue I see is, for example, unemployment, it could reach as high as 20%. It's around 15% right now. That's depression level."
Centene will do well, but "it's going to be lumpy," Neidorff said.
Resources
- A recording of Centene's earnings call is available here.
- An article about Centene's fourth-quarter earnings is available here.
Centene is a St. Louis-based health insurer that has specialized in managing Medicaid plans and other types of public health plans.
It now has a large Affordable Care Act public exchange plan operation. It acquired Health Net, a California-based commercial health insurer, from UnitedHealth Group Inc. in 2016, and it completed the acquisition of WellCare Health Plans Inc., a Medicare plan issuer, in January.
Centene is on track to generate about $110 billion in revenue for all of 2020.
Neidorff and other Centene executives talked about COVID-19, and other matters, during a conference call the company held to go over its earnings for the first quarter.
Earnings
Centene is reporting $46 million in net income for the first quarter on $26 billion in revenue, compared with $519 million in net income on $18 billion in revenue for the first quarter of 2019.
Results were affected by New York state's delay in paying Centene $700 million in premiums.
Executives said the company has $2 billion in cash on hand and about $1.4 billion available through a revolving credit facility, giving it access to about $3.5 billionin immediate liquidity.
The company ended the quarter providing or administering health coverage for 24 million people, up from 15 million people a year earlier.
Here's what happened to key types of enrollment between the first quarter of 2019 and the latest quarter:
- Medicare plans: 976,700 (up from 393,900)
- U.S. commercial major medical insurance: 2.7 million (up from 2.5 million)
- ACA exchange plans: 2.2 million (up from 2 million)
- Medicaid and similar programs: 12 million (up from 8.6 million)
- International: 599,900 (up from 151,600)
Pandemic Response
Like other life and health insurer CEOs who have spoken at analyst calls this month, Neidorff took time during the call to express his pride in the efforts his company's employees have made to keep operations moving in the face of shelter-in-place rules.
The company was able to get 66,000 employees, or about 90% of all company employees, working at home within three days, Neidorff said.
Neidorff said Centene is donating 1 million meals a month for 12 months to feed people in communities all over the country; providing 50,000 gift cards to be used to purchase essential health care and educational items; and giving medical personnel personal protective equipment and support services.
