Centene Corporation Reports 2019 Third Quarter Results
In summary, the 2019 third quarter results were as follows:
Total revenues (in millions) |
$ |
18,976 |
||
Health benefits ratio |
88.2 |
% |
||
SG&A expense ratio |
8.9 |
% |
||
GAAP diluted EPS |
$ |
0.23 |
||
Adjusted Diluted EPS (1) |
$ |
0.96 |
||
Total cash flow used in operations (in millions) (2) |
$ |
(99) |
||
(1) A full reconciliation of Adjusted Diluted EPS is shown beginning on page seven of this release. |
||||
(2) Consistent with previous years, the third quarter cash flow was negatively impacted by approximately |
"We are pleased with our third quarter results which reflect growth in our marketplace business, Medicaid business, and new programs, demonstrating the benefits of our diversification strategy on our healthcare enterprise. Looking ahead, we will continue to further enhance our leadership position in government-sponsored healthcare," said
As previously announced, Centene and WellCare agreed to combine in a transaction that will create a premier healthcare enterprise focused on government-sponsored healthcare programs and a leader in Medicaid, Medicare and the
During the third quarter of 2019,
Third Quarter Highlights
September 30, 2019 managed care membership of 15.3 million, an increase of 884,200 members, or 6%, overSeptember 30, 2018 .- Total revenues for the third quarter of 2019 of
$19.0 billion , representing 17% growth compared to the third quarter of 2018. - Health benefits ratio (HBR) of 88.2% for the third quarter of 2019, compared to 86.3% in the third quarter of 2018.
- Selling, general and administrative (SG&A) expense ratio of 8.9% for the third quarter of 2019, compared to 12.6% for the third quarter of 2018.
- Adjusted SG&A expense ratio of 8.8% for the third quarter of 2019, compared to 10.0% for the third quarter of 2018.
- Diluted EPS for the third quarter of 2019 of
$0.23 , compared to$0.05 for the third quarter of 2018, an increase of 360%. - Adjusted Diluted EPS for the third quarter of 2019 of
$0.96 , compared to$0.89 for the third quarter of 2018, an increase of 8%. - Operating cash flow of
$(99) million for the third quarter of 2019 driven by the payment of approximately$1.0 billion related to the 2018 risk adjustment to CMS and minimum MLR programs, partially offset by net earnings. Cash flow provided by operations for the nine months endedSeptember 30, 2019 was$2.1 billion .
Other Events
- In
October 2019 ,Centene's Board of Directors approved a$500 million increase to the Company's stock repurchase program. Under the increased stock repurchase program, the Company will be in a position to repurchase shares or pay down debt with the proceeds from divestitures related to the WellCare acquisition. - In
October 2019 ,Centene , Walgreens and RxAdvance announced a strategic partnership to introduce an innovative model for pharmacy management that aims to increase transparency, enhance customer experience and ultimately result in better health outcomes at lower costs. The partnership builds upon an existingCentene and Walgreens relationship, leveraging Walgreens trusted retail pharmacy expertise andCentene's national leadership in providing comprehensive health care services to the underserved, while also utilizing RxAdvance's innovative pharmacy benefit management model powered by its Collaborative PBM Cloud platform. - In
October 2019 ,Centene's North Carolina joint venture,Carolina Complete Health , was awarded an additional service area to provide Medicaid managed care services in Region 4. With the addition of this new Region,Carolina Complete Health will provide Medicaid managed care services in three contiguous regions: Region 3, 4 and 5. The new three-year contract is expected to commence inFebruary 2020 . - In
September 2019 ,Centene announced the appointment ofDavid Thomas to Executive Vice President of Markets. - In
September 2019 ,Centene and WellCare announced that, in connection with the previously announced merger agreement betweenCentene and WellCare, a subsidiary of WellCare has entered into a definitive agreement under which Anthem, Inc. (Anthem) will acquire WellCare'sMissouri and Nebraska Medicaid plans. The closing of the transaction with Anthem is subject toU.S. federal antitrust clearance, receipt ofMissouri andNebraska regulatory approvals and other customary closing conditions, as well as the closing of the Centene-WellCare transaction. - In
September 2019 ,Centene and theNational Foster Parent Association (NFPA) announced a partnership to bring online trainings to foster caregivers nationwide via the NFPA's onlineTraining Institute . The trainings will address a variety of topics such as the role foster caregivers play in mentoring birth parents and internet safety. - In
September 2019 ,Centene , in partnership withFeeding America , announced the launch of the "Food for Today and Food for Tomorrow" resource development initiative. The program will equip network food banks andCentene health plans with best practice guidelines for meeting the needs of individuals experiencing food insecurity. The cross-sector partnership will enable impactful collaboration on food security initiatives within communities across the country. - In
September 2019 ,Centene's New Hampshire subsidiary, NH Healthy Families, began operating under a new five-year contract to continue to provide service to Medicaid enrollees statewide. - In
August 2019 ,Centene announced that it is expanding its offerings in the 2020Health Insurance Marketplace .Centene is expanding its presence in ten existing markets:Arizona ,Florida ,Georgia ,Kansas ,North Carolina ,Ohio ,South Carolina ,Tennessee ,Texas andWashington . - In
July 2019 ,Centene's Iowa subsidiary,Iowa Total Care, Inc. , began operating under a new statewide contract for the IA Health Link Program. - In
July 2019 , Centurion began operating under a contract to provide comprehensive healthcare services to inmates housed inArizona's state prison system. - In
July 2019 , Centurion began operating under a re-awarded contract to continue the provision of mental and dental health services to theGeorgia Department of Correction's state prison facilities.
Accreditations & Awards
- In
October 2019 ,Centene received a National Health Information Award for The Measured Dose, which was written forCentene's OpiEnd program to be used for adult members with high Opioid Risk Classification Algorithm (ORCA) scores. - In
August 2019 , FORTUNE announcedCentene's position of #7 in its fifth-annual "Change the World" list of the top 52 companies that have made an important social or environmental impact. Companies are recognized for, and competitively ranked on, innovative strategies that positively impact the world.
Membership
The following table sets forth our membership by line of business:
|
|||||
2019 |
2018 |
||||
Medicaid: |
|||||
TANF, CHIP & |
7,623,400 |
7,260,500 |
|||
ABD & LTSS |
1,045,700 |
964,200 |
|||
|
73,300 |
455,900 |
|||
Total Medicaid |
8,742,400 |
8,680,600 |
|||
Commercial |
2,388,500 |
2,062,500 |
|||
Medicare (1) |
404,500 |
417,400 |
|||
International |
462,400 |
— |
|||
Correctional |
187,200 |
150,900 |
|||
Total at-risk membership |
12,185,000 |
11,311,400 |
|||
TRICARE eligibles |
2,860,700 |
2,858,900 |
|||
Non-risk membership |
227,800 |
219,000 |
|||
Total |
15,273,500 |
14,389,300 |
|||
(1) |
Membership includes Medicare Advantage, Medicare Supplement, Special Needs Plans, and Medicare-Medicaid Plans (MMP). |
The following table sets forth additional membership statistics, which are included in the membership information above:
|
|||||
2019 |
2018 |
||||
Dual-eligible (2) |
629,600 |
590,300 |
|||
|
1,860,200 |
1,529,400 |
|||
Medicaid Expansion |
1,359,300 |
1,237,800 |
|||
(2) |
Membership includes dual-eligible ABD & LTSS and dual-eligible Medicare membership in the table above. |
Revenues
The following table sets forth supplemental revenue information for the three months ended
2019 |
2018 |
% Change |
|||||||||
Medicaid |
$ |
12,859 |
$ |
10,909 |
18 |
% |
|||||
Commercial |
3,670 |
3,125 |
17 |
% |
|||||||
Medicare (3) |
1,429 |
1,363 |
5 |
% |
|||||||
Other |
1,018 |
785 |
30 |
% |
|||||||
Total Revenues |
$ |
18,976 |
$ |
16,182 |
17 |
% |
|||||
(3) |
Medicare includes Medicare Advantage, Medicare Supplement, Special Needs Plans, and MMP. |
Statement of Operations: Three Months Ended
- For the third quarter of 2019, total revenues increased 17% to
$19.0 billion from$16.2 billion in the comparable period in 2018. The increase over the prior year was primarily due to growth in theHealth Insurance Marketplace business, expansions and new programs in many of our states in 2018 and 2019, particularlyArkansas ,Illinois ,Iowa ,New Mexico andPennsylvania , and our recent acquisitions inSpain . These increases were partially offset by the health insurer fee moratorium in 2019. - Sequentially, total revenues increased 3% from the second quarter of 2019, primarily due to the commencement of the
Iowa health plan inJuly 2019 and approximately$440 million of at-risk, state directed payments from the state ofCalifornia . - HBR of 88.2% for the third quarter of 2019 represents an increase from 86.3% in the comparable period in 2018. The increase was due to the following items:
Q3 2018 HBR |
86.3 |
% |
The IHSS program reconciliation, which reduced the HBR for the third quarter of 2018 by approximately 100 basis points. |
1.0 |
% |
The health insurer fee moratorium, which increased the HBR for the third quarter of 2019 by approximately 50 basis points. |
0.5 |
% |
Approximately |
0.3 |
% |
Other |
0.1 |
% |
Q3 2019 HBR |
88.2 |
% |
- HBR increased sequentially from 86.7% in the second quarter of 2019. The increase was primarily due to the normal seasonality in the
Health Insurance Marketplace business and the previously mentioned at-risk, state directed payments. - The SG&A expense ratio was 8.9% for the third quarter of 2019, compared to 12.6% in the third quarter of 2018, primarily due to lower acquisition related costs, which decreased the ratio by approximately 250 basis points. The Adjusted SG&A expense ratio was 8.8% for the third quarter of 2019, compared to 10.0% in the third quarter of 2018. Both ratios for the third quarter of 2018 included 70 basis points related to the
Veterans Affairs contract expiration and the commitment to our charitable foundation. The ratios also benefited from the previously mentioned at-risk, state directed payments and lower variable compensation costs for programs indexed to our stock performance in the third quarter of 2019. - During the third quarter of 2019,
Centene recorded$271 million , or$0.57 per diluted share, of non-cash goodwill and intangible asset impairment. Substantially all of the impairment is associated with our USMM business and was identified as part of our quarterly review procedures, which included an analysis of new information related to our shared savings demonstration programs, slower than expected penetration of the physician home health business model into our Medicaid population, and the related impact to revised forecasts. The business continues to generate positive cash flows and plays an important role in care management; however, it has fallen short of our overall performance expectations. - The effective tax rate was 45.1% for the third quarter of 2019, compared to 33.3% in the third quarter of 2018. The increase in the effective tax rate was primarily driven by the non-deductibility of a portion of our non-cash goodwill and intangible impairment, offset by the impact of the health insurer fee moratorium.
Balance Sheet
At
In
In
Outlook
The Company's updated annual guidance for 2019 is as follows:
Full Year 2019 |
|||||||||
Low |
High |
||||||||
Total revenues (in billions) |
$ |
73.6 |
$ |
74.2 |
|||||
GAAP diluted EPS |
$ |
3.04 |
$ |
3.21 |
|||||
Adjusted Diluted EPS (1) |
$ |
4.29 |
$ |
4.49 |
|||||
HBR |
86.6 |
% |
87.1 |
% |
|||||
SG&A expense ratio |
9.2 |
% |
9.7 |
% |
|||||
Adjusted SG&A expense ratio (2) |
9.1 |
% |
9.6 |
% |
|||||
Effective tax rate |
26.0 |
% |
27.5 |
% |
|||||
Diluted shares outstanding (in millions) |
420.5 |
421.5 |
|||||||
(1) |
Adjusted Diluted EPS excludes estimated amortization of acquired intangible assets of |
(2) |
Adjusted SG&A expense ratio excludes estimated acquisition related expenses of |
Conference Call
As previously announced, the Company will host a conference call
Investors and other interested parties are invited to listen to the conference call by dialing 1-877-883-0383 in the
A webcast replay will be available for on-demand listening shortly after the completion of the call for the next twelve months or until
Non-GAAP Financial Presentation
The Company is providing certain non-GAAP financial measures in this release, as the Company believes that these figures are helpful in allowing investors to more accurately assess the ongoing nature of the Company's operations and measure the Company's performance more consistently across periods. The Company uses the presented non-GAAP financial measures internally to allow management to focus on period-to-period changes in the Company's core business operations. Therefore, the Company believes that this information is meaningful in addition to the information contained in the GAAP presentation of financial information. The presentation of this additional non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.
Specifically, the Company believes the presentation of non-GAAP financial information that excludes amortization of acquired intangible assets and acquisition related expenses, as well as other items, allows investors to develop a more meaningful understanding of the Company's performance over time. The tables below provide reconciliations of non-GAAP items ($ in millions, except per share data):
Three Months Ended |
Nine Months Ended |
||||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||
GAAP net earnings attributable to |
$ |
95 |
$ |
19 |
$ |
1,112 |
$ |
659 |
|||||||
Amortization of acquired intangible assets |
65 |
65 |
194 |
149 |
|||||||||||
Acquisition related expenses |
25 |
401 |
66 |
423 |
|||||||||||
Other adjustments (1) |
271 |
— |
271 |
30 |
|||||||||||
Income tax effects of adjustments (2) |
(54) |
(110) |
(95) |
(140) |
|||||||||||
Adjusted net earnings |
$ |
402 |
$ |
375 |
$ |
1,548 |
$ |
1,121 |
(1) |
Other adjustments include the 2019 non-cash goodwill and intangible asset impairment of |
(2) |
The income tax effects of adjustments are based on the effective income tax rates applicable to each adjustment. |
Three Months Ended |
Nine Months Ended |
Annual Guidance |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||||
GAAP diluted EPS attributable to |
$ |
0.23 |
$ |
0.05 |
$ |
2.65 |
$ |
1.68 |
|
||||||||
Amortization of acquired intangible assets (1) |
0.12 |
0.12 |
0.35 |
0.30 |
|
||||||||||||
Acquisition related expenses (2) |
0.04 |
0.72 |
0.12 |
0.83 |
|
||||||||||||
Other adjustments (3) |
0.57 |
— |
0.57 |
0.06 |
0.62 |
||||||||||||
Adjusted Diluted EPS |
$ |
0.96 |
$ |
0.89 |
$ |
3.69 |
$ |
2.87 |
|
(1) |
The amortization of acquired intangible assets per diluted share presented above is net of an income tax benefit of |
(2) |
The acquisition related expenses per diluted share presented above are net of an income tax benefit of |
(3) |
The non-cash impairment is net of an income tax benefit of |
Three Months Ended |
Nine Months Ended |
||||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||
GAAP SG&A expenses |
$ |
1,617 |
$ |
1,934 |
$ |
4,800 |
$ |
4,487 |
|||||||
Acquisition related expenses |
23 |
399 |
61 |
421 |
|||||||||||
Adjusted SG&A expenses |
$ |
1,594 |
$ |
1,535 |
$ |
4,739 |
$ |
4,066 |
To provide clarity on the way management defines certain key metrics and ratios, the Company is providing a description of how the metric or ratio is calculated as follows:
- Health Benefits Ratio (HBR) (GAAP) = Medical costs divided by premium revenues.
- SG&A Expense Ratio (GAAP) = Selling, general and administrative expenses divided by premium and service revenues.
- Adjusted SG&A Expenses (non-GAAP) = Selling, general and administrative expenses, less acquisition related expenses.
- Adjusted SG&A Expense Ratio (non-GAAP) = Adjusted selling, general and administrative expenses divided by premium and service revenues.
- Adjusted Net Earnings (non-GAAP) = Net earnings less amortization of acquired intangible assets, less acquisition related expenses, less the goodwill and intangible impairment, less the 2018 impact of retroactive changes to the
California minimum MLR, net of the income tax effect of the adjustments. - Adjusted Diluted EPS (non-GAAP) = Adjusted net earnings divided by weighted average common shares outstanding on a fully diluted basis.
- Debt to Capitalization Ratio (GAAP) = Total debt, divided by total debt plus total stockholder's equity.
- Debt to Capitalization Ratio Excluding Non-Recourse Debt (non-GAAP) = Total debt less non-recourse debt, divided by total debt less non-recourse debt plus total stockholder's equity.
- Average Medical Claims Expense (GAAP) = Medical costs for the period, divided by number of days in such period. Average Medical Claims Expense is most often calculated for the quarterly reporting period.
- Days in Claims Payable (GAAP) = Medical claims liabilities, divided by average medical claims expense. Days in Claims Payable is most often calculated for the quarterly reporting period.
In addition, the following terms referenced in this press release and other Company filings are defined as follows:
- State Directed Payments: Payments directed by the state that have minimal risk, but are administered as a premium adjustment. These payments are recorded as premium revenue and medical costs at close to a 100% HBR. The Company has little visibility to the timing of these payments until they are paid by the State.
- Pass Through Payments: Non-risk supplemental payments from the state that the Company is required to pass through to designated contracted providers. These payments are recorded as premium tax revenue and premium tax expense.
About
Forward-Looking Statements
All statements, other than statements of current or historical fact, contained in this press release are forward-looking statements. Without limiting the foregoing, forward-looking statements often use words such as "believe," "anticipate," "plan," "expect," "estimate," "intend," "seek," "target," "goal," "may," "will," "would," "could," "should," "can," "continue" and other similar words or expressions (and the negative thereof).
[Tables Follow]
CENTENE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions, except shares in thousands and per share data in dollars) |
|||||||
|
|
||||||
(Unaudited) |
|||||||
ASSETS |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ |
6,215 |
$ |
5,342 |
|||
Premium and trade receivables |
5,606 |
5,150 |
|||||
Short-term investments |
804 |
722 |
|||||
Other current assets |
832 |
784 |
|||||
Total current assets |
13,457 |
11,998 |
|||||
Long-term investments |
7,915 |
6,861 |
|||||
Restricted deposits |
655 |
555 |
|||||
Property, software and equipment, net |
1,993 |
1,706 |
|||||
|
6,872 |
7,015 |
|||||
Intangible assets, net |
2,086 |
2,239 |
|||||
Other long-term assets |
1,274 |
527 |
|||||
Total assets |
$ |
34,252 |
$ |
30,901 |
|||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS' EQUITY |
|||||||
Current liabilities: |
|||||||
Medical claims liability |
$ |
7,975 |
$ |
6,831 |
|||
Accounts payable and accrued expenses |
4,010 |
4,051 |
|||||
Return of premium payable |
848 |
666 |
|||||
Unearned revenue |
381 |
385 |
|||||
Current portion of long-term debt |
66 |
38 |
|||||
Total current liabilities |
13,280 |
11,971 |
|||||
Long-term debt |
6,975 |
6,648 |
|||||
Other long-term liabilities |
1,561 |
1,259 |
|||||
Total liabilities |
21,816 |
19,878 |
|||||
Commitments and contingencies |
|||||||
Redeemable noncontrolling interests |
31 |
10 |
|||||
Stockholders' equity: |
|||||||
Preferred stock, |
— |
— |
|||||
Common stock, |
— |
— |
|||||
Additional paid-in capital |
7,571 |
7,449 |
|||||
Accumulated other comprehensive earnings (loss) |
145 |
(56) |
|||||
Retained earnings |
4,775 |
3,663 |
|||||
|
(180) |
(139) |
|||||
Total Centene stockholders' equity |
12,311 |
10,917 |
|||||
Nonredeemable Noncontrolling interest |
94 |
96 |
|||||
Total stockholders' equity |
12,405 |
11,013 |
|||||
Total liabilities, redeemable noncontrolling interests and stockholders' equity |
$ |
34,252 |
$ |
30,901 |
CENTENE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except shares in thousands and per share data in dollars) (Unaudited) |
|||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||||||
Revenues: |
|||||||||||||||
Premium |
$ |
17,472 |
$ |
14,623 |
$ |
50,229 |
$ |
38,639 |
|||||||
Service |
743 |
732 |
2,123 |
2,147 |
|||||||||||
Premium and service revenues |
18,215 |
15,355 |
52,352 |
40,786 |
|||||||||||
Premium tax and health insurer fee |
761 |
827 |
3,424 |
2,771 |
|||||||||||
Total revenues |
18,976 |
16,182 |
55,776 |
43,557 |
|||||||||||
Expenses: |
|||||||||||||||
Medical costs |
15,406 |
12,626 |
43,642 |
33,045 |
|||||||||||
Cost of services |
619 |
622 |
1,778 |
1,823 |
|||||||||||
Selling, general and administrative expenses |
1,617 |
1,934 |
4,800 |
4,487 |
|||||||||||
Amortization of acquired intangible assets |
65 |
65 |
194 |
149 |
|||||||||||
Premium tax expense |
822 |
716 |
3,587 |
2,451 |
|||||||||||
Health insurer fee expense |
— |
178 |
— |
532 |
|||||||||||
|
271 |
— |
271 |
— |
|||||||||||
Total operating expenses |
18,800 |
16,141 |
54,272 |
42,487 |
|||||||||||
Earnings from operations |
176 |
41 |
1,504 |
1,070 |
|||||||||||
Other income (expense): |
|||||||||||||||
Investment and other income |
98 |
80 |
317 |
186 |
|||||||||||
Interest expense |
(99) |
(97) |
(299) |
(245) |
|||||||||||
Earnings from operations, before income tax expense |
175 |
24 |
1,522 |
1,011 |
|||||||||||
Income tax expense |
79 |
8 |
415 |
358 |
|||||||||||
Net earnings |
96 |
16 |
1,107 |
653 |
|||||||||||
(Earnings) loss attributable to noncontrolling interests |
(1) |
3 |
5 |
6 |
|||||||||||
Net earnings attributable to |
$ |
95 |
$ |
19 |
$ |
1,112 |
$ |
659 |
|||||||
Net earnings per common share attributable to |
|||||||||||||||
Basic earnings per common share |
$ |
0.23 |
$ |
0.05 |
$ |
2.69 |
$ |
1.72 |
|||||||
Diluted earnings per common share |
$ |
0.23 |
$ |
0.05 |
$ |
2.65 |
$ |
1.68 |
|||||||
Weighted average number of common shares outstanding: |
|||||||||||||||
Basic |
413,616 |
410,591 |
413,302 |
383,257 |
|||||||||||
Diluted |
419,956 |
419,043 |
419,700 |
391,266 |
CENTENE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions, unaudited) |
|||||||
Nine Months Ended |
|||||||
2019 |
2018 |
||||||
Cash flows from operating activities: |
|||||||
Net earnings |
$ |
1,107 |
$ |
653 |
|||
Adjustments to reconcile net earnings to net cash provided by operating activities |
|||||||
Depreciation and amortization |
475 |
354 |
|||||
Stock compensation expense |
106 |
105 |
|||||
|
271 |
— |
|||||
Deferred income taxes |
(75) |
(103) |
|||||
Changes in assets and liabilities |
|||||||
Premium and trade receivables |
(319) |
(696) |
|||||
Other assets |
(14) |
65 |
|||||
Medical claims liabilities |
1,091 |
1,380 |
|||||
Unearned revenue |
(10) |
(150) |
|||||
Accounts payable and accrued expenses |
(552) |
35 |
|||||
Other long-term liabilities |
68 |
199 |
|||||
Other operating activities, net |
(14) |
26 |
|||||
Net cash provided by operating activities |
2,134 |
1,868 |
|||||
Cash flows from investing activities: |
|||||||
Capital expenditures |
(530) |
(489) |
|||||
Purchases of investments |
(2,074) |
(2,691) |
|||||
Sales and maturities of investments |
1,247 |
1,575 |
|||||
Acquisitions, net of cash acquired |
(31) |
(1,958) |
|||||
Net cash used in investing activities |
(1,388) |
(3,563) |
|||||
Cash flows from financing activities: |
|||||||
Proceeds from the issuance of common stock |
— |
2,779 |
|||||
Proceeds from long-term debt |
12,456 |
5,480 |
|||||
Payments of long-term debt |
(12,293) |
(3,692) |
|||||
Common stock repurchases |
(41) |
(17) |
|||||
Purchase of noncontrolling interest |
— |
(63) |
|||||
Debt issuance costs |
(6) |
(25) |
|||||
Other financing activities, net |
12 |
(2) |
|||||
Net cash provided by financing activities |
128 |
4,460 |
|||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
4 |
— |
|||||
Net increase in cash, cash equivalents and restricted cash and cash equivalents |
878 |
2,765 |
|||||
Cash, cash equivalents, and restricted cash and cash equivalents, beginning of period |
5,350 |
4,089 |
|||||
Cash, cash equivalents, and restricted cash and cash equivalents, end of period |
$ |
6,228 |
$ |
6,854 |
|||
Supplemental disclosures of cash flow information: |
|||||||
Interest paid |
$ |
213 |
$ |
213 |
|||
Income taxes paid |
$ |
511 |
$ |
340 |
|||
Equity issued in connection with acquisitions |
$ |
— |
$ |
507 |
|||
The following table provides a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents reported within the Consolidated Balance Sheets to the totals above: |
|||||||
|
|||||||
2019 |
2018 |
||||||
Cash and cash equivalents |
$ |
6,215 |
$ |
6,847 |
|||
Restricted cash and cash equivalents, included in restricted deposits |
13 |
7 |
|||||
Total cash, cash equivalents, and restricted cash and cash equivalents |
$ |
6,228 |
$ |
6,854 |
SUPPLEMENTAL FINANCIAL DATA |
|||||||||||||||||||
Q3 |
Q2 |
Q1 |
Q4 |
Q3 |
|||||||||||||||
2019 |
2019 |
2019 |
2018 |
2018 |
|||||||||||||||
MANAGED CARE MEMBERSHIP BY LINE OF BUSINESS |
|||||||||||||||||||
Medicaid: |
|||||||||||||||||||
TANF, CHIP & |
7,623,400 |
7,388,700 |
7,491,100 |
7,356,200 |
7,260,500 |
||||||||||||||
ABD & LTSS |
1,045,700 |
997,900 |
1,036,200 |
1,002,100 |
964,200 |
||||||||||||||
|
73,300 |
68,800 |
56,000 |
36,500 |
455,900 |
||||||||||||||
Total Medicaid |
8,742,400 |
8,455,400 |
8,583,300 |
8,394,800 |
8,680,600 |
||||||||||||||
Commercial |
2,388,500 |
2,449,400 |
2,472,700 |
1,978,000 |
2,062,500 |
||||||||||||||
Medicare (1) |
404,500 |
398,500 |
393,900 |
416,900 |
417,400 |
||||||||||||||
International |
462,400 |
463,100 |
151,600 |
151,600 |
— |
||||||||||||||
Correctional |
187,200 |
153,900 |
153,200 |
151,300 |
150,900 |
||||||||||||||
Total at-risk membership |
12,185,000 |
11,920,300 |
11,754,700 |
11,092,600 |
11,311,400 |
||||||||||||||
TRICARE eligibles |
2,860,700 |
2,855,800 |
2,855,800 |
2,858,900 |
2,858,900 |
||||||||||||||
Non-risk membership |
227,800 |
228,100 |
211,900 |
219,700 |
219,000 |
||||||||||||||
Total |
15,273,500 |
15,004,200 |
14,822,400 |
14,171,200 |
14,389,300 |
||||||||||||||
(1) Membership includes Medicare Advantage, Medicare Supplement, Special Needs Plans, and MMP. |
|||||||||||||||||||
NUMBER OF EMPLOYEES |
53,600 |
52,000 |
48,100 |
47,300 |
45,400 |
||||||||||||||
DAYS IN CLAIMS PAYABLE |
48 |
47 |
48 |
48 |
51 |
||||||||||||||
CASH, INVESTMENTS AND RESTRICTED DEPOSITS (in millions) |
|||||||||||||||||||
Regulated |
$ |
14,734 |
$ |
15,101 |
$ |
14,303 |
$ |
13,002 |
$ |
13,782 |
|||||||||
Unregulated |
855 |
801 |
507 |
478 |
481 |
||||||||||||||
Total |
$ |
15,589 |
$ |
15,902 |
$ |
14,810 |
$ |
13,480 |
$ |
14,263 |
|||||||||
DEBT TO CAPITALIZATION |
36.2 |
% |
36.8 |
% |
36.9 |
% |
37.8 |
% |
37.3 |
% |
|||||||||
DEBT TO CAPITALIZATION EXCLUDING NON-RECOURSE DEBT (2) |
35.6 |
% |
36.3 |
% |
36.5 |
% |
37.4 |
% |
36.9 |
% |
|||||||||
(2) The non-recourse debt represents the Company's mortgage note payable ( |
OPERATING RATIOS
Three Months Ended |
Nine Months Ended |
||||||||||
2019 |
2018 |
2019 |
2018 |
||||||||
HBR |
88.2 |
% |
86.3 |
% |
86.9 |
% |
85.5 |
% |
|||
SG&A expense ratio |
8.9 |
% |
12.6 |
% |
9.2 |
% |
11.0 |
% |
|||
Adjusted SG&A expense ratio |
8.8 |
% |
10.0 |
% |
9.1 |
% |
10.0 |
% |
MEDICAL CLAIMS LIABILITY
The changes in medical claims liability are summarized as follows (in millions):
Balance, |
$ |
6,983 |
||
Less: reinsurance recoverable |
30 |
|||
Balance, |
6,953 |
|||
Acquisitions and purchase accounting adjustments |
(57) |
|||
Incurred related to: |
||||
Current period |
57,427 |
|||
Prior period |
(773) |
|||
Total incurred |
56,654 |
|||
Paid related to: |
||||
Current period |
49,819 |
|||
Prior period |
5,777 |
|||
Total paid |
55,596 |
|||
Balance, |
7,954 |
|||
Plus: reinsurance recoverable |
21 |
|||
Balance, |
$ |
7,975 |
||
The amount of the "Incurred related to: Prior period" above represents favorable development and includes the effects of reserving under moderately adverse conditions, new markets where we use a conservative approach in setting reserves during the initial periods of operations, receipts from other third party payors related to coordination of benefits and lower medical utilization and cost trends for dates of service
View original content:http://www.prnewswire.com/news-releases/centene-corporation-reports-2019-third-quarter-results-300942633.html
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