Centene projects $166.5 billion in revenue next year
Centene is predicting that between $154 billion and $156 billion will come from premium and service revenues.
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During its Investor Day last week, Centene released its earnings guidance and projected between $166.5 billion and $169.5 billion in revenue for 2025, representing slight growth year-over-year.
Of that, Centene is predicting that between $154 billion and $156 billion will come from premium and service revenues. GAAP diluted earnings per share (EPS) will be greater than $6.19, the company said, with adjusted diluted EPS of greater than $7.25.
Centene is also projecting a health benefits ratio (HBR) of 88.4% to 89%, a selling, general and administrative (SG&A) expense ratio of 8.1% to 8.7%, and adjusted SG&A expense ratio of 8.1% to 8.7%.
Revenue for the company reached $154 billion in 2024, an improvement from the $143.2 billion in revenue the insurer logged in 2023.
WHAT'S THE IMPACT
Centene CEO Sarah London said in a statement that the company has improved its core operations over the past three years and has invested in the customer and provider experience.
"This morning, we are reiterating our 2024 adjusted diluted EPS guidance of greater than $6.80," she said. "Additionally, we issued 2025 adjusted diluted EPS guidance of greater than $7.25, representing more than 6% year-over-year growth."
For 2025, the company predicted an effective tax rate of 21.5% to 22.5%, an adjusted effective tax rate of 22% to 23%, and diluted shares outstanding of 491 million to 494 million.
Centene also reaffirmed its 2024 premium and service revenues guidance in the previously announced range of $143.5 billion to $144.5 billion, HBR guidance in the previously announced range of 88.3% to 88.5%, and adjusted diluted EPS guidance of greater than $6.80.
Full-year 2024 earnings will be reported on Feb. 4, 2025.
THE LARGER TREND
This summer, a research brief by Stephens reported that Centene will exit the Medicare Advantage market in at least six states in 2025. The six states are Alabama, Massachusetts, New Hampshire, New Mexico, Rhode Island and Vermont. These states account for about 3% of Centene's Medicare Advantage membership.
During Centene's July 26 Q2 earnings call, an investor asked about the company's statement to "optimize its footprint" in Medicare and whether this included exiting markets.
London responded: "Yes. So relative to Medicare, I think the team has done a really good job in terms of thoughtfully defining the 25 bids consistent with the long-term strategy, even in a challenging rate year. But also, as I mentioned, we've been thinking about how to streamline that book and further align it with our Medicaid footprint, because that's where the puck is going. And so as a result of that, you will see us exit a handful of states with that longer term strategy in mind."
A couple of months later, Centene joined the list of insurers that are suing the Centers for Medicare and Medicaid Services over the 2025 Medicare Advantage Star Ratings.
Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.
