Centene would not bid for divested Humana Medicare Advantage business
Insurer said it wanted to quell rumors, during second quarter earnings report.
Centene Headquarters-St.Louis, MO. Photo by Centene
Centene's Medicare Advantage network could not handle the type of Medicare Advantage business required in a potential Humana divestiture, Centene Chairman and CEO Michael F. Neidorff said during an earnings call this week.
Neidorff was quelling what he called rumors surrounding the often-heard suggestion that Centene could bid for Humana's divestitures, should Humana's merger with Aetna get past a Department of Justice court injunction and move towards fulfilling antitrust and anti-competitive concerns.
Centene has not participated, and will not participate, in bidding at auctions, Neidorff said.
"I commented that the MA that we're in and my comments talked about it, the lower socioeconomic level," Neidorff said, referring to comments made at conferences. "What we see out of the Humana's and others are businesses that are at a higher level that we don't have a network for. And that is not our business and (we) would not build a network for it. Someone was spreading some rumors."
[Also: Centene says hard drive loss due to employee error; Merger with Health Net expected early 2016]
Centene is expected to enter four new markets for Medicare Advantage, the company said.
During the call, Neidorff and other executives addressed Centene's wholly-owned subsidiary, Health Net, which it added last year.
For the second quarter of 2016, total revenues increased 98 percent to $10.9 billion, from $5.5 billion in the second quarter of 2015, the company said. A main factor in the increase was the acquisition of Health Net in 2015.
Yet Health Net was responsible for Affordable Care Act losses, Centene said. The insurer set aside a $300 million premium deficiency reserve to cover the losses.
As of June 30, Centene served 617,700 members in health insurance marketplaces, compared to 167,400 in June 30, 2015.
[Also: Standard & Poor's puts Aetna, Humana on credit watch following DOJ move to block merger]
This week the U.S. Department of Defense announced it had given the Tricare West Region contract to Health Net Federal Services, a contract formerly held UnitedHealthcare. Health Net also manages the Tricare North Region.
Some of Health Net's business could not be discussed because it was in litigation, company officials said. A Provider Dispute Resolution Request is being evaluated and should not be a factor next year, Neidorff said.
"The Health Net integration remains on track and the benefits of our greater scale and diversity are being realized accordingly," Neidorff said.
At June 30, 2016, the company served 1,004,200 members in Medicaid expansion programs in nine states and 363,600 dual-eligible members, compared to 368,900 members in Medicaid expansion programs in seven states and 187,400 dual-eligible members at June 30, 2015.
Twitter: @SusanJMorse
