Health insurer Centene (CNC) raised its profit forecast for 2017, after its quarterly profit topped analysts’ estimates on higher enrolments and growth in its Obamacare business.
The results come a week after President Donald Trump’s and Republicans’ revised attempts to dismantle former President Barack Obama’s Affordable Care Act (ACA) collapsed in the Senate.
On Monday, Trump had made a last-ditch plea to GOP Senators to “do the right thing” and fulfill campaign promises to repeal and replace Obamacare. He kept up the pressure Tuesday, saying via Twitter that “ObamaCare is torturing the American People.The Democrats have fooled the people long enough. Repeal or Repeal & Replace! I have pen in hand.”
The Senate will vote on Tuesday whether to open debate on an overhaul of the law.
St. Louis-based Centene, one of the largest players in the Obamacare individual insurance market, last month disclosed plans to expand into three new states in 2018.
The move came in contrast to other insurers, who have blamed Republicans for creating instability by not guaranteeing to continue paying Obamacare cost-sharing subsidies next year.
“Centene remains the only larger-cap publicly-traded managed care company to show strong performance in its individual exchange efforts,” Cantor Fitzgerald analysts said.
Net earnings attributable to Centene rose to $254 million, or $1.44 a share, in the second quarter ended June 30, from $170 million, or 97 cents a share, a year earlier. The company said its second-quarter earnings included a 17 cents a share net benefit related to risk adjustment under the ACA. Excluding one-off items, it earned $1.59 a share. It raised its full-year 2017 forecast to between $4.70 and $5.06 a share.
Centene’s adjusted profit of $1.42 per share was above analysts’ expectations of $1.32 per share, according to Reuters. Revenue rose to $11.95 billion from $10.90 billion, slightly ahead of analysts’ average estimate of $11.69 billion.
“We believe CNC is the best way to play the reform cycle with potential for multiple expansion now that Medicaid expansion and exchanges look more secure,” Piper Jaffray analysts said.
The company, which primarily focuses on government-backed health insurance plans, had 12.2 million members in its individual plans as of June 30, an increase of about 7 percent.
Centene’s health benefits ratio, or the amount it spends on medical claims compared with its income from premiums, improved marginally to 86.3 percent, from 86.6 percent a year earlier. A lower ratio is better for the insurer.