The settlement was related to cost-sharing reductions in the Affordable Care Act health plan marketplaces. Insurers have sought to recover payments under the program that reduces out-of-pocket expenses for members after they were cut during the first Trump administration.
Centene said the settlement boosted 2024 earnings by 29 cents a share. That accounts for almost all of the company’s 33-cents-a-share of outperformance for 2024 adjusted earnings, according to data compiled by Bloomberg.
Quarterly earnings were 80 cents a share, the US health insurer said Tuesday in a statement, beating analysts’ average estimate of 49 cents. Revenue for the quarter was $40.8 billion, also beating the average estimate.
Centene spent 89.6% of premium revenues on medical expenses in the quarter, less than Wall Street expected. Investors prefer a lower number.
The company is particularly vulnerable to any changes in health-care policies under the Trump administration. It gets most of its revenue from government programs and individual plans sold through Affordable Care Act exchanges.
Some ACA federal subsidies are set to expire at the end of the year, unless the Republican-controlled government renews them. In addition, a Trump administration cabinet nominee, Russell Vought, has said he favors work requirements for Medicaid recipients, which would threaten Centene’s enrollment from the US health program for low-income people.
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