Centene Corporation (CNC - Free Report) recently announced expansion of offerings in the 2020 Health Insurance Marketplace. The company is penetrating 10 markets, namely Arizona, Florida, Georgia, Kansas, North Carolina, Ohio, South Carolina, Tennessee, Texas and Washington to gain a strong foothold for establishment in the marketplace business.
Centene, the country’s leading provider of health insurance marketplace plans, would now be able to dispense affordable and quality healthcare in the aforementioned states. As of Jun 30, 2019, the company served around 1.9 million exchange members across 20 states, reflecting a rise of 27% year over year.
The key characteristics of these members, such as age, gender, etc. remain intact over the last years per the company’s record with more than 90% of them eligible for subsidies.
The company’s procedures for regulatory approvals of the target areas in 2020 are already on track.
In January 2019, the company also extended its offerings across Pennsylvania, North Carolina, South Carolina and Tennessee besides boosting its presence in the existing markets of Florida, Georgia, Indiana, Kansas, Missouri and Texas.
With better patient care, demand for marketplace business is growing, following which Centene made this announcement. This is also evident from the solid profit margins reported by insurers. The company’s Marketplace business continues to be in the 5-10% range per the last reported results. This, in turn, boosted its revenues in the second quarter of 2019.
The company has constantly been putting in efforts to increase its membership through market growth plus acquisitions and mergers.
Centene is on course to acquire WellCare Health Plans, Inc. (WCG - Free Report) , which is expected to close by the first half of 2020. The combined entity will have a wider scale and diversification with more than 12 million Medicaid and around 5 million Medicare members in its fold. In total, it will have around 22 million members across the 50 US states. All these initiatives poise the company well for long-term growth.
Active collaborations and buyouts have been a major growth trajectory in this industry. A few other players, such as Anthem, Inc, (ANTM - Free Report) and Humana Inc. (HUM - Free Report) have also been purchasing units and collaborating with companies to improve membership and enhance respective portfolios.
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