Centene Corp. expects membership in its health insurance marketplace business to grow more than it projected, a change that helped push the company to boost its guidance for full year 2018.
For January, Centene had more than 1.6 million paid health exchange members, beating the company's estimate, and the updated 2018 guidance reflects newly revised membership expectations, CFO Jeffrey Schwaneke said on a call to discuss earnings.
"Back in December, we kind of guided to a number of around 1.3 million paid members, now we're looking at something greater than 1.6 million. More time has passed and we have certainty on the number of enrollees," Schwaneke said.
The company expects an increase of $700 million in 2018 revenues, associated with the higher membership expectations for the health exchange business. The higher membership projections are also reflected in Centene's 2018 EPS and adjusted EPS outlook, each raised by 14 cents. Centene expects 2018 GAAP EPS of $5.91 to $6.25 and adjusted EPS of $6.95 to $7.35.
Centene also adjusted its full-year 2018 guidance to reflect tax reform, which is expected to benefit net earnings and cash flow by about $280 million in 2018, worth about a $1.38 and $1.58 impact on GAAP and adjusted EPS, respectively. This is prior to additional investments of $60 million, after tax, to support growth and employ initiatives during the year, investments in technology and analytics, and enhancing other capabilities, Schwaneke said.
On the company's pending deal to acquire substantially all the assets of Fidelis Care, Centene Chairman and CEO Michael Neidorff said the company is currently moving through the process for regulatory approval in New York. The company still continues to work toward an April 1 closing date and the initial integration planning is underway and "going extremely well," he said.
