Earnings plunge 84% at Centene, but rise for Coventry
Although Centene and Coventry Health Care issued financial reports within a day of each other, the two insurers experienced dramatically different fourth quarters last year.
Centene's fourth-quarter net earnings tumbled 84 percent to $4.6 million after higher-than-expected flu expenses and increased medical costs with its Kentucky and Texas Medicaid plans, the insurer said in its earnings report last week.
But Centene did increase its revenue by 59 percent to $2.4 billion and enrollment by 41 percent to 2.6 billion people by adding new members in Louisiana, Missouri, Texas and Washington.
"While 2012 had its challenges, we continue to make progress on premium rates in Texas and believe we have addressed the issues in Kentucky with our planned exit of the State," Centene CEO Michael Neidorff said in a statement. Centene broke its contract with Kentucky and filed a lawsuit against the state, which it claims largely caused its recent financial losses.
Meanwhile, Coventry successfully countered rising costs, as demonstrated by its 39 percent growth in fourth-quarter earnings--thanks in part to higher enrollment in its Medicaid and Medicare prescription drug plans. The insurer earned $119 million in the fourth quarter of 2012, compared to $85 million a year earlier. Its revenue rose 10 percent to $3.45 billion, according to its earning report last week.
Coventry, which Aetna is purchasing for $5.7 billion, increased membership by more than 12 percent to a total of 5.4 million people. Jumping particularly high was its Medicaid program, which saw a 41 percent increase in membership compared to 2011.
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