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Centene Corporation CNC recently unveiled the broadening of its Medicare Advantage offerings for the next year. The health care provider boasts of a strong Medicare Advantage network across the United States, wherein it provides coverage to around one million members. Shares of Centene gained 3.8% in the trading session on Oct 7.
Notably, the company provides Medicare Advantage offerings nationwide through its Medicare plans — WellCare, Allwell, Fidelis, and Health Net. Through the same plans, the health care provider, in 2021, is likely to function across 1,249 counties in 33 states. This is likely to boost Centene’s presence by 30% across the United States in the next year.
During the 2021 Medicare Annual Election Period (AEP) from Oct 15 to Dec 7, the company’s members will have access to high-quality and cost-effective Medicare plans, which even include a portfolio of Preferred Provider Organization (PPO) plans.
Further, delving deep into its endeavors for the next year, Centene intends to roll out its 122 new plan designs across 30 states. The company not only intends to offer Medicare Advantage plans across the state of Rhode Island and 10 counties in Vermont but will also provide PPO plans in both states. Apart from Vermont and Rhode Island, the health care provider will specifically provide PPO plans across Alabama, Arizona, Illinois, Kansas, Kentucky, Louisiana, Mississippi and New Jersey in 2021.
Shares of this Zacks Rank #2 (Buy) health care provider have gained 47.5% in a year compared with the industry’s growth of 36%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other health care providers, such as Humana Inc. HUM, UnitedHealth Group Incorporated UNH and Cigna Corporation CI, have also recently rolled out their 2021 Medicare Advantage plans.
Centene to Benefit From a Robust Medicare Business
Centene boasts of a strong Medicare business, which has been performing well for quite a long time. This is evident from the rising revenues reported in the company’s Medicare business, which improved 14% and 11% in 2018 and 2019, respectively. The same surged 142% in the second quarter of 2020 as well. The WellCare acquisition, which was completed in January 2020, has immensely benefited the company’s Medicare business.
It has, in fact, paved the way for not only a highly effective Medicare platform but also enabled Centene to offer diversified and enhanced health care solutions. This is likely to bolster the company’s presence across the United States, where it already boasts of a strong member base.
Centene remains well-poised to benefit from a strong Medicare business through constant partnerships and extension of product offerings devised per the needs of several communities it serves. The health care provider also intends to effectively serve newer Medicare markets. All these initiatives are likely to ramp up the company’s revenues, which have been consistently rising since 2010.
Coming back to the latest move, Centene’s 2021 health plans bode well particularly for seniors and their families, since the Medicare program is primarily intended to provide improved health outcomes for individuals aged 65 or older. Also, it has to be noted that seniors have been more vulnerable to the health issues aggravated by the COVID-19 pandemic. Medicare Advantage is poised to grow given the rise in ageing population in the U.S. Per the Centers for Medicare & Medicaid Services (CMS), the total Medicare market is expected to rise to $1.4 trillion by 2027. The same also forecasts a notable rise in Medicare spending at an average annual rate of 7.4% between 2018 and 2027.
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