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Centene's (CNC) Hawaii Arm to Keep Offering Healthcare Services

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Zacks Equity Research
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Centene Corporation’s CNC Hawaii unit 'Ohana Health Plan is chosen to continue administering services through the Community Care Services (CCS) project in collaboration with the Hawaii Department of Human Services' Med-QUEST Division. Expected to start Jul 1, 2021, this new three-year contract will have an option for two one-year renewal extensions.

Since 2013, 'Ohana Health Plan has been the only provider of CSS services in the aforesaid area. This is the right time to expand the services as people are in need of behavioral health services due to COVID-led stress and uncertainty.

Hawaii’s CSS program provides behavioral health services to around 5000 Medicaid-eligible adults aged 21 years and above, who are also suffering severe mental illness (SMI) or a severe and persistent mental illness (SPMI).

Centene also entered into an agreement to buy Magellan Health that will strengthen its position in the market and will enable it to establish a behavioral health platform. This clearly shows the company’s constant efforts in strengthening its international portfolio.

'Ohana Health Plan members can enjoy various benefits that cater to their behavioral health requirements. The list consists of intensive case management. The members get individual attention so that their care programs and behavioral health goals are customized per their needs.
CSS members can avail of addiction support services, residential and outpatient treatment, prescription drug and medication management, emergency and crisis services, and employment services.

Centene is making consistent efforts to provide the best healthcare services to its members, especially amid the present challenging times. Its continuous tie-ups with organizations aim at providing enhanced health outcomes to the target group.

It is also meting out integrated physical and behavioral healthcare in Hawaii and across the nation. Operating under WellCare Health Insurance of Arizona, Inc., 'Ohana Health Plan has been meeting the requirements of Hawaiian residents through the state's Medicaid program since 2008. In January 2020, the health insurer brought WellCare Health Plans to widen its scale.

As of Dec 31, 2020, 'Ohana Health Plan serves around 50,000 Medicaid and Medicare Advantage members across the state.

Centene remains well-poised to benefit from a strong Medicare business through constant partnerships and an extension of product offerings devised according to the needs of several communities it serves. The company has been witnessing consistent and significant revenue growth since 2002. Its top line witnessed a CAGR of 34.6% from 2015 to 2019. Its 2019 revenues shot up mainly on the back of its Fidelis Care buyout, growth in the Health Insurance Marketplace business and expansions plus new programs across many states in 2018 and 2019.

In 2020, its top line improved 49% year over year on the back of the WellCare buyout, membership growth in Medicaid and the Health Insurance Marketplace business as well as the reinstatement of the health insurer fee in 2020. Management expects total revenues for 2021 between $116.1 billion and $118.1 billion.

Zacks Rank and Price Performance

This currenrtly Zacks Rank #3 (Hold) stock has gained 9.1% in a year’s time, underperforming the industry’s growth of 15.6%. Other companies in the same space, such as Anthem, Inc. ANTM, Humana Inc. HUM and The Joint Corp. JYNT have also rallied 14%, 16% and 154.2% in the same time frame. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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