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Health insurer Centene's profit beats as membership rises

* Says medical costs to remain stable in 2015

* Membership rises 41 pct to 4.1 mln in 2014

* Shares rise as much as 4 pct to record high (Adds conference call details, analyst's comments, share movement)

By Amrutha Penumudi and Ankur Banerjee

Feb 3 (Reuters) - Health insurer Centene Corp reported a better-than-expected quarterly profit as it added more Medicaid members, and assured investors of "stable medical costs" in 2015.

Centene's larger rivals such as UnitedHealth Group Inc and Anthem Inc said last week they expected a slight increase in medical costs this year.

Centene's medical costs, which includes expenses associated with inpatient, outpatient, physician and pharmacy services, rose 41 percent to $12.68 in 2014.

The company's managed care membership also rose 41 percent to 4.1 million in 2014, with Medicaid membership growing 34 percent.

The expansion of Medicaid under Obamacare has boosted membership for health insurers in the last couple of quarters.

Centene, which also announced a 2-for-1 stock split, will benefit from Indiana becoming the 28th U.S. state to expand Medicaid, a federal health insurance program for lower-income people.

"Anthem and Centene are likely to be most exposed to Indiana Medicaid with 33 percent and 27 percent, respectively, of market share," Leerink Partners LLC analyst Anagha Gupte said.

The company operates in two units, the larger managed care business is focused on government-sponsored plans for the under-insured or uninsured.

Under the specialty division, the company partners with healthcare organizations to provide services including behavioral health, care management software and home health.

The company's health benefits ratio deteriorated to 89.3 percent in the fourth quarter from 88.1 percent a year earlier. The ratio is the amount an insurer spends on medical claims compared with its income from premiums.

Centene's net profit rose to $107 million, or $1.76 per share, in the quarter ended Dec. 31, from $53 million, or 93 cents per share, a year earlier.

On an adjusted basis, the company earned $1.74 per share, above the average analyst estimate of $1.69, according to Thomson Reuters I/B/E/S.

Revenue rose 61 pct to $4.73 billion, topping the analysts' estimate of $4.61 billion.

Centene's shares rose as much as 4 percent to a record high of $113.62 in early trading on the New York Stock Exchange on Tuesday.

(Editing by Simon Jennings and Don Sebastian)