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Insurer Centene turns 2Q profit, membership grows

ST. LOUIS (AP) -- Centene returned to profitable second-quarter as membership gains in several states helped the Medicaid provider offset a 19 percent rise in medical costs.

Enrollment climbed by more than 12 percent as the St. Louis company expanded its presence in Mississippi, gained members in Texas and added contracts in Kansas, Missouri and Washington.

People covered by Medicaid make up the largest portion of Centene's enrollment. Medicaid is the state and federally funded program that provides health coverage to poor and disabled people. States typically hire private insurers to administer the coverage.

The enrollment gains helped to push Centene's revenue up 29 percent to $2.73 billion. Premium and service revenues accounted for most of that at $2.63 billion.

Analysts expected $2.64 billion in revenue, according to FactSet.

Centene Corp. earned $39.5 million, or 70 cents per share, in the three months that ended June 30. That compares to a loss of $35 million, or 68 cents per share, in last year's quarter. Centene at that time struggled with a spike in medical costs in Kentucky and Texas and from its Celtic individual health business.

Analysts expected, on average, earnings of 65 cents per share.

Centene's medical costs climbed to $2.24 billion from $1.89 billion in the most recent quarter. Medicaid contracts can generate high expenses, something that Centene has struggled with in Kentucky.

The insurer said earlier this month that it has left that state's Medicaid program and is transferring its membership to other insurers.