Centene Corporation and its subsidiaries (Centene) is a leading provider of government-sponsored healthcare.
Centene is a leading healthcare enterprise that is committed to helping people live healthier lives. The company takes a local approach – with local brands and local teams – to provide fully integrated services to government-sponsored and commercial healthcare programs, focusing on under-insured and uninsured individuals. Centene offers affordable and high-quality products to more than 1...
Centene Corporation and its subsidiaries (Centene) is a leading provider of government-sponsored healthcare.
Centene is a leading healthcare enterprise that is committed to helping people live healthier lives. The company takes a local approach – with local brands and local teams – to provide fully integrated services to government-sponsored and commercial healthcare programs, focusing on under-insured and uninsured individuals. Centene offers affordable and high-quality products to more than 1 in 15 individuals across the nation, including Medicaid and Medicare members (including Medicare Prescription Drug Plans), as well as individuals and families served by the Health Insurance Marketplace.
Centene provides access to high-quality healthcare, innovative programs, and a wide range of health solutions that help families and individuals get well, stay well, and be well. The company's uniquely local approach – with local brands and local teams who live in, care about, and directly influence the communities they serve – is a key differentiator in its ability to provide access to quality care to its members. Centene treats the whole person, an approach that is delivered locally and backed by the scale of Centene's expertise, data, and resources. Through this approach and its commitment to sustainable partnerships, the company works with local community organizations to realize its mission of transforming the health of the communities it serves, one person at a time.
The company is focused on making strategic decisions and investments to create additional value in the short term, and to seek opportunities that position the organization for long-term strength, profitability, growth, and innovation. In addition to creating shareholder value, the company is modernizing and improving how it works in order to propel its organization to new levels of success and elevate the member and provider experiences.
During 2024, the company operated in four segments: Medicaid, Medicare, Commercial, and Other.
Medicaid - Includes the Temporary Assistance for Needy Families (TANF) program, Medicaid Expansion programs, the Aged, Blind, or Disabled (ABD) program, the Children's Health Insurance Program (CHIP), Long-Term Services and Supports (LTSS), Foster Care, Medicare-Medicaid Plans (MMP), which cover beneficiaries who are dually eligible for Medicaid and Medicare, and other state-based programs.
Medicare - Includes Medicare Advantage, Medicare Supplement, Dual Eligible Special Needs Plans (D-SNPs), and Medicare Prescription Drug Plans (PDP), also known as Medicare Part D.
Commercial - Includes the Health Insurance Marketplace product, along with individual, small group, and large group commercial health insurance products.
Other - Includes the company's pharmacy operations, Envolve Benefit Options' vision and dental services, clinical healthcare, behavioral health, the TRICARE program, and corporate management companies, among others.
Industry and Operations
The company provides a full spectrum of managed healthcare products and services, primarily through Medicaid, Medicare, and commercial products.
Medicaid
Medicaid is a publicly funded program in the United States and provides health insurance to low-income families and individuals with disabilities. Medicaid is funded jointly by federal and state governments, with the majority of funding provided by the federal government and administered by the states. Each state establishes its own eligibility standards, benefit packages, payment rates, and program administration within federal standards. As a result, there are 56 Medicaid programs – one for each U.S. state, each U.S. territory, and the District of Columbia. Eligibility is based on a combination of household income and assets, often determined by an income level relative to the federal poverty level.
Medicaid helps meet the needs of various populations through the following products and programs:
The TANF program covers low-income families with children.
Medicaid Expansion covers all individuals under age 65 with incomes up to 138% of the federal poverty level, subject to each state's election. The federal government pays 90% of the costs for Medicaid Expansion coverage for these beneficiaries.
The ABD program covers low-income individuals with chronic physical disabilities or behavioral health impairments. ABD beneficiaries represent a growing portion of all Medicaid recipients and typically utilize more services as a result of their more complicated health status.
CHIP helps to expand coverage primarily to children whose families earn too much to qualify for Medicaid, yet not enough to afford private health insurance. Historically, children have represented a Medicaid eligible population. Costs are primarily composed of pediatrics and family care, which tend to be more predictable than those associated with other healthcare issues predominantly affecting the adult population.
LTSS is a Medicaid product that covers Institutional/Residential Care (Nursing and Intermediate Care Facilities) and Home and Community Based Services (HCBS) for beneficiaries requiring assistance with their activities of daily living. The largest groups receiving LTSS, by spending, are older individuals and individuals with physical disabilities, followed by individuals with intellectual and developmental disabilities, those with serious mental illness and/or serious emotional disturbance, and other populations. States are increasingly turning to managed care as a solution to provide coordinated, holistic care to their LTSS beneficiaries.
The majority of children in foster care qualify for Medicaid. The federal government has enacted legislation establishing requirements for state child welfare agencies related to the health and well-being of children in foster care, including the provision of grants and technical assistance to enable states to meet these needs and make explicit connections with Medicaid. In addition, under the ACA, former foster care children are eligible for Medicaid until the age of 26, provided that they turned 18 while in foster care and were enrolled in Medicaid at that time.
A portion of Medicaid beneficiaries are dual-eligible, low-income seniors, and people with disabilities who are enrolled in both Medicaid and Medicare. According to CMS, there were more than 12 million dual-eligible enrollees in 2023. These members may receive assistance from Medicaid for benefits, such as nursing home care, HCBS, and/or assistance with Medicare premiums and cost-sharing depending on their income level. Dual-eligibles use more services due to their tendency to have more chronic health issues. The company serves dual-eligibles primarily through its ABD, LTSS, MMP, and Medicare Advantage D-SNPs lines of business.
The company is the largest Medicaid health insurer in the country, serving 13 million Medicaid recipients in 30 states as of December 31, 2024. The company’s Medicaid contracts with the states of Florida and New York accounted for approximately 10% or more of its consolidated Medicaid premium revenues individually in the year ended December 31, 2024.
Medicare
Medicare is the federal health insurance program for people ages 65 and over, which was expanded to cover people under 65 with certain disabilities and people with end-stage renal disease requiring dialysis or kidney transplant. Medicare consists of four parts, labeled A through D. Part A provides hospitalization benefits financed largely through Social Security taxes and requires beneficiaries to pay out-of-pocket deductibles and coinsurance. Part B provides benefits for medically necessary services and supplies, including outpatient care, physician services, and home health care. Parts A and B are referred to as Original Medicare.
As an alternative to Original Medicare, beneficiaries may elect to receive their Medicare benefits through Part C, also known as Medicare Advantage. Under Medicare Advantage, MCOs contract with CMS to provide services directly to Medicare beneficiaries, as well as through employer and union groups. MCOs typically receive a fixed monthly premium per member from CMS that varies based on the county in which the member resides, demographic factors of the member, such as age, gender, and institutionalized status, and the health status of the member. Any benefits that are not covered by Medicare may result in an additional monthly premium charged to the enrollee or through portions of payments received from CMS that may be allocated to these benefits, according to CMS regulations and guidance. Typically, as its Medicare Advantage members reach their deductibles and out-of-pocket maximums, the company's medical costs rise, creating seasonality in the business with a higher percentage of earnings in the first half of the year.
As of December 31, 2024, the company served 1.1 million Medicare Advantage members across several states, primarily under the brand name Wellcare, with the highest concentration of lower-income, complex members compared to its peers. Revenues from CMS are significant to the segment. Consistent with its strategy, the company has reduced its Medicare Advantage footprint to various states as of January 1, 2025.
Dual-Eligible Alignment
Recently finalized CMS regulations are promoting greater alignment and integration for dual-eligible members across both programs, whereby full dual beneficiaries would be enrolled under the same company's Medicaid and Medicare plan, improving the quality of care and overall member experience. With over 70% of the approximately 12 million fully-eligible duals population not in fully-integrated coverage arrangements, the company sees significant opportunity to advance care management, improve member engagement, and improve the affordability of healthcare through this process. D-SNPs offer various levels of integration of benefits, care coordination (e.g., care management), and processes (e.g., appeals and grievances, claims, and materials) depending on the plan type. Fully Integrated Dual Eligible (FIDE) plans provide Medicaid and Medicare benefits, including LTSS and/or behavioral health through one plan under one legal entity. Highly Integrated Dual Eligible (HIDE) plans can offer Medicaid and Medicare benefits from different plans under different legal entities owned by the same parent organization. These HIDE plans have some differences in the Medicaid benefit offering requirements compared to FIDE plans. Lastly, Coordination-Only Dual Eligible plans can coordinate care with Medicaid fee-for-service or Medicaid MCOs from different parent organizations, and in some states, can also serve partial dual-eligibles who do not receive full Medicaid benefits. Accordingly, the company has been refining its Medicare footprint to overlap more closely with its Medicaid presence to provide D-SNP offerings that support alignment.
Newly finalized CMS regulations will require beneficiaries dually enrolled in Medicare and in a Medicaid managed care plan to receive integrated care through the Medicaid company's Medicare Advantage D-SNPs beginning in 2030, with certain restrictions beginning in 2027.
Medicare Prescription Drug Plan
Medicare prescription drug coverage, or Medicare Part D, is a voluntary benefit for Medicare beneficiaries. The Medicare Part D prescription drug benefit is supported by risk sharing with the federal government through risk corridors designed to limit the losses and gains of the participating drug plans and by providing a portion of reinsurance for catastrophic drug costs. The government subsidy is based on the national weighted average monthly bid for this coverage, adjusted for risk factor payments. Additional subsidies are provided for dually eligible beneficiaries and specified low-income beneficiaries.
MCOs contract with CMS to serve as plan sponsors offering stand-alone Medicare Part D PDPs to Medicare-eligible beneficiaries. PDPs offer national in-network prescription drug coverage, and may include a preferred pharmacy network, subject to limitations in certain circumstances. Unless CMS is notified of non-renewal and the non-renewal is effectuated by not filing a bid in June, Medicare Advantage and PDP contracts with CMS are renewed for successive one-year terms each September. Should CMS decide not to renew a contract, CMS must notify MCOs on or before August 1, and the plan would be terminated effective December 31 of that year. The company's 2025 PDP bids resulted in 33 of the 34 CMS regions for which it was below the benchmarks and one region for which it was above the benchmark, compared to 30 of 34 CMS regions for which it was below the benchmark for the 2024 PDP bids.
The company served 6.9 million members as of December 31, 2024, the country's PDP carrier. It began providing PDP coverage in 2006 and offers stand-alone PDPs in several states and the District of Columbia with a priority on plans that offer low premiums, deductibles, and cost sharing.
Commercial
The company offers commercial health insurance products to individuals through the ACA Health Insurance Marketplace and through large and small employer groups. These plans offer differing benefit designs and varying levels of co-payments at different premium rates. These plans facilitate access to healthcare services for its members through network contracts with physicians, hospitals, and other providers. Coverage typically is subject to copays and can also be subject to deductibles and coinsurance. As its commercial members reach their deductibles and out-of-pocket maximums, the company's medical costs rise, creating seasonality in the business with a higher percentage of earnings in the first half of the year.
The ACA created the Health Insurance Marketplace, which is a key component of the ACA and provides an opportunity for individuals and families to obtain health insurance. States have the option of operating their own Marketplace or partnering with the federal government. States choosing neither option default to the federally-facilitated Marketplace. Insurers are required to offer a minimum level of benefits with coverage that varies based on premiums and out-of-pocket costs.
Premium subsidies are provided to individuals and families without access to other coverage and with incomes above 100% of the federal poverty level to make coverage more affordable. Consumers who qualify for subsidies may choose how much of the tax credit to apply to their premiums each month, up to the maximum amount for which they are eligible. The amount of subsidy an enrollee may receive depends on household income and the cost of the second lowest cost silver plan available to enrollees in their local area. Temporary enhanced subsidies were made available by the American Rescue Plan Act (ARPA), which were further extended through 2025 pursuant to the Inflation Reduction Act.
The company is a Marketplace carrier, serving 4.4 million members across various states as of December 31, 2024, under the brand name Ambetter Health. Revenues from CMS are significant to the segment.
The company sees an opportunity for market disruption of employer-sponsored insurance through Individual Coverage Health Reimbursement Arrangements (ICHRAs). An ICHRA allows employers of all sizes to directly reimburse employees for individual health insurance premiums and qualifying medical expenses tax-free in lieu of traditional employer-sponsored health insurance. The ICHRA model relies heavily on off-exchange, individual health insurance coverage as the most efficient way to use the funds. These off-exchange plans often mimic employer-provided coverage in benefit design. They are designed to provide comprehensive, consistent coverage and benefits that meet members' needs.
Using an ICHRA allows employees to tap into a more competitive health plan marketplace and a larger risk pool, creating stronger potential for lower, more stable premiums. At the same time, this approach allows employees to find products that better fit their needs. Given the full commercial group market covers over 170 million, the company sees a significant addressable market over the long term. It has launched plans designed to attract ICHRA membership in off-exchange plans in a few states in 2025.
Other
The company's Other segment includes:
Specialty Pharmacy: AcariaHealth offers comprehensive specialty pharmacy services customized for complex and chronic conditions through enhanced patient care offerings and collaborative partnerships with providers to optimize patient outcomes.
Behavioral Health: Magellan Health, Inc. (Magellan) supports innovative ways of accessing better health through technology, while remaining focused on the critical personal relationships that are necessary to achieve a healthy, vibrant life. Magellan's customers include health plans and other MCOs, employers, labor unions, various military and state and federal governmental agencies, and third-party administrators.
Vision and Dental Services: Envolve Benefit Options coordinates benefits beyond traditional medical benefits to offer fully integrated vision and dental health services. The company's vision benefit program administers routine and surgical eye care benefits through a contracted national network of eye care providers. Through the dental benefit, the company is dedicated to improving oral health through a contracted network of dental healthcare providers.
Clinical Healthcare: Community Medical Group (CMG) provides clinical healthcare, encompassing primary care, access to certain specialty services, and a suite of social and other support services. CMG operates in Florida through an at-risk primary care provider model, focusing on clinical and social care for at-risk beneficiaries. Additionally, Denova Collaborative Health provides outpatient primary care and behavioral healthcare services.
Federal Services: Health Net Federal Services had a Managed Support Contract in the West Region for the Department of Defense (DoD) TRICARE program. The company provided administrative services to Military Health System eligible beneficiaries, which included eligible active duty service members and their families, retired service members and their families, survivors of retired service members, and qualified former spouses. Its contract for health care delivery services concluded at the end of 2024.
Corporate Management Company: Each of the company's health plans contracts with its corporate management company to provide certain functions required to manage the health plan, including, but not limited to, salaries and wages for personnel, rent, utilities, population health management, provider contracting, compliance, member services, claims processing, information technology, cash management, finance, and accounting, and other services.
Providers
For each of the company's service areas, it establishes a provider network consisting of primary and specialty care physicians, hospitals, behavioral health practitioners, and ancillary providers. Its network of primary care physicians is a critical component of care delivery, healthcare affordability, and the attraction and retention of new members. Primary care physicians include family and general practitioners, pediatricians, and internal medicine physicians. Specialty care physicians provide medical care to members generally upon referral by primary care physicians. Specialty care physicians include a wide array of provider types, including but not limited to, orthopedic surgeons, cardiologists, and otolaryngologists. The company also builds robust networks of mental health providers, such as psychiatrists, social workers, substance abuse disorder facilities, and inpatient behavioral health facilities. It also contracts with providers on a negotiated fee arrangement for physical therapy, home healthcare, diagnostic laboratory tests, x-ray examinations, ambulance services, and durable medical equipment.
The company's health plans facilitate access to healthcare services for its members primarily through contracts with its providers. Its contracts with primary and specialty care physicians and hospitals are usually for a term of one to three years and usually renew automatically for successive one-year terms, but generally are subject to termination by either party upon prior written notice. In the absence of a contract, the company typically pays providers at applicable state or federal reimbursement levels and guidelines, depending on the product (for example, Medicaid or Medicare). It pays providers under a variety of methods, including fee-for-service, capitation arrangements, and value-based arrangements.
Under its fee-for-service contracts with providers, the company pays a negotiated fee for covered services, which may include a case rate or fee-for service. This model is characterized as having no financial risk for the provider.
Under its capitated contracts, providers can be paid a set amount for their services as outlined in their respective provider agreements, usually on a per member per month basis, and sometimes, including different rates depending on the age of the population.
Under value-based arrangements, providers can be paid under either a capitated or fee-for-service model. The arrangement, however, contains provisions for additional payments to the providers or reimbursement from the providers based on their performance against quality and other measures. The company is committed to value-based contracting, upside and downside risk, assigning members to the highest quality providers and capitation. This is done in partnership with its providers to increase quality outcomes and overall member satisfaction.
The continuum of value-based contracting includes the following models: pay-for-performance, shared savings, shared risk, and full risk. The company often starts its provider relationships in a pay-for-performance model, in which providers are reimbursed for the fair market value of services provided. Providers benefit from this model as it gives complete transparency and clarity on actions that earn incentives.
The company then transitions to a risk-sharing model, in which providers are reimbursed based on the total cost of care. As it advances along this continuum, it strengthens its partnerships with its providers, enabling the delivery of high-quality care.
The company works with physicians to help them operate efficiently by providing actionable financial and utilization information, physician and patient educational programs, and disease and population health management programs. Its programs are also designed to help physicians coordinate care rendered by other providers.
The company's local and collaborative approach with physicians and other providers gives it a competitive advantage in entering new markets. Its contracted physicians serve on local committees that assist it in implementing preventive care programs, optimizing costs, and improving the overall quality of care delivered to its members, while also simplifying the administrative burdens on its providers. This approach has enabled the company to strengthen its provider networks through improved physician recruitment and retention, which, in turn, has helped to increase its membership base.
The following are among the services the company provides to support physicians:
Provider Engagement Performance Tools and Processes can lead to measurable improvements in quality and health outcomes, healthcare costs, and member satisfaction. High-quality provider support and service levels are important as the company's key customers are increasingly using performance-based measures to select and pay health plans. The company has a suite of network performance tools for use by physicians and other providers, which monitor the outcomes and care gaps of their individual patient panels. Provider Engagement and Quality teams meet with the providers to review their performance issues and recommend strategies for improvements in their patient panel outcomes, including disease management and quality initiatives. The company's tools also allow the physician and others to see where they stand within their value-based contract.
The company's Integrated Care Model is member-centric and managed by one care manager assigned to a member who looks at the care for the member in a holistic manner. This single care manager will coordinate all care for that member, including behavioral health, medical health, and home-based primary care in accordance with an individualized, integrated care plan. This care manager also coordinates meetings with the member's integrated care team to assess and alter the care plan as needed. This results in better clinical outcomes and improved member satisfaction.
The Provider Portal delivers claims and eligibility information, prior authorization submissions and status, member panels, care gaps, patient analytics, and provider analytics to contracted providers to drive provider engagement and improve patient outcomes. Data and reporting are delivered via a secure, user-friendly web-based provider portal.
The company's contracted physicians also benefit from several of the services offered to its members and population health management programs, which assist physicians in managing their patients with chronic diseases.
Regulations
Responsibilities include the ongoing maintenance of the company's privacy program and oversight of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) as the company pertains to it and its business units from a compliance, business, and technical perspective.
The company's pharmacies must also register with the U.S. Drug Enforcement Administration and individual state-controlled substance authorities to dispense controlled substances.
Comprehensive legislation, specifically Title XVIII of the Social Security Act, governs the company's Medicare program. In addition, its Medicare contracts are subject to regulation by the Centers for Medicare and Medicaid Services (CMS).
In addition, several of the company's Medicaid contracts require it to maintain Medicare Advantage D-SNPs, which are regulated by CMS and the state Medicaid agency, for dual-eligible individuals within the state. The company provides Medicare Advantage, PDPs, D-SNPs, and MMPs pursuant to contracts with CMS and subject to federal regulation regarding the award, administration, and performance of such contracts. CMS also has the right to audit the company's performance to determine its compliance with these contracts, other CMS regulations, and the quality of care it provides to Medicare beneficiaries under these contracts.
As of December 31, 2024, the company operated in 29 states under federally-facilitated Marketplace contracts with CMS and state-based exchanges.
The company's government contracts have included government-sponsored managed care and administrative services contracts through the TRICARE program and certain other healthcare-related government contracts. Its contract for health care delivery services through the TRICARE program concluded at the end of 2024.
The company is subject to various international, federal, state, and local laws and rules regarding the use, security, and disclosure of protected health information, personal information, and other categories of confidential or legally protected data that its businesses handle. Such laws and rules include, without limitation, HIPAA, the Federal Trade Commission Act, the Gramm-Leach-Bliley Financial Modernization Act of 1999 (Gramm-Leach-Bliley Act), and state privacy and security laws, such as the California Confidentiality of Medical Information Act and the California Online Privacy Protection Act. Privacy and security laws and regulations often change due to new or amended legislation, regulations, or administrative interpretation. A variety of state and federal regulators enforce these laws, including but not limited to, the U.S. Department of Health and Human Services (HHS), the Federal Trade Commission, state attorneys general, and other state regulators.
In addition, the company processes and maintains personal card data, particularly in connection with its Marketplace business. As a result, it must maintain compliance with the Payment Card Industry Data Security Standard, which is a multifaceted security standard intended to optimize the security of credit, debit, and cash card transactions, and protect cardholders against misuse of their personal information.
History
Centene Corporation was founded in 1984. The company was incorporated in Delaware in 2001.
