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    Centene Corp (CNC)

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    Business Description

    Centene Corporation is a leading provider of government-sponsored healthcare services, focusing on improving health and healthcare for low-income, complex populations. The company operates through various segments, offering a range of healthcare programs and services, including Medicaid, Medicare, Commercial health insurance, and other healthcare-related services . Centene provides access to healthcare for nearly 1 in 15 individuals nationwide, emphasizing a local approach to delivering healthcare services .

    1. Medicaid - Offers programs such as Temporary Assistance for Needy Families (TANF), Medicaid Expansion, and the Children's Health Insurance Program (CHIP), among others.
    2. Commercial - Includes the Health Insurance Marketplace and various commercial health insurance products.
    3. Medicare - Covers Medicare Advantage, Dual Eligible Special Needs Plans (D-SNPs), and Medicare Prescription Drug Plans (PDPs).
    4. Other - Encompasses pharmacy operations, vision and dental services, and behavioral health, among others.

    Key Metrics

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    Executive Team

    NamePositionStart DateShort Bio
    Sarah M. LondonChief Executive OfficerMarch 2022Sarah M. London has been serving as the Chief Executive Officer of Centene Corporation since March 2022. She previously held roles such as Vice Chairman and President, Centene Health Care Enterprises .
    Andrew L. AsherExecutive Vice President, Chief Financial OfficerMay 2021Andrew L. Asher has served as the Executive Vice President, Chief Financial Officer of Centene Corporation since May 2021. He was previously the CFO of WellCare .
    Katie N. CassoSenior Vice President, Corporate Controller and Chief Accounting OfficerApril 2021Katie N. Casso has served as the Senior Vice President, Corporate Controller and Chief Accounting Officer at Centene Corporation since April 2021. She was previously Vice President, Assistant Controller .
    Kenneth J. FasolaPresidentDecember 2022Kenneth J. Fasola has served as the President of Centene Corporation since December 2022. He joined Centene following the acquisition of Magellan Health, where he was CEO .
    Christopher A. KosterExecutive Vice President, Secretary and General CounselDecember 2021Christopher A. Koster has served as the Executive Vice President, Secretary and General Counsel of Centene Corporation since December 2021. He was previously Missouri Attorney General .
    Susan R. SmithChief Operating OfficerJanuary 2024Susan R. Smith has served as the Chief Operating Officer of Centene Corporation since January 2024. She joined the company in June 2023 and held various senior positions at Humana Inc. .
    Thomas R. GrecoBoard of Directors MemberAugust 9, 2024Thomas R. Greco was appointed to the Board of Directors of Centene Corporation, effective August 9, 2024. He was later assigned to the Governance Committee and the Compensation and Talent Committee .

    Questions to Ask Management

    1. Could you elaborate on the sufficiency of the Medicaid rate adjustments you've received so far, and what steps are you taking if rates are still misaligned with the higher acuity of your post-redeterminations member base?
    2. Given the continued pressure on Medicaid margins from the mismatch of rates and acuity, how confident are you in your ability to grow adjusted EPS next year, and what are the key levers to achieve this growth?
    3. With the Medicare Advantage business expecting down membership in 2025 but aiming for margin recovery, can you explain how the recent changes in Star ratings and contract portfolio will translate into financial improvement?
    4. In your Marketplace business, you mentioned expectations for modest membership growth and mid-single-digit macro market growth; can you discuss the potential risks to achieving your target pretax margins given the program integrity enhancements and agent of record lock policies?
    5. Regarding the underlying utilization trends in Medicaid, especially in areas like behavioral health and home health, are you seeing any new pressures or emerging trends that could impact your medical loss ratio beyond what you've previously disclosed?

    Share Repurchase Program

    Program DetailsProgram 1
    Approval DateNovember 2005
    End Date/DurationNo specific end date
    Total additional amount$10.0 billion
    Remaining authorization amount$3.2 billion as of September 30, 2024
    DetailsThe program includes regular open-market purchases and may involve Rule 10b5-1 and accelerated share repurchases. The company reserves the right to discontinue the program at any time.

    Debt Maturity Schedule

    YearAmount Due (in millions)Debt TypeInterest Rate (%)% of Total Debt
    2024$111Current Portion of Long-Term DebtN/A0.6% = (111 / 17,605) * 100
    2027$2,500Senior Notes4.2514.2% = (2,500 / 17,605) * 100
    2028$2,300Senior Notes2.4513.1% = (2,300 / 17,605) * 100
    2029$3,500Senior Notes4.62519.9% = (3,500 / 17,605) * 100
    2030$2,000Senior Notes3.37511.4% = (2,000 / 17,605) * 100
    2030$2,200Senior Notes3.0012.5% = (2,200 / 17,605) * 100
    2031$2,200Senior Notes2.5012.5% = (2,200 / 17,605) * 100
    2031$1,300Senior Notes2.6257.4% = (1,300 / 17,605) * 100

    Customer Concentration

    CustomerRelationshipSegmentDetails
    State of New York
    Medicaid managed care program
    All
    Contributed 10% of total revenue in 2021

    Auditor

    NameStart DateEnd DateReason for Change
    KPMG LLP2005 PresentCurrent auditor