(Reuters) – Centene Corp beat Wall Street estimates for second-quarter profit on Friday following the company’s announcement that it was no longer required to make a $1.3 billion payment related to its government-sponsored Medicaid offerings.
The results follow the company’s preliminary earnings report on Tuesday.
Centene was expected to pay $1.3 billion towards the U.S. Centers for Medicare & Medicaid Services’ risk adjustment program for 2023. But the agency has said the company can forgo the payment.
The company’s second-quarter medical loss ratio – the percentage of premiums spent on medical care – was 87.6%, an increase from 87% reported last year and an LSEG estimate of 86.84%.
Centene and other insurers have experienced higher-than-expected costs around its government-backed plans as states began reassessing Medicaid enrollment eligibility after the termination of a policy last year that required insurers to keep low-income Americans enrolled through the COVID-19 pandemic.
For the quarter, the company earned $2.42 per share on an adjusted basis, compared with analysts’ average estimate of $2.07 per share, according to LSEG data.
(Reporting by Amina Niasse in New York City and Sriparna Roy in Bengaluru; Editing by Shinjini Ganguli)
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