Centene Corporation CNC recently unveiled that its subsidiary, Health Net Community Solutions, has been chosen by the California Department of Health Care Services to cater to the dental health needs of members enrolled in the State’s Medicaid program, Medi-Cal, and residing in Los Angeles and Sacramento counties. Likely to commence from July 1, 2025, the new contract will run for a period of 54 months.
The CNC unit utilizes a whole-person care model that enables it to provide comprehensive and coordinated dental care and addresses social determinants of health. This, in turn, is expected to bridge health disparities, boost health outcomes and improve access to quality care for Medi-Cal members of the targeted counties.
The Centene unit will benefit from the opportunity to attract more beneficiaries of the Medi-Cal program and, consequently, bolster the Medicaid customer base and its footprint across the state. It caters to more than 1.5 million Medi-Cal members across California. Health Net boasts a network of more than 1,000 dental providers who provide comprehensive dental care to roughly 385,000 members across Los Angeles and Sacramento counties. The unit remains the only Medi-Cal plan in Los Angeles and Sacramento counties offering both medical and dental coverage.
Benefits of the Recent Move to Centene
The strength in CNC’s Medicaid business is likely to have prompted the California Department of Health Care Services to pick Health Net as one of the three managed care organizations for the Medi-Cal contract.
The latest move is expected to boost membership, leading to higher premiums, a substantial driver of the health insurer's overall revenues. In the first half of 2024, Centene generated $70.7 billion in premiums, which improved 4.6% year over year. The Medicaid business plays a critical role for the company, accounting for a significant portion of its total membership. Medicaid membership reached 13.1 million as of June 30, 2024.
This year, Centene secured Medicaid contracts in Kansas, Michigan and New Hampshire. It continues to enhance its Medicaid business through strategic provider partnerships and significant investments. Beyond Medicaid, it also offers Medicare and Marketplace plans in the United States, with memberships of 1.1 million and 4.4 million, respectively, as of June 30, 2024.
CNC’s Share Price Performance
Shares of Centene have risen 6.7% in the past year compared with the industry’s 8.5% growth.
Image Source: Zacks Investment Research
CNC’s Zacks Rank & Stocks to Consider
CNC currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Medical space are Tenet Healthcare Corporation THC, HCA Healthcare, Inc. HCA and Integer Holdings Corporation ITGR. While Tenet Healthcare sports a Zacks Rank #1 (Strong Buy) at present, HCA Healthcare and Integer carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Tenet Healthcare’s earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 58.48%. The consensus estimate for THC’s 2024 earnings and revenues indicates an improvement of 53.6% and 1.4%, respectively, from the 2023 reported figures.
The consensus estimate for Tenet Healthcare’s earnings has moved 5.6% north in the past 60 days. Shares of THC have gained 138.9% in the past year.
HCA Healthcare’s earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed the mark once, the average surprise being 8.24%. The consensus estimate for HCA’s 2024 earnings and revenues implies an improvement of 18.2% and 8.9% from the respective 2023 figures.
The consensus estimate for HCA Healthcare’s 2024 earnings has moved 1.2% north in the past 30 days. Shares of HCA have gained 58.4% in the past year.
Integer’s earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 7.83%. The consensus estimate for ITGR’s 2024 earnings and revenues indicates an improvement of 13.7% and 9.6%, respectively, from the 2023 figures.
The consensus estimate for Integer’s 2024 earnings has moved 0.2% north in the past 60 days. Shares of ITGR have gained 62.4% in the past year.
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