Centene(CNC) - 2024 Q4 - Annual Report

Membership Growth - Year-end membership reached 28.6 million, an increase of 1.1 million members, or 4% over 2023[282] - Managed care membership increased by 1.1 million, or 4%, from December 31, 2023, to December 31, 2024, totaling 28.6 million members[302] - Medicare PDP membership increased by 50% year-over-year, while Medicare Advantage membership declined by 13%[295] Revenue Performance - Total revenues for 2024 were $163.1 billion, representing 6$163.1 billion, driven by membership growth and Medicaid rate increases[304] - Total revenues increased by 6% to $163.1 billion in 2024, driven by a 36$163,071 million, an increase of 5.4% from $153,999 million in 2023[402] Earnings and Profitability - Diluted earnings per share (EPS) increased to$6.31 for 2024, compared to $4.95 for 2023[282] - Adjusted diluted EPS rose to$7.17 for 2024, representing a 7% growth year-over-year[282] - Net earnings attributable to Centene Corporation for 2024 were $3,305 million, up 22.3$2,702 million in 2023[402] - Basic earnings per common share increased to $6.33 in 2024, compared to$4.97 in 2023, reflecting a growth of 27.3%[402] - The company reported a comprehensive earnings of $3,453 million in 2024, compared to$3,182 million in 2023, an increase of 8.5%[404] Expenses and Cost Management - SG&A expense ratio improved to 8.5% for 2024, down from 9.0% for 2023[282] - SG&A expense ratio decreased to 8.5% for the year ended December 31, 2024, from 9.0% in 2023, primarily due to the divestiture of Circle Health and lower Medicare SG&A[309] - Total impairment charges for 2024 were $13 million, significantly lower than the$529 million recorded in 2023, which included a $292 million charge related to Circle Health[310][311] Medical Claims and Liabilities - The total medical claims liability as of December 31, 2024, was$18.3 billion, an increase from $18.0 billion in 2023[370] - The company incurred$128.3 billion in medical claims related to the current year for 2024, compared to $120.7 billion in 2023[370] - Medical claims liability includes claims reported but not yet paid, estimates for claims incurred but not reported, and processing costs[435] - The Company uses actuarial methods to estimate medical claims liability, considering historical data and various relevant factors[435] Cash Flow and Financing - Operating cash flows were$154 million for 2024, a significant decrease from $8.1 billion for 2023[282] - Cash used in financing activities rose to$2.4 billion in 2024, driven by stock repurchases totaling $3.1 billion, compared to$1.6 billion in 2023[330][331] - The company has $2.2 billion remaining under its stock repurchase program as of December 31, 2024, after repurchasing 42 million shares for$3.0 billion[333] Divestitures and Acquisitions - The company divested its majority stake in Apixio in June 2023, recognizing a gain of $93 million, or$67 million after-tax[272] - The company completed several divestitures, including Operose Health and Circle Health, impacting its operational structure[296] - The Company completed the divestitures of Circle Health and Collaborative Health Systems (CHS) during 2024[416] Capital and Investments - The debt-to-capital ratio increased to 41.2% as of December 31, 2024, from 40.7% in 2023, influenced by stock repurchases and increased borrowings[338] - The company has short-term investments of $2.6 billion and long-term investments of$18.8 billion as of December 31, 2024[384] Regulatory and Compliance - The company anticipates limited reductions in Medicaid membership post-redeterminations, as most states have completed their unwinding processes by December 2024[278] - The Company reached an agreement with the federal government in 2024 to retroactively compensate for the difference in cost sharing reductions (CSRs) from 2018 to 2020[450] Accounting and Reporting - Revenue recognition is based on premiums received from states, members, and CMS, with adjustments for risk scores based on member acuity[373] - The Company estimates risk adjustment revenues based on diagnosis data submitted to CMS, recording revenues on a risk-adjusted basis[443] - The Company adopted new accounting guidance in Q4 2024 regarding segment reporting, which will enhance disclosures about significant expenses[459]