(Reuters) - Centene Corp (CNC.N) raised its full-year adjusted profit forecast on Friday, as more people signed up for government-backed Medicaid health insurance plans in April and May, sending the health insurer’s shares up nearly 6%.
The company added 521,000 new Medicaid members in May as eligibility and payment rules for Medicaid were relaxed due to the COVID-19 outbreak.
Centene said in April it would waive COVID-19 related costs for Medicare, Medicaid members.
The company’s projections indicate that economic conditions and unemployment may drive Medicaid membership even further, and it sees about 1.9 million Medicaid members before September, executives said on an a call with investors.
Centene maintained its 2020 profit target in April, but warned of higher costs in the second half of the year on expectations of members resuming their non-urgent medical procedures postponed due to the COVID-19 pandemic.
The company expects that around 75%-80% deferred medical procedures would be performed this year, given capacity constraints, social distancing protocols and individual choices.
Analysts in the past have pointed to a boost in membership for government-sponsored health insurance plans as people lose jobs amid a global recession.
The company said it now expects a profit of $4.76 to $4.96 per share, compared with its earlier forecast of between $4.56 and $4.76 per share.
Reporting by Manas Mishra and Mrinalika Roy in Bengaluru; Editing by Vinay Dwivedi