2019 Financial Guidance and Investor Day. December 14, 2018

Transcription

1 2019 Financial Guidance and Investor Day December 14, 2018 SSID: CNC Password: Welcome2018

2 Welcome and Introduction Edmund E. Kroll, Jr., SVP, Finance & Investor Relations CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 2

3 Forward-Looking Statements The company and its representatives may from time to time make written and oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act (PSLRA) of 1995, including statements in this and other presentations, press releases, filings with the Securities and Exchange Commission (SEC), reports to stockholders and in meetings with investors and analysts. In particular, the information provided in this presentation may contain certain forward-looking statements with respect to the financial condition, results of operations and business of Centene and certain plans and objectives of Centene with respect thereto, including but not limited to the expected benefits of the acquisition of Health Net, Inc. (Health Net) (Health Net Acquisition) and the acquisition of New York State Catholic Health Plan, Inc., d/b/a Fidelis Care New York (Fidelis Care) (Fidelis Care Acquisition). These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Without limiting the foregoing, forward-looking statements often use words such as "believe", "anticipate", "plan", "expect", "estimate", "intend", "seek", "target", "goal", "may", "will", "would", "could", "should", "can", "continue" and other similar words and expressions (and the negative thereof). We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in PSLRA. A number of factors, variables or events could cause actual plans and results to differ materially from those expressed or implied in forward-looking statements. Such factors include, but are not limited to, Centene's ability to accurately predict and effectively manage health benefits and other operating expenses and reserves; competition; membership and revenue declines or unexpected trends; changes in healthcare practices, new technologies and advances in medicine; increased healthcare costs; changes in economic, political or market conditions; changes in federal or state laws or regulations, including changes with respect to income tax reform or government healthcare programs as well as changes with respect to the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act and any regulations enacted thereunder that may result from changing political conditions; rate cuts or other payment reductions or delays by governmental payors and other risks and uncertainties affecting Centene's government businesses; Centene's ability to adequately price products on federally facilitated and state-based Health Insurance Marketplaces; tax matters; disasters or major epidemics; the outcome of legal and regulatory proceedings; changes in expected contract start dates; provider, state, federal and other contract changes and timing of regulatory approval of contracts; the expiration, suspension or termination of Centene's contracts with federal or state governments (including but not limited to Medicaid, Medicare, TRICARE or other customers); the difficulty of predicting the timing or outcome of pending or future litigation or government investigations; challenges to Centene's contract awards; cyber-attacks or other privacy or data security incidents; the possibility that the expected synergies and value creation from acquired businesses, including, without limitation, the Health Net Acquisition and the Fidelis Care Acquisition, will not be realized, or will not be realized within the expected time period; the exertion of management's time and Centene's resources, and other expenses incurred and business changes required in connection with complying with the undertakings in connection with any regulatory, governmental or third party consents or approvals for the Health Net Acquisition or the Fidelis Care Acquisition; disruption caused by significant completed and pending acquisitions, including the Health Net Acquisition and the Fidelis Care Acquisition, making it more difficult to maintain business and operational relationships; the risk that unexpected costs will be incurred in connection with the completion and/or integration of acquisition transactions, including among others, the Health Net Acquisition and the Fidelis Care Acquisition; changes in expected closing dates, estimated purchase price and accretion for acquisitions; the risk that acquired businesses, including Health Net and Fidelis Care, will not be integrated successfully; the risk that, following the Fidelis Care Acquisition, Centene may not be able to effectively manage its expanded operations; restrictions and limitations in connection with Centene's indebtedness; Centene's ability to achieve improvement in the Centers for Medicare and Medicaid Services (CMS) Star ratings and maintain or achieve improvement in other quality scores in each case that can impact revenue and future growth; availability of debt and equity financing, on terms that are favorable to Centene; inflation; foreign currency fluctuations; the stock split and the required stockholders approval to increase Centene s authorized common stock; and risks and uncertainties discussed in the reports that Centene has filed with the SEC. These forward-looking statements reflect Centene's current views with respect to future events and are based on numerous assumptions and assessments made by Centene in light of its experience and perception of historical trends, current conditions, business strategies, operating environments, future developments and other factors it believes appropriate. By their nature, forward-looking statements involve known and unknown risks and uncertainties and are subject to change because they relate to events and depend on circumstances that will occur in the future. The factors described in the context of such forward-looking statements in this presentation could cause Centene's plans with respect to the Health Net Acquisition, the Fidelis Care Acquisition, actual results, performance or achievements, industry results and developments to differ materially from those expressed in or implied by such forward-looking statements. Although it is currently believed that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct and persons reading this presentation are therefore cautioned not to place undue reliance on these forward-looking statements which speak only as of the date of this presentation. Centene does not assume any obligation to update the information contained in this presentation (whether as a result of new information, future events or otherwise), except as required by applicable law. This list of important factors is not intended to be exhaustive. We discuss certain of these matters more fully, as well as certain other risk factors that may affect Centene's business operations, financial condition and results of operations, in Centene's filings with the SEC, including the annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 3

4 Strategic Overview Michael F. Neidorff, Chairman & CEO CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 4

5 Video Placeholder CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 5

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7 2018 Fortune Rankings Delivering Value to Shareholders CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 7

8 Centene s success continues to be driven by: Strong results across our business segments & Strength of our diversification strategy and portfolio approach 2018 Current Enterprise View: 330+ product solutions 31 states 14M U.S. members ~600,000 international individuals CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 8

9 2018 Medicaid RFP Performance CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 9

10 Fidelis Care Medicaid market leader in NY Centene will be the leader in the country s four largest Medicaid states Expands reach in Medicare Advantage and Exchanges Integration going seamlessly Fidelis continues to demonstrate a strong operating performance CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 10

11 Health Insurance Marketplace National leader in the health insurance marketplace 1.6+ million members in 2018 We are now present in over 70% of Centene markets, having expanded into 4 new states for 2019 Tracking to an ~80% member retention and ~90% effectuation rate for 2019 CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 11

12 Medicare Advantage Expansion Returning to a four-star Medicare Advantage parent rating for the 2020 plan year CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 12

13 Government Sponsored Growth LTSS Centene is the largest provider of managed Long-Term Services and Supports which is the fastest growing segment in the industry Centurion Centurion is the market leader in correctional health care based on revenue and recognized as the high standard for quality care International Advancing our international positions from the combination of our expertise, capabilities and Ribera Salud business model CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 13

14 2019 Financial Guidance Revenue $69.7B $70.5B This represents yearover-year growth of approximately 17% (based on guidance mid point) Strategica Priorities CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 14

15 Health Care Enterprises Driving integrated innovation and improving health outcomes through the development of more efficient care models CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 15

16 Centene Forward Multi-year initiative focused on: Anticipated Savings from Centene Forward Up to $500 million This initiative will allow us to make key investments in areas that improve the quality of healthcare for our members and accelerate our margin objectives CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 16

17 Continue to Build on Our IT Capabilities Next-gen IT platforms Introduced at June 2018 Investor Day Enhanced Data Analytics Technology Based Partnerships Disruptive platform that drives change across the care continuum Transparent and cloud based platform Implemented our first market (MS) with all plans to be implemented by the end of 2020 CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 17

18 Advocate for Sound Public Policy and a Bi-Partisan Approach to Healthcare Policy Changes List Panelists Panel: Post-Election Impact on Healthcare Policy Update - Haley Barbour, Former Governor of Mississippi; co-founder BGR Group - Jonathan Dinesman, Senior Vice President, Government Relations - Richard A. Gephardt, CEO, Gephardt Group/Gephardt Government Affairs; Former Democratic Leader of the U.S. House of Representatives - Bakari Sellers, Former South Carolina State Representative and CNN Political Commentator - Marc Short, Former White House Director of Legislative Affairs and Senior Fellow at the Miller Center of Public Affairs - Tommy Thompson, Former Health and Human Services Secretary; Former Governor of Wisconsin CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 18

19 Continue to Be a Growth Company Long term expectations of double digit growth in revenue and profit $1.9 Trillion Addressable Market Less than 50% Managed care penetration in government sponsored healthcare (Medicaid and Medicare expenditures) Our expertise in serving government-sponsored healthcare programs is providing transferable skills for global entry and partnerships CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 19

20 Positioning for the Future Investing in Systems Investing in Capabilities Investing in People To Provide the Highest Quality Healthcare Outcomes at the Lowest Costs CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 20

21 2019 Financial Guidance Jeff Schwaneke, EVP, Treasurer & CFO CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 21

22 Successful Growth History ($ IN BILLIONS) TOTAL REVENUE CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 22

23 Operational Investments CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 23

24 2018 Guidance ($ IN MILLIONS, EXCEPT PER SHARE DATA) Low High Total Revenues $59,800 $60,300 GAAP Diluted EPS $4.34 $4.50 Adjusted Diluted EPS* (1) $6.90 $7.10 HBR 85.9% 86.3% SG&A Expense Ratio 10.5% 10.9% Adjusted SG&A Expense Ratio* (2) 9.7% 10.1% Effective Tax Rate 34.0% 36.0% Diluted Shares (in millions) (1) Adjusted Diluted EPS excludes amortization of acquired intangible assets of $0.81 to $0.83 per diluted share, acquisition related expenses of $1.63 to $1.65 per diluted share and California minimum MLR changes of $0.12 per diluted share. (2) Adjusted SG&A expense ratio excludes acquisition related expenses of $420 million to $425 million. * Represents non-gaap measure. See Appendix for reconciliation of certain non-gaap measures. CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 24

25 2019 Guidance ($ IN MILLIONS, EXCEPT PER SHARE DATA) Total Revenues $69,700 $70,500 Pre-Split Split Adjusted 3 Low High Low High GAAP Diluted EPS $7.23 $7.59 $3.62 $3.80 Adjusted Diluted EPS* (1) $8.15 $8.55 $4.08 $4.28 HBR 86.6% 87.1% SG&A Expense Ratio 9.2% 9.7% Adjusted SG&A Expense Ratio* (2) 9.2% 9.7% Effective Tax Rate 24.5% 26.5% Diluted Shares (in millions) (1) Adjusted diluted EPS excludes amortization of acquired intangible assets of $0.90 to $0.92 pre-split per diluted share ($0.45 to $0.46 split adjusted) and Fidelis acquisition related expenses of $0.02 to $0.04 pre-split per diluted share ($0.01 to $0.02 split adjusted). (2) Adjusted SG&A expense ratio excludes Fidelis acquisition related expenses of $6 million to $12 million. (3) Gives effect to the proposed two-for-one stock split, which is subject to a stockholders vote. * Represents non-gaap measure. See Appendix for reconciliation of certain non-gaap measures. CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 25

26 Total Revenue ($ IN BILLIONS) CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 26

27 Health Benefits Ratio CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 27

28 Adjusted SG&A Expense Ratio* * Adjusted SG&A expense ratio is a non-gaap measure which excludes acquisition related expenses. CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 28

29 Impact of Short-Term Interest Rates $ IN BILLIONS $3.7 CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 29

30 Impact of Short-Term Interest Rates ($ IN MILLIONS) As of September 30, CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 30

31 Income Tax Rate CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 31

32 2019 Guidance Assumptions Business expansion costs of $ $0.28 per diluted share ($0.12-$0.14 per diluted share split adjusted) 1 Amortization of acquired intangible assets of $0.90 to $0.92 per diluted share ($0.45 to $0.46 split adjusted) 1 Diluted shares outstanding million shares ( million split adjusted) 1 Cash flow from operations between 1.5x 2.0x net earnings Adjusted EBITDA between $3.2 billion - $3.4 billion Capital expenditures of approximately $650 million Debt to Capital ratio in low-mid 30% range (1) Gives effect to the proposed two-for-one stock split, which is subject to a stockholders vote. CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 32

33 Business Update: Markets Christopher Bowers - EVP, Markets CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 33

34 Business Update: Markets Market Leader 2019 Market Updates Strengthening Medicaid Performance Clinical Programs CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 34

35 Membership Industry Leading Position 1 st in Medicaid Membership Nationally Operate in 21 States 8.6M Members 1 st in LTSS Membership Nationally Operate in 10 States 270K Members 1 st in Foster Care Membership Nationally Operate in 14 States Sole source in FL, IL, TX and WA (IL slated to go-live in 2019) 140K Members 1 st in Marketplace Membership Nationally Operate in 16 States CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 1.4M Members *data as of 9/30/18 35

36 Leading Industry Position 1 st in revenue in the 4 Largest Medicaid States 14 Markets Where Centene is either # 1 or # 2 in Medicaid Market Share * Four largest states are classified by people enrolled in Medicaid CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 36

37 Industry Leading Position Market share growth despite slight decline in statewide eligibility pools due to Medicaid redeterminations Continued investment in membership retention Focused on organic growth in addition to product and geographic expansions CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 37

38 Existing Market Expansions Implementation - October 1, 2018 Membership 203k Products TANF Medicaid Expansion SSI Behavioral Implementation (Rolling Dec 18 Feb 19) Membership (Range) 640k 660k Products TANF SSI Foster Care Long-Term Care CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 38

39 Existing Market Expansions Implementation January 1, 2019 Membership (Range) 180k 200k Products TANF Medicaid Expansion SSI Behavioral CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 39

40 New Market Expansions Implementation January 1, 2019 Membership ~70k Products TANF Medicaid Expansion SSI Long-Term Care Implementation - July 1, 2019 Membership (Range) 180k 200k Products TANF Medicaid Expansion SSI Long-Term Care CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 40

41 Strengthening Medicaid Performance Enhanced value based contracting Enhanced medical management tools More accurate risk scores Continued focus on actuarial soundness CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 41

42 Centene Core Clinical Programs Key Success Factors 1 2 Clinical guidelines based best practices/medical evidence Big data foundation for methodology / protocols 3 Data Science driven Algorithms 4 Continuous measurement and refinement CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 42

43 Hospital Readmission Reduction Program The Problem Preventable readmissions are a large health care burden $11B 2017 Inpatient Hospital Spend $1.2B Readmission Spend $450M Potentially Preventable Readmission Spend CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 43

44 Readmission Reduction Program: Overview Program Goal: Aim is to reduce preventable readmissions by assisting optimal transitional care from acute and non-acute settings Program Strategy: Focused post-hospitalization outreach (PHO) calls Members identified through proprietary algorithm Use of Centene-specific assessment to direct proper transitional care CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 44

45 Reducing Readmissions with Data Machine learning finds patterns in complex data to guide intervention strategies for reducing readmissions Inputs Diagnoses Social Determinants Demographics Clinical History Data goes in: unorganized, complex, noisy Machine Learning identifies patterns from the data Algorithm to predict readmission risk CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 45

46 Centene s Readmissions Prevention Program Harnesses Machine Learning to Avert Costly Readmissions 50% improvement in preventable readmissions compared to program w/o algorithm CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 46

47 Business Update: Fidelis Care Integration Rev. Patrick Frawley, CEO, Fidelis Care CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 47

48 Fidelis Profile Largest and Only Statewide Plan Serving Government Programs in New York State Medicaid Child Health Plus Medicare Advantage Marketplace Essential Plan Health and Recovery Plan Managed Long Term Care $12 billion 1,740,000 4,400 in Revenue (2018 run-rate) Members employees Highest award in NYS Medicaid Quality Incentive Among top plans in quality ranking CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 48

49 View of Transaction from Fidelis Care CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 49

50 Fidelis Care Employees Employees have been key to Fidelis success Collaborative communication between Fidelis and Centene Employee turnover at or below historical rates Final integration into Centene HR policies and benefits effective 1/1/19 CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 50

51 Provider Network Network of over 70,000 providers Essentially all contracts assigned successfully No disruption of authorizations or payments to providers Provider engagement remains strong based on most recent survey No increase in provider concerns/complaints business as usual CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 51

52 Members Focused communication and retention efforts: Here To Stay campaign Fidelis maintained its statewide leadership throughout this process Largest plan in Medicaid, CHP, HARP, Essential Plan and Exchange (QHP) In core products of Medicaid/CHP Fidelis market membership YTD has outpaced entire market CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 52

53 Operations All financial and operational transactions thoroughly tested seamless transition Close communication with regulators addressed helped minimize member and provider transitions CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 53

54 Successful Integration at Every Level Continued Growth in Core Products Maintain and Enhance Quality Performance Enhancement of Processes and Systems Based on Best Practices CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 54

55 Business Update: Products Kevin Counihan, SVP - Products CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 55

56 Product Summary CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 56

57 National View Peak Membership , , , ,200, ,650,000 * excludes Health Net CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY Centene State Centene HIM Membership 2019 New HIM State New States PA, NC, SC, TN (22 counties) Expansion States FL, GA, IN, KS, MO, TX (118 counties) Sole Carrier AZ (2 counties) MS (Statewide) GA (some rural counties) States Where We are Covering Bare Counties IN (3), MO (25), NV(14), OH (3) Statewide Presence AR, MS, NH, NV, IN Lowest Silver in 526 of 594 Counties in

58 Demographics: * Based on signups as of 12/12/18 CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 58

59 Executive Order- STLD Coverage Marketplace 1 (AVERAGE) Marketplace (100%-150%) Marketplace (150%-200%) STLD 2 Premium $41 $20-$61 $61-$127 $46-$983 Cost Sharing Deductible $1,548 $675 $1,950 $1,000-$12,500 OOP Max N/A N/A N/A $250k-$2M Benefits Essential Health Benefits Essential Health Benefits Essential Health Benefits Varies by Plan; Pre-existing conditions applies Rating Guaranteed Guaranteed Guaranteed Underwritten Enrollment No pre-existing conditions No pre-existing conditions No pre-existing conditions Pre-existing conditions applies Notes: 1. Based on member in Miami, FL 2. Kaiser Family Foundation & Internal Research on short-term limited duration (STLD) plans CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 59

60 Ambetter Marketplace Strategy Focus on lower income, subsidized members under 250% of FPL Disciplined approach to pricing and risk adjustment program execution Tailored networks with essential community providers and FQHCs as the cornerstone of our primary care network Products and benefits specifically designed to meet the needs of our target membership CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 60

61 2018 Medicare Profile Products Membership: over 400k (Projected Year-End 2018) Multi-product Multi-state 2017 Centene Medicare Market 2018 New Centene Medicare Advantage Additions CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 61

62 Medicare Strategy Focus on individuals under 400% FPL Geography Conversion Provider Alliances Focus on CNC Markets Value based purchasing arrangements CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 62

63 Pharmacy - RxAdvance Live in MS (Magnolia Health Plan) Cloud-based comprehensive PBM services Integrated platform with significant reduction in manual work 50% reduction in touchpoints EMR agnostic protocols Promotes optimal utilization of Rx spend & quality improvement CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 63

64 Update on Products Products Appropriately Priced Performing to Plan Driving Growth CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 64

65 Business Update: Health Care Enterprises Holly Benson, EVP, President & CEO, Health Care Enterprises CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 65

66 Health Care Enterprises CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 66

67 Best in KLAS 2 nd Year in a Row #1 Overall/Future: Casenet stood out for both overall performance and meeting long-term client needs #1 Strategic Partner: Casenet scored the highest for its clients commitment to keeping Casenet as part of their long-term plans #1 Outcomes: Casenet scored the highest for driving tangible outcomes Casenet has had the greatest positive impact when it comes to supporting health plans work and outcomes. KLAS The product development of TruCare has been practical, disciplined and forwardlooking/ Gartner 2016 Market Guide for Care Management CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 67

68 *Screenshot is representative data only CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 68

69 *Screenshot is representative data only CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 69

70 U.S. Medical Management CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 70

71 Medical Centers 16 Clinicians 54 FTE Employees 386 HMO Contracts 16 Members (Medicaid, Medicare, Exchange) 80,000 CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 71

72 ACCESS Services Medicaid eligibility Section 8 Housing Food Stamp Eligibility Temporary Cash Assistance CMG Access Sites 700 unique visitors per day 1,200 Medicaid members enrolled per month 250 Medicare members enrolled per month CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 72

73 Business Update: Operations Brandy Burkhalter, EVP, Operations CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 73

74 Addressing the Growth Over the Past Five Years Call volume: 4x increase Medical claims: 3x increase Network providers: 1.5x increase CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 74

75 Driving Operational Efficiencies Automation Analytics Continuous Improvement/ Process Re-engineering Audit & Quality Review CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 75

76 Value Based Purchasing of Health Care FORMING TIGHTER PARTNERSHIPS WITH PROVIDERS CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 76

77 Provider Relationships CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 77

78 Question and Answer CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 78

79 Break SSID: CNC Password: Welcome2018

80 Centene Forward: Transforming Tomorrow, Today Cindy Brinkley EVP, Chief Administrative and Markets Officer CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 80

81 Multi-year, enterprise-wide program Designed to be selfgenerating Value captured will be reinvested in capability development CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 81

82 Centene Forward will position us for our next phase of growth by focusing on three objectives CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 82

83 Centene Forward s Initial Focus Areas CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 83

84 Case Study in Digital: Transforming the Care Management process through smart technology TruCare Anywhere Capabilities Enable care managers to document assessments, complete notes, reconcile medications and capture scanned paperwork while working offline in members homes Smart Assessment Technology Streamline assessment process with prepopulation of responses and conditional/branch logic creating custom assessment Increased Productivity, Improved Member Experience A more efficient assessment process Eliminate duplication of work Higher member satisfaction More time to devote to member s needs and concerns CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 84

85 Case Study in Digital: Automated mobile workforce management and service solution Mobile App Provides Care Managers with the ability to view their assigned visits and all relevant visit details, and provide real-time updates Field Service Management Solution Supports the scheduling, dispatch, and smart routing of member visits CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 85

86 Ensuring Centene Forward s Success Top-team Accountability Rigorous Governance Committed Resources Cultural Competency Employee Engagement CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 86

87 CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 87

88 Post-Election Impact on Healthcare Policy Michael F. Neidorff, Moderator CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 88

89 Panel: Post-Election Impact on Healthcare Policy Haley Barbour, Former Governor of Mississippi; co-founder BGR Group Jonathan Dinesman, Senior Vice President, Government Relations Richard A. Gephardt, CEO, Gephardt Group/Gephardt Government Affairs; Former Democratic Leader of the U.S. House of Representatives Bakari Sellers, Former South Carolina State Representative and CNN Political Commentator Marc Short, Former White House Director of Legislative Affairs and Senior Fellow at the Miller Center of Public Affairs Tommy Thompson, Former Health and Human Services Secretary; Former Governor of Wisconsin CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 89

90 Growth and Diversification Brent Layton- EVP, Chief Business Development Officer CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 90

91 Addressable Markets $1.95 trillion* $718B Medicaid $783B Medicare $102B Health Insurance Marketplace $9B Correctional Healthcare $109B Federal Services *Data based on CBO projections and Company estimates for FY20 $231B International CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 91

92 Targeted Pipeline $271 billion Medicaid Medicare Health Insurance Marketplace Correctional Healthcare Federal Services International 92

93 Medicaid Pipeline Realization ($ IN BILLIONS) Total Pipeline $113B 45 Targeted Pipeline $88B 34 Realized or Anticipated Revenue* $22B 27 Total Contracts Targeted Contracts Contract Wins 80% Win Rate *Anticipated revenue includes contract wins that have not yet gone live CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 93

94 Geographic and Product Diversification

95 2018 Awarded Contracts- Existing Markets AHCCCS Complete Care Reprocurement Statewide Medicaid Managed Care Program and Sole Source Child Welfare Apple Health Integrated Managed Care KanCare 2.0 Reprocurement Awarded March 5, 2018 Go-Live October 2018 Awarded April 24, 2018 Go-Live December 2018 February 2019 Awarded May 24, 2018 Go-Live January 2019 and January 2020 Awarded June 22, 2018 Go-Live January 2019 CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 95

96 Existing Markets Service Expansion CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 96

97 Existing Markets Submitted RFP Responses Medicaid Managed Care Reprocurement Submitted October 31 STAR+PLUS Submitted November 15 STAR and CHIP Submitted November 30 Developmental Disabilities Submitted December 10 CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 97

98 Existing Markets: Future Growth 8 8 Centene States without Medicaid Expansion CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 98

99 Existing Markets: Future Growth 8 Centen 8 e States without Medicaid Expansion 3 Centen8e States without ABD CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 99

100 Existing Markets: Future Growth 8 Centen 8 e States without Medicaid Expansion 3 Centen8e States without ABD 13 Centen8e States without LTSS CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 100

101 Existing Markets Product Expansion Addressing market needs and driving external revenue growth via a diverse product portfolio that leverages the strength of Centene s existing markets CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 101

102 Existing Markets Product Expansion Centene Largest Medicaid Managed Care Organization and Largest Marketplace Insurer Ascension Largest Non-Profit Health System in the U.S. and the World s Largest Catholic Health System Proposed Joint Venture to Accelerate Medicare Advantage Growth Objective Launch Product Impact Leading payorprovider collaboration to deliver quality care to seniors Targeting entry into initial markets in 2020, with additional markets targeted for 2021 Create a providerendorsed, integrated network product with competitive benefits Improve provider and patient experience in MA through engagement and innovation CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 102

103 2018 Awarded Contracts- New Markets Centennial Care 2.0 Awarded January 29, 2018 Go-Live January 2019 Iowa Health Link Awarded May 21, 2018 Go-Live July

104 New Markets North Carolina North Carolina s New Managed Care Program 12,000 members Innovative JV owned physician-led health plan Initial Populations: TANF, CHIP, ABD (non-dual) Enrollees: 1.5M 41 FQHCs and look-like organizations Initial Spend: $9.6B Entering North Carolina January 2019 (Durham and Wake Counties) RFP Status: Submitted October 19 Anticipated Go-live: November 2019 (Phase 1) February 2020 (Phase 2) CENTENE 2019 FINANCIAL GUIDANCE AND INVESTOR DAY 104

105 International Growth Leveraging Our Experience to Create Value Globally Care Delivery Integration Technology Population Management Public Private Partnership Capitation arrangement Serves 150,000 patients Operates 250 beds 105

106 M&A Strategic Objectives CONSISTENT CRITERIA & FINANCIAL DISCIPLINE VALUE CREATION Generating appropriate returns on our investments for our shareholders SCALE Add scale to existing operations and increase our geographic footprint CAPABILITY M&A targets that add capabilities for existing service offerings 106

107 In Summary.. WE ARE A GROWTH COMPANY Demonstrated Ability to Convert Opportunities to CNC Revenue Total Revenue in Excess of $70B* Opportunities Across Markets, Products, Specialty Services and M&A Robust Pipeline Revenue Visibility Diversified Growth *based on 2019 revenue guidance mid point 107

108 Question and Answer 108

109 Thank You!

110 Appendix 110

111 Reconciliation of Non-GAAP Measures Included in this presentation are certain non-gaap financial measures. Management believes that non-gaap financial measures provide information that is useful to investors in understanding period-over-period operating results and enhances the ability of investors to analyze Centene s business trends and performance. The non-gaap financial measures should not be considered in isolation, or as a substitute for the corresponding GAAP financial measures and may not be comparable to similar measures used by other companies. The Company references Adjusted EBITDA guidance, defined as net earnings attributable to Centene Corporation, excluding income tax expense, interest expense, depreciation, amortization (excluding senior note premium amortization) and non-cash stock compensation expense. The Company also references Adjusted SG&A Expense Ratio, which excludes acquisition related expenses. The Company cannot provide a reconciliation of Adjusted EBITDA and Adjusted SG&A Expense Ratio guidance without unreasonable efforts. As such, they have been excluded from the reconciliation below. A reconciliation of Adjusted Diluted EPS, a non-gaap financial measure, with the most directly comparable financial measure calculated in accordance with GAAP follows: 2018 Annual Guidance Pre-Split 2019 Annual Guidance Post-Split 2019 Annual Guidance 5 GAAP diluted EPS $ $4.50 $ $7.59 $ $3.80 Amortization of acquired intangible assets (2) $ $0.83 $ $0.92 $ $0.46 Acquisition related expenses (3) $ $1.65 $ $0.04 $ $0.02 California minimum MLR change (4) $ Adjusted Diluted EPS (1) $ $7.10 $ $8.55 $ $4.28 (1) Adjusted Diluted EPS is defined as GAAP diluted net earnings from continuing operations before amortization of acquired intangible assets, acquisition related expenses, other one time adjustments, and the tax impact of such adjustments, calculated on a per share basis. We believe these adjustments are not indicative of future performance. (2) The amortization of acquired intangible assets per diluted share presented are net of the income tax benefit estimated to be $0.24 to $0.25 for the year ended December 31, 2018 and $0.27 to $0.29 pre-split and approximately $0.14 post-split for the year ended December 31, (3) The acquisition related expenses per diluted share presented are net of the income tax benefit estimated to be $0.50 to $0.51 for the year ended December 31, 2018 and approximately $0.01 pre-split and approximately $0.00 post-split for the year ended December 31, (4) The impact of retroactive changes to the California minimum MLR per diluted share is net of the estimated income tax benefit of $0.03 for the year ended December 31, (5) Gives effect to the proposed two-for-one stock split, which is subject to a stockholders vote. 111