SSID: Centene Corp Password: welcome Financial Guidance and Investor Day December 16, Welcome 2017 FINANCIAL GUIDANCE & INVESTOR DAY

Transcription

1 2017 Financial Guidance and Investor Day December 16, 2016 SSID: Centene Corp Password: welcome2016 Welcome

2 Welcome & Introduction Ed Kroll, SVP - Finance and Investor Relations

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. 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 anticipate, "seek", target, expect, estimate, intend, plan, goal, believe, hope, aim, continue, will, may, "can", would, could or should or other words of similar meaning or 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 health care costs; changes in economic, political or market conditions; changes in federal or state laws or regulations, including changes with respect to government health care 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 or 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, and TRICARE); 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, will not be realized, or will not be realized within the expected time period, including, but not limited to, as a result of conditions, terms, obligations or restrictions imposed by regulators in connection with their approval of, or consent to, the acquisition; 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 certain regulatory approvals; disruption from the acquisition making it more difficult to maintain business and operational relationships; the risk that unexpected costs will be incurred in connection with, among other things, the acquisition and/or the integration; changes in expected closing dates, estimated purchase price and accretion for acquisitions; the risk that acquired businesses will not be integrated successfully; Centene's ability to maintain or achieve improvement in CMS Star ratings and other quality scores that impact revenue; availability of debt and equity financing, on terms that are favorable to Centene; inflation; foreign currency fluctuations; 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, 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 reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. 3

4 Strategic Overview Michael F. Neidorff, Chairman, President & CEO

5 Today s Objectives Demonstrate ability to successfully navigate industry changes Details on 2017 guidance and updates on 2016 operations 5

6 (in billions) 2017 Guidance $46.0B - $46.8B $39.7B Guidance Midpoint 2017 Guidance Range 6

7 Changing Healthcare Policy How will the new administration and Congress address healthcare policy? Repeal the ACA? Medicaid Per Capita Caps? Cross State Health Insurance? Medicaid Block Grants? Replace the ACA? Modernize Medicare? 7

8 Complex Health Care Industry Population Health Mgmt $ Predictive Analytics Medicaid Innovation Value Based Purchasing Mega Reg & MACRA y m Consumerism IT Infrastructure Focus on Prevention Cost Pressures Health Reform Integrated Care Mgmt Changing Competitive Landscape 8

9 Complex Health Care Industry Population Health Mgmt Value Based Purchasing Focus on Prevention $ m Consumerism Cost Pressures Managing the Uncertainty Medicaid Centene s strategic participation will y be driven by CEO and Board Members Mega Reg & MACRA Health Reform Predictive Analytics Internal and external expertise Integrated Care Mgmt Innovation IT Infrastructure Providing policy evaluations on block grants and per capita cap designs Changing Competitive Landscape Policy suggestions in the design of a potential replacement product for the Health Insurance Marketplace 9

10 Affordable Care Act AFFORDABLE CARE ACT Reform will not happen immediately Could use budget reconciliation acts to repeal portions of the ACA Modify current bill to be more effective and affordable 10

11 Affordable Care Act Deliberate and Methodical Approach to Marketplace Plan Design Pricing Network Pace Geography 2017 Open Enrollment Sign-Ups ~1 million 11

12 Indiana Medicaid Expansion Aspects of HIP 2.0 could be Included in a Redesign of the ACA Vice President-Elect Mike Pence (IN Governor during expansion) Seema Verma, CMS Administrator Nominee (Architect of HIP and HIP2.0) 12

13 Medicaid: Growth in all Economic Cycles Expenditures (in billions) (1) Recession 500 Recession Recession (1) Source: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group 13

14 Population Demographics US Population 318M Below 400% FPL 60% Medicare and Medicaid Population 118M 76% * Source: U.S. Census Bureau Current Population Survey (CPS) Last Revised: March,

15 Partnering with State Governments , , Anticipated to go-live Pennsylvania and Nevada operations are pending regulatory approval. 2 Represent Managed Service Organization contracts. 15

16 Who We Are #470 on the Fortune Global 500 list $ billion 2016 total revenues guidance 300 product & market solutions #124 on the Fortune 500 list 29 states with government sponsored healthcare programs (includes awards in 2016 for 2017+) 11.4* million members (as of 9/30/16 and includes 2.8 million TRICARE eligibles) Included in the S&P 500 Index Medicaid Medicare Federal Services Complex Care Commercial Envolve Health 16

17 Health Net Integration 2017 integration efforts primarily focused on systems In 2016 many actions were taken to improve profitability of Health Net product portfolio Do not anticipate recording any Premium Deficiency Reserves in Q416 related to

18 Poised for Continued Growth Demonstrated ability to execute on growth strategies Agility to adapt to the evolving macro healthcare environment Scale, networks, expertise, systems and infrastructure in place 18

19 Guidance Jeff Schwaneke, EVP, CFO & Treasurer

20 2016 Guidance ($ IN MILLIONS, EXCEPT SHARE DATA) Low High Total Revenues $39,400 $40,000 GAAP diluted EPS $2.73 $2.83 Adjusted diluted EPS* $4.28 $4.38 HBR% 87.0% 87.5% Selling, general & administrative (SG&A) % 9.4% 9.9% SG&A% (excl. HNT acquisition related expenses) ** 9.0% 9.5% Effective Tax Rate 54.5% 56.5% Diluted Shares (in millions) * Represents non-gaap measure. Adjusted Diluted EPS excludes Health Net acquisition related expenses of $1.00 to $1.05 and amortization of acquired intangible assets of $0.50 to $0.55. See Appendix for reconciliation of non-gaap measures. ** The SG&A expense ratio excludes Health Net acquisition related expenses of approximately $225 million to $240 million. 20

21 2017 Guidance ($ IN MILLIONS, EXCEPT SHARE DATA) Low High Total Revenues $46,000 $46,800 GAAP diluted EPS $3.78 $4.22 Adjusted diluted EPS* $4.40 $4.85 HBR% 87.0% 87.5% Selling, general & administrative (SG&A) % 9.0% 9.5% SG&A% (excl. HNT acquisition related expenses) 9.0% 9.5% Effective Tax Rate 39.0% 41.0% Diluted Shares (in millions) * Represents non-gaap measure. Adjusted Diluted EPS excludes Health Net acquisition related expenses of $0.01 to $0.03 and amortization of acquired intangible assets of $0.57 to $0.62. See Appendix for reconciliation of non-gaap measures. 21

22 Total Revenue (IN BILLIONS) ~$1.8 ~$(0.7) ~$2.0 ~$3.6 $ $46.8 $ $ Guidance HNT Q1 Carryover Commercial New Markets/ Expansions HIF Moratorium 2017 Guidance 22

23 Health Benefits Ratio ~45 bps ~(35) bps 87.0% % ~(10) bps 87.0% % 2016 Guidance HNT Q1 Carryover HIF Moratorium Commercial/ Product Mix/ Other 2017 Guidance 23

24 SG&A Expense Ratio (EXCLUDING MERGER COSTS) ~15 bps ~10 bps ~5 bps ~(30) bps 9.0% - 9.5% 9.0% - 9.5% 2016 Guidance HNT Q1 Carryover HIF Moratorium Commercial/ Mix Leverage 2017 Guidance 24

25 Interest Rates (IN MILLIONS) Estimated Impact of Change in 3-Month LIBOR: + 25 bps + 50 bps + 75 bps bps Investment Income $8 $15 $23 $30 Interest Expense $6 $12 $18 $24 Net Favorable Pre-tax Impact $2 $3 $5 $6 25

26 Income Tax Rate ~(1,600) bps ~250 bps ~(200) bps 54.5% % 39.0% % 2016 Guidance HIF Moratorium 162(m)(6) Transaction Costs / Other 2017 Guidance Total 2017 forecasted impact of 162(m)(6) is $0.24 per diluted share 26

27 Key 2017 Guidance Assumptions We have applied conservatism to our margin expectations for the Health Insurance Marketplace business as a result of the uncertainty created by the presidential election. This decreased diluted EPS and adjusted diluted EPS ranges by approximately $0.20. Adjusted diluted EPS excludes Health Net acquisition related expenses of $0.01 to $0.03 and amortization of acquired intangible assets of $0.57 to $0.62. Assumes HNT intangible assets of $1.5 billion amortized over 10 year average life. 27

28 Appendix 28

29 Reconciliation of Non-GAAP Measures Included in this presentation is Adjusted Diluted EPS. Management believes that this non-gaap financial measure provides 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. This non-gaap financial measure should not be considered in isolation, or as a substitute for the corresponding GAAP financial measure and may not be comparable to similar measures used by other companies. A reconciliation of this non- GAAP financial measure with the most directly comparable financial measure calculated in accordance with GAAP follows: Reconciliation of GAAP diluted EPS to Adjusted Diluted EPS: Annual Guidance December 31, 2016 Annual Guidance December 31, 2017 GAAP diluted EPS $ $2.83 $ $4.22 Amortization of acquired intangible assets (2) $ $0.55 $ $0.62 Health Net acquisition related expenses (3) $ $1.05 $ $0.03 Adjusted Diluted EPS (1) $ $4.38 $ $4.85 (1) Adjusted Diluted EPS is defined as GAAP diluted net earnings from continuing operations before amortization of acquired intangible assets, one-time Health Net acquisition related expenses, 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 assets per diluted share presented is net of the income tax benefit estimated to be $0.31 to $0.35 and $0.36 to $0.40 for the years ended December 31, 2016 and December 31, 2017, respectively. (3) The Health Net acquisition related expenses per diluted share presented are net of the income tax benefit estimated to be $0.37 to $0.41 and $0.01 to $0.02 for the years ended December 31, 2016 and December 31, 2017, respectively. 29

30 Q&A

31 Post-election Perspective Intro by Jonathan Dinesman, SVP Government Relations

32 Post-election Perspective Doug Holtz-Eakin has a distinguished record as an academic, policy adviser, and strategist. Currently he is the President of the American Action Forum. 32

33 Post-election Perspective Michael Neidorff, Moderator Douglas Holtz-Eakin, President, American Action Forum Panel Discussion Richard Gephardt, CEO Gephardt Group, Former Majority Leader of the U.S. House of Representatives Tommy Thompson, Former Health and Human Services Secretary, Former Governor of Wisconsin Jonathan Dinesman, SVP Government Relations 33

34 2017 Financial Guidance and Investor Day December 16, 2016 SSID: Centene Corp Password: welcome2016 Break

35 Marketplace Anand Shukla, SVP - Commercial Solutions

36 % Marketplace approach and 2017 footprint 2017 enrollment and early indicators Approach to holistic HBR management 36

37 Ambetter Marketplace Strategy Disciplined approach to pricing 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 Coverage for the previously uninsured and underserved populations Focus on lower income, subsidized members under 250% of FPL 37

38 2017 Marketplace Footprint Membership Growth , ,000 Centene State Centene HIM Membership 2016 (P) 550, Open Enrollment Sign-Ups ~1 million 38

39 Enrollment Breakdown HIM Demographic: Gender and Age 2015* 55% 45% 54% 84% 46% 92% 55% 45% (avg. age 41) 2016 (avg. age 42) 2017(P) (avg. age 42) 16% 8% * 2015 does not include Health Net Female Male 39

40 Enrollment Breakdown HIM: Financial Assistance 93% 2015* 93% 84% % 91% 2017(P)* 7% 7% 16% 8% 9% * 2015 does not include Health Net * 2017 excludes AZ auto-assignments Subsidized Unsubsidized 40

41 Enrollment Breakdown HIM Benefit Plan Selection: Metal Tier 78% 2015* 85% 84% % 86% 2017(P) 22% 16% 12% 8% 9% * 2015 does not include Health Net Silver Bronze 3% 5% Gold & Platinum 41

42 Holistic HBR Management $ ADEQUATE RATES EFFECTIVELY MANAGE RISK ADJUSTMENT PROGRAM PCP MEMBER ASSIGNMENTS EARLY WARNING & LEADING INDICATORS TARGETED INTERVENTIONS MONITOR RX AND DIAGNOSTIC SERVICES OUT OF NETWORK & ER 42

43 Well Positioned for the Future Focus on serving the needs of vulnerable, previously un/under insured populations Consumer centric programs that promote personal responsibility Culturally and socioeconomically sensitive delivery of care Deep community relations Pricing discipline Network and benefit design innovation Distribution ecosystem 43

44 Update: Markets Chris Bowers, EVP Markets

45 (in millions) Membership Growth *excludes Correctional, Behavioral Health, Federal Services, ASO and Envolve membership M Total Membership (as of 12/31/15) 4.4M M 0.1M <15k Medicaid Complex Care Commercial Medicare 45

46 (in millions) Membership Growth *excludes Correctional, Behavioral Health, Federal Services, ASO and Envolve membership M, 48% Total Membership (as of 9/30/16) 8.0M, 81% M, 59% 1.3M, 835% 0.3M, 2210% 0.0 Medicaid Complex Care Commercial Medicare 46

47 (in millions) Key Membership Drivers *excludes Correctional, Behavioral Health, Federal Services, ASO and Envolve membership Marketplace LA Medicaid Expansion CNC Only With HNT WA Foster Care FL Express Enrollment 2.0 Other Organic /31/15 9/30/16 Health Net 47

48 Product View - Membership *excludes Correctional, Behavioral Health, Federal Services, ASO and Envolve membership <1% 3% 12% 3% 17% % 2016 As of 9/30/16 70% 85%

49 Product View - Revenue *excludes Correctional, Behavioral Health, Federal Services, ASO and Envolve membership 1% 2% 7% 16% 42% % 2016(P) 44% 33% Total Revenue: $20.6B Total Revenue: $36.5B 49

50 (Number of Health Plans) Change in Market Share (January 1, 2015 to September 30, 2016) Market Share for Medicaid and Complex Care % of Health Plans Key Drivers Provider relationships & Preferential autoassignments 0 Increasing or Holding Flat 50

51 Increasing Scale and Diversification 2015 HEALTH PLANS BY PREMIUM SIZE (P) <$300 million $300 million - $1 billion $1 billion - $3 billion >$3 billion 51

52 Key Membership Drivers in 2017 *excludes Correctional, Behavioral Health, Federal Services, ASO and Envolve membership 2017 Growth Areas New States (NE, NV) Existing Market Expansions Organic Growth Commercial 7%-10% 9/30/ (P) 52

53 New 2017 Market Updates State Projected Start Date NE 1/1/17 NV 7/1/17 Product Mix All populations (acute only for LTSS and I/DD) TANF, CHIP, Medicaid Expansion and Marketplace Estimated Market Size Number of Plans Estimated Range of Membership 230,000 3 plans 75k 80k 425,000 4 plans 35k 50k 53

54 Case Study: HIP

55 Program Objectives Reduction of uninsured rates Increase healthcare access Value-based decision-making Personal responsibility Health promotion Private market coverage 55

56 HIP 2.0 Plan Design HIP Plus Option for all Medicaid Expansion beneficiaries Key elements: POWER account contributions Value-added services No pharmacy co-pays HIP Basic Fall-back option for individuals < 100% FPL Attributes: No required POWER account contributions Less comprehensive benefits Copayments for all services 56

57 State Plan Design State Plus Option for all State Basic beneficiaries Key elements: POWER account contributions No pharmacy co-pays Contribution rollover State Basic Medically frail, Transitional Medical Assistance participants, 1931 low-income parents & caretakers, and low-income year olds Attributes: No required POWER account contributions Comprehensive benefits Copayments for all services 57

58 Program Success HIP Plus 90% Source: The Lewin Group, Indiana Healthy Indiana Plan 2.0: Interim Evaluation Report, July 6, 2016 HIP Plus eligibles that made POWER account contributions to remain in HIP Plus 15

59 Update: Products Jesse Hunter, EVP - Products

60 Product Focus Medicaid Government Sponsored Healthcare & Underserved Populations Complex Care Commercial Medicare Federal Services Envolve 60

61 Product Focus Medicaid Government Sponsored Healthcare & Underserved Populations Complex Care Commercial Medicare Federal Services Envolve 61

62 Medicare Product Overview Portfolio 300,000 members as of 9/30/16 MA MAPD MMP D-SNP C-SNP EGWP $ Med Supp 12 States $3B in revenues annualized 2016(P) ~100 Contracts (PBPs) 4 Star Rating Parent Organization 62

63 Medicare Advantage Update Target <400% FPL Medicare eligibles in Centene Markets Medicare Advantage Penetration Rate $150B in expenditures 31% Leverage Centene Footprint & Local Approach Disciplined Approach on Network & Plan Design 4 Star Rating for Parent Organization 63

64 Medicare Advantage Update 2017 MA Markets Focus on margin expansion for 2017 Executed/executing on operational improvements addressing 2016 PDR Operational integration/platform Best of CNC & HNT systems Builds on HNT s risk contracting platform Legacy HNT Markets New CNC Markets Early learnings regarding 2017 test and learn approach for MA plans Network enhancements Medicare rebranding 2018 and Growth Prospects 2017 guidance includes investment for MA growth Filed notice of intent for an additional 11 states 64

65 Federal Services Product Overview Portfolio 2.8M members TRICARE only as of 9/30/16 TRICARE VA Choice $ $800M in revenues annualized 2016(P) PCCC MFLC 3,650 employees as of 9/30/16 TRICARE T2017 Contract Award 28 Yr. history serving military families 65

66 Federal Services Update Federal Services Footprint TRICARE T2017 Status Return to original legacy HNT TRICARE region in the West Start work in January 2017 for a October 1, 2017 go-live Implementation plan in place TRICARE West Region for T2017 PCCC/Choice Region Initiated kick-off meetings with customers ASO contract for 2.9M eligible military members and families 66

67 Federal Services Update VA Choice Key Highlights Provided authorizations to 700,000+ Veterans Total of 1M+ authorizations appointed Veterans Administration Choice Program appropriated through mid-2017 Expected to be extended until go-live of next generation community care model Engaging with VA and new administration on future of the program Future growth channel for Centene Incremental opportunities through Envolve Specialty Solutions 67

68 Envolve Product Overview Portfolio ~22M lives touched as of 6/30/16 PeopleCare $ $8B+ in revenues annualized 2016(P) Pharmacy Solutions 4,500 Benefit Options employees as of 9/30/16 AL, MD, NY Recent Contract Awards Envolve Center for Health Behavior Change 68

69 Integrated Services Platform Key Highlights Continuum of capabilities Behavioral Health, nurse advice line, telehealth, disease management, health and wellness services Vision and dental services PBM and specialty pharmacy services Back-office services including IT, digital & analytic solutions, and provider & administrative services Support internal health plans / sell externally Key Highlights New leader for Envolve Health Recent contract awards (AL, MD, NY) 2016 quality recognitions and innovation awards (13 in total) Gold Hermes Award Case in Point Platinum Awards Gold Stevie Award MarCom Awards Gold Winner National Health Information Awards Merit Award Golden Bridge Awards Gold Winner Aster Awards Gold Winner 69

70 Centene Product Portfolio Growing Government Sponsored Healthcare Product Portfolio Experience, Expertise and Portfolio of Assets to Succeed Well Positioned to Navigate Evolving Healthcare System 70

71 Update: International Cynthia Brinkley, EVP - Global Corporate Development

72 International Growth Strategy Governments Share Similar Objectives Improved Health Outcomes Modernize Healthcare Infrastructure Integrated Approach to Care Creating promising opportunities to apply the company s Expertise IT Systems & Technologies Capabilities 72

73 Establishing Our Robust International Platforms 2014 Entered into Spain and UK through acquisitions of non-controlling interests in Ribera Salud and the Practice Group Integrated healthcare coverage under public-private partnership arrangements with regional governments Additional specialty segment health IT, laboratory and diagnostic services Primary and specialty care services through one of the largest provider networks for NHS England Additional services back office support and referral management 73

74 Ribera Salud Investment The Ribera Salud Model covers building and maintenance of hospitals and primary care centers for years Reimbursement through capitated payments based on the service area s population Participates in four public-private partnerships (PPPs) in the Valencia region Alzira Denia Elche Torrevieja Other specialty service offerings IT & HR consulting, laboratory, and imaging diagnostics Respected brand enhances exposure and credibility in other international markets Additional two PPP minority investments in Peru (near Lima) 74

75 UK Primary & Specialty Care The Practice Group is one of the largest primary care providers for NHS England Operates 48 GP primary care facilities across England and serves over 200,000 patients, a nearly 50% increase over the last two years Provides other community-based services for the NHS, and is the largest non-hospital provider of ophthalmology in the UK Also offers other specialty, back office support, and referral management services Centene obtained controlling stake of the Practice Group in

76 UK Health System Modernization The current challenges of UK s National Health Service (NHS) Budget Pressure Aging Population Negative Health Trend Rising Cost Trend The NHS England s Five Year Forward View sets out a blueprint for new integrated models of care 76

77 Strategic Global Partnerships Emerging Integrated Care Opportunities Governments Share Similar Objectives Improved Health Outcomes Modernize Healthcare Infrastructure Integrated Approach to Care Existing systems and capabilities Collaboration with local governments Local market leader partnerships Centene International Approach 77

78 Growth and Diversification Cynthia Brinkley, EVP - Global Corporate Development

79 Areas of Focus Market Size and Pipeline Growth & Diversification Opportunities 79

80 Addressable Markets Pipeline Medicaid $658B Medicare $724B Health Insurance Marketplace $60B Correctional Healthcare $9B $1.65 trillion* *Data based on CBO projections and Company estimates for FY18 Federal Services $5B Specialty Services International $150B 80

81 Pipeline Medicaid Medicare Health Insurance Marketplace Correctional Healthcare $215 billion Federal Services Specialty Services International 81

82 2017 Revenue Visibility KNOWN GROWTH DRIVERS TX Benefit Expansion HIM Market Expansions NE & NV Contract Wins LA Medicaid Expansion Full Year of HNT New Envolve Contracts $46.4B 2017 TOTAL REVENUE 17% GROWTH (from 2016 Revenue Guidance mid-point) 82

83 Medicaid Pipeline Realization ($ IN BILLIONS) Total Pipeline $113.6B 56 Total Contracts Targeted Pipeline $82.1B 40 Targeted Contracts Realized or Anticipated Revenue* $16.5B 32 Contract Wins *Anticipated revenue includes 2016 contract wins that have not yet gone live 83

84 Potential 2017 Growth Opportunities New RFPs/ Reprocurements New Medicaid Markets Medicare Advantage Expansion New M&A Opportunities 84

85 Growth Verticals REPRESENTATIVE GROWTH CATEGORIES Existing Markets New Markets & Specialty Medicare Advantage M&A 85

86 Growth Verticals REPRESENTATIVE GROWTH CATEGORIES Existing Markets New Markets & Specialty Medicare Advantage M&A 86

87 All Products, All Markets Government Solutions AL 1 AZ AR CA FL GA IL IN KS LA MD MA MI MN MS MO NE NH NM NV OH OR PA SC TN TX VT WA WI TANF Medicaid Expansion CHIP ABD (non-duals) ABD (Medicaid only dual-eligibles ) Dual Demonstrations (including LTSS) Intellectually/Developmentally Disabled Long-Term Services and Supports Foster Care 29 2 ~300 Medicare Special Needs Plan Medicare Advantage Health Insurance Marketplaces Commercial Insurance (Lrg & Sm Group) Correctional Healthcare Specialty Health Solutions AL AZ AR CA FL GA IL IN KS LA MD MA MI MN MS MO NE NH NM NV OH OR PA SC TN TX VT WA WI Pharmacy Benefits Behavioral & Specialty Therapies Life & Health Management Primary Care Solutions for Complex Pop. Managed Vision Dental Benefits Telehealth (Nurse Triage/Education Line) STATES INTERNATIONAL MARKETS PRODUCT SOLUTIONS 87

88 Existing Markets Recent Successes INDIANA MISSOURI GEORGIA Hoosier Healthwise & Healthy Indiana Plan Received award for reprocurement of state s managed care programs (1/1/17 go-live) MO HealthNet Reprocurement Received award for expanded, statewide managed care program (5/1/17 go-live) Georgia Families Reprocurement Received award for reprocurement of state s managed care program (7/1/17 go-live) 88

89 Growth Verticals REPRESENTATIVE GROWTH CATEGORIES Existing Markets New Markets & Specialty Medicare Advantage M&A 89

90 New Markets Recent Successes NEBRASKA PENNSYLVANIA NEVADA Heritage Health Implementation underway (1/1/17 go-live) Community HealthChoices Received awards in all five regions (1/1/18 go-live) Managed Care Program Award announced Nov. 3 (7/1/17 go-live) 90

91 Growth Verticals REPRESENTATIVE GROWTH CATEGORIES Existing Markets New Markets & Specialty Medicare Advantage M&A 91

92 Envolve RECENT SUCCESSES Addressing market needs and driving external revenue growth via an integrated platform that leverages the strength of Centene s specialty solutions Health Plan management services in NY, MD and AL Commercial Behavioral Health (ASO) and EAP for 20,000 Operating Engineers Union members On.Demand diabetes management for 43,000 county employees and dependents 92

93 Growth Verticals REPRESENTATIVE GROWTH CATEGORIES Existing Markets New Markets & Specialty Medicare Advantage M&A 93

94 Medicare Advantage GROWTH STRATEGY Building upon the strength of Centene s local approach, while maximizing centralized efficiencies Leveraging 4-Star parent performance 2017 proof of concept in four states Prepping for 2018 expansions Incorporating early learnings from 2017 Annual Election Period Anticipating new Medicare opportunities with change in administration 94

95 Growth Verticals REPRESENTATIVE GROWTH CATEGORIES Existing Markets New Markets & Specialty Medicare Advantage M&A 95

96 M&A Strategic Objectives Capability CONSISTENT CRITERIA & FINANCIAL DISCIPLINE Scale Value Creation 96

97 Q&A

98 Thank You