Centene Corporation removes 2025 guidance

Centene Corporation, a prominent healthcare enterprise, recently announced the withdrawal of its 2025 GAAP and adjusted diluted earnings per share (EPS) guidance due to significant fluctuations in the health insurance marketplace for the upcoming year.

After examining the 2025 industry data obtained from Wakely, an independent actuarial firm, representing the majority of Centene’s Marketplace membership across 22 states, the company identified unexpected challenges. The market growth in these states was lower than anticipated, and the aggregate market morbidity was significantly higher than the company’s initial assumptions for risk adjustment revenue transfer. This analysis resulted in a considerable reduction in the net risk adjustment revenue transfer expectation for the full year, estimated at approximately $1.8 billion, translating to an adjusted diluted EPS impact of around $2.75.

While the analysis focused on 22 states, Centene also anticipates similar trends in its remaining Marketplace states, suggesting a potential further reduction in net risk adjustment revenue transfer with a corresponding impact on adjusted diluted EPS. To address these changes, the company has initiated the process of revising its 2026 Marketplace rates to align with the higher projected baseline of Marketplace morbidity.

The final risk adjustment results for 2024, released by the Centers for Medicare and Medicaid Services (CMS), were consistent with the company’s expectations. Centene’s Medicaid business experienced a step-up in medical cost trend, particularly in areas like behavioral health, home health, and high-cost drugs in specific geographies. This led to an increase in the Medicaid Health Benefits Ratio (HBR) for the second quarter of 2025 compared to the first quarter.

On a positive note, Centene’s Medicare Advantage and Medicare Prescription Drug Plan businesses performed better than expected in the second quarter of 2025. The company’s focus on strong selling, general, and administrative expense leverage on its consolidated premium and service revenue growth has remained effective.

Centene is currently analyzing data to finalize its second-quarter results, including insights from the Marketplace and Medicaid sectors. The company plans to release its second-quarter 2025 results and provide further details on July 25, 2025.

Centene Corporation, recognized as a Fortune 500 company, is dedicated to improving healthcare accessibility and quality to enhance people’s well-being. With a localized approach and a commitment to serving government-sponsored and commercial healthcare programs, Centene offers affordable and high-quality products to a significant portion of the population, including Medicaid and Medicare members, as well as individuals and families enrolled in the Health Insurance Marketplace.

In conclusion, Centene’s decision to withdraw its 2025 guidance reflects the challenges posed by the changing landscape of the healthcare marketplace. The company remains focused on adapting to these shifts and providing vital services to its members across the nation.