Centene covers 2.1 million fewer people than it did a year ago, and on Tuesday it raised its profit guidance
Centene insures 2.1 million fewer people than it did a year ago. On Tuesday it raised its earnings guidance.
Total at-risk membership was 25,885,400 at June 30 against 28,004,900 twelve months earlier. Almost all of the difference sits in one line. Marketplace membership fell to 3,494,700 from 5,862,800, a loss of 2,368,100 people, or 40 percent of the book. Total Medicaid fell by 709,000. Running the other way, the Medicare prescription drug plan business added 957,200 members and now covers 8,803,000, which is more people than Centene has in any other single line except traditional Medicaid.
The financial result moved in the opposite direction to the membership. Premium and service revenues rose 4 percent to $44,375m, total revenues were $53,579m, and the consolidated health benefits ratio came down to 89.6 percent from 93.0 percent. GAAP diluted earnings per share were $2.19 and the adjusted figure was $2.51. Operating cash flow was $3.6bn. By segment the health benefits ratios were 79.2 percent in Commercial, 89.5 percent in Medicare and 93.9 percent in Medicaid, which the company describes as in line with expectations.
Set the Commercial numbers side by side and the shape of the quarter is visible. Membership in that segment fell 37 percent. Revenue fell 7 percent, to $9,356m. Centene attributes the lower health benefits ratio in Marketplace to improved pricing and to risk transfer reflecting the acuity of the membership it still has.
Why 2.4 million people left is not in the document. The release reports the count, notes that lower Marketplace and Medicaid membership partly offset revenue gains elsewhere, and offers no explanation for the decline. It is the largest single fact in the release and the one the company says least about.
Guidance went up across the board. Total revenues guidance rose by $6.0bn to a range of $193.5bn to $197.5bn, premium and service revenues by $2.0bn to $173.0bn to $177.0bn, and investment and other income by $50m to $1.50bn. The 2026 GAAP diluted earnings per share floor is now greater than $3.11 and the adjusted floor greater than $4.80. Centene puts approximately $0.50 of that increase down to non-recurring items in the Medicare and Commercial segments, a caveat it printed in its own bullet points at the top of the release. Sarah M. London, the chief executive, called the quarter and the outlook "meaningful milestones on our path to restoring profitability".
Two lines need care before they are compared with last year. The Centers for Medicare and Medicaid Services moved Medicare-Medicaid Plan duals onto Dual Eligible Special Needs Plans at the start of 2026, so members who counted as High Acuity Medicaid in 2025 count as Medicare now. High Acuity Medicaid fell by 227,400 and Medicare by 46,900 on that basis.
The same filing carries a board change. Kenneth Burdick told the company on July 23 that he was resigning as a director effective July 28, and the filing states the resignation was not the result of any dispute or disagreement over the company's operations, policies or practices. Paul Diaz was elected the same day to fill the vacancy, with a term running to the 2027 annual meeting, and joins the Audit Committee and the Quality and Compliance Committee. He has been a managing partner at the healthcare private equity firm Cressey and Company since May 2025 and was chief executive of Myriad Genetics from August 2020 to April 2025.
