Latest news with #SarahLondon
Mint
a day ago
- Business
- Mint
Centene Slashes 2025 Guidance and Posts Surprise Loss
(Bloomberg) -- Centene Corp. cut its annual guidance and reported a surprise quarterly loss Friday, yet another disappointment for the embattled health insurer that's been grappling with problems in its Affordable Care Act business. The company now expects adjusted earnings of $1.75 a share in 2025, far less than the more than $7.25 a share it projected earlier in the year. The figure could fall even further, to $1.25 a share, depending on the progress Centene makes in its Medicaid business. Centene had pulled its 2025 guidance earlier this month, citing precipitously rising risks in the ACA business. Since then, the company's struggles seem to have heightened. At the time it said insurance market trends that veered from its assumptions threatened $1.8 billion in revenue, while Friday it increased that figure to $2.4 billion based on more data. Shares dropped as much as 16% before markets opened in New York Friday though later pared losses. They had fallen 56% since the start of the year through Thursday's close. The insurer chalked up the second-quarter loss to a miscalculation in its Affordable Care Act, or ACA, business — the same reason it pulled its outlook earlier this year. Insurers receive compensation for taking on sicker patients in that program and Centene said it would receive less of that money than previously expected. For the second quarter, Centene announced an adjusted loss per share of 16 cents. Wall Street analysts expected a profit of 55 cents per share. 'We are disappointed by our second-quarter results, but we have a clear understanding of the trends that have impacted our performance, and are working with urgency and focus to restore our earnings trajectory,' Sarah London, chief executive officer of Centene, said in the company's earnings statement. In the second quarter, Centene spent 93% of premium revenues of medical costs, higher than the average analyst expectation of 91.6%. Investors prefer a lower number. The insurer said its health benefits ratio, the percentage of premium revenues spent on medical costs, rose from last year, largely because of the ACA revenue issue. Centene said it also saw higher medical costs in ACA plans, as well as increased costs in Medicaid, which mostly came from behavioral health, home health, and expensive drugs. Because of various government programs that are likely to reduce health care coverage, patients may be seeking more medical care now while they still can, boosting medical spending, the company said in a regulatory filing Friday. --With assistance from John Tozzi. (Updates with guidance starting in first paragraph.) More stories like this are available on
Mint
a day ago
- Business
- Mint
Centene Shares Drop After Insurer Reports Surprise Losses
(Bloomberg) -- Centene Corp. reported a surprise quarterly loss Friday, yet another disappointment for the embattled health insurer, which recently pulled its 2025 guidance citing problems in its Affordable Care Act business. Shares dropped 12.7% before markets opened in New York. They had fallen 56% since the start of the year. Centene said it would provide updated guidance on a conference call with analysts, which starts at 8 a.m. New York time, an unusual move given the insurer normally shares its outlook in earnings releases. 'Given how weak results were in the quarter, the lack of guidance in the release could mean that 2025 guidance is weaker than analysts had been projecting,' Morningstar analyst Julie Utterback said. After the earnings miss, Centene executives might want to 'hold investor hands through the rest of 2025 and beyond,' she said. The insurer chalked up the second-quarter loss to a miscalculation in its Affordable Care Act, or ACA, business — the same reason it pulled its outlook earlier this year. Insurers receive compensation for taking on sicker patients in that program and Centene said it would receive less of that money than previously expected. For the second quarter, Centene announced an adjusted loss per share of 16 cents. Wall Street analysts expected a profit of 55 cents per share. 'We are disappointed by our second-quarter results, but we have a clear understanding of the trends that have impacted our performance, and are working with urgency and focus to restore our earnings trajectory,' Sarah London, chief executive officer of Centene, said in the company's earnings statement. In the second quarter, Centene spent 93% of premium revenues of medical costs, higher than the average analyst expectation of 91.6%. Investors prefer a lower number. The insurer said its health benefits ratio, the percentage of premium revenues spent on medical costs, rose from last year, largely because of the ACA revenue issue. Centene said it also saw higher medical costs in ACA plans, as well as increased costs in Medicaid, which mostly came from behavioral health, home health, and expensive drugs. Because of various government programs that are likely to reduce health care coverage, patients may be seeking more medical care now while they still can, boosting medical spending, the company said in a regulatory filing Friday. --With assistance from John Tozzi. (Updates with analyst comment in third paragraph.) More stories like this are available on
Time of India
3 days ago
- Business
- Time of India
Centene raises Wall Street optimism that Medicaid insurers can improve profits
New York: Wall Street regained confidence in Medicaid insurers after Centene said on Friday it expects to be able to raise rates charged to states for 2026 health plans for low-income Americans and strengthen profit margins . Insurer shares rose across the board. Centene shares were up 5% in early afternoon trading after falling 16% on the company's announcement of a second-quarter loss and forecast cut. Rivals UnitedHealth, CVS Health and Humana rose 1.61%, 2.69% and 3.45%, respectively. All three report earnings next week. Centene in an earnings call reassured investors it would work with states to ensure their payments for Medicaid plans match the company's increased medical costs for 2026. "Our goal is to reprice 100%" of plans, said company CEO Sarah London. Insurers are paid a set amount by states for Medicaid plans, which are jointly funded with the federal government. Centene, UnitedHealth and Elevance have said this year that state reimbursements for these plans have lagged behind actual costs of care. Cautious investors have been looking for Medicaid health plan design changes and strategic geographic changes by the companies to reduce use of healthcare services . New work requirements for Medicaid recipients in President Donald Trump's signature tax-cut and spending bill have made some investors worry that healthy people could disenroll in coming years. The bill requires states to verify certain members are working or volunteering a minimum of 80 hours per month to qualify for Medicaid coverage starting in 2027. After a COVID-19 era requirement to keep people enrolled expired in 2023, Medicaid plans redetermined each person's eligibility. This pushed members off, changing the mix of sick and healthy participants, and some Medicaid insurers struggled. "The Medicaid redeterminations have proven to be far more disruptive than anyone thought," said Jeff Jonas, a portfolio manager at Gabelli Funds. "The entire industry is focused on restoring margin over winning new contracts and membership." More detailed data could justify midyear price increases, said Kevin Gade, chief operating officer at Bahl & Gaynor, and correct mismatched rates set by states after the pandemic. More data over the next year will also enable insurers to improve cost management techniques and raise rates paid by states, Gade said. "With enough data you can take care of the problem."
Yahoo
4 days ago
- Business
- Yahoo
Centene raises Wall Street optimism that Medicaid insurers can improve profits
By Amina Niasse NEW YORK (Reuters) -Wall Street regained confidence in Medicaid insurers after Centene said on Friday it expects to be able to raise rates charged to states for 2026 health plans for low-income Americans and strengthen profit margins. Insurer shares rose across the board. Centene shares were up 5% in early afternoon trading after falling 16% on the company's announcement of a second-quarter loss and forecast cut. Rivals UnitedHealth, CVS Health and Humana rose 1.61%, 2.69% and 3.45%, respectively. All three report earnings next week. Centene in an earnings call reassured investors it would work with states to ensure their payments for Medicaid plans match the company's increased medical costs for 2026. 'Our goal is to reprice 100%' of plans, said company CEO Sarah London. Insurers are paid a set amount by states for Medicaid plans, which are jointly funded with the federal government. Centene, UnitedHealth and Elevance have said this year that state reimbursements for these plans have lagged behind actual costs of care. Cautious investors have been looking for Medicaid health plan design changes and strategic geographic changes by the companies to reduce use of healthcare services. New work requirements for Medicaid recipients in President Donald Trump's signature tax-cut and spending bill have made some investors worry that healthy people could disenroll in coming years. The bill requires states to verify certain members are working or volunteering a minimum of 80 hours per month to qualify for Medicaid coverage starting in 2027. After a COVID-19 era requirement to keep people enrolled expired in 2023, Medicaid plans redetermined each person's eligibility. This pushed members off, changing the mix of sick and healthy participants, and some Medicaid insurers struggled. 'The Medicaid redeterminations have proven to be far more disruptive than anyone thought," said Jeff Jonas, a portfolio manager at Gabelli Funds. "The entire industry is focused on restoring margin over winning new contracts and membership." More detailed data could justify midyear price increases, said Kevin Gade, chief operating officer at Bahl & Gaynor, and correct mismatched rates set by states after the pandemic. More data over the next year will also enable insurers to improve cost management techniques and raise rates paid by states, Gade said. "With enough data you can take care of the problem.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
4 days ago
- Business
- Reuters
Centene raises Wall Street optimism that Medicaid insurers can improve profits
NEW YORK, July 25 (Reuters) - Wall Street regained confidence in Medicaid insurers after Centene (CNC.N), opens new tab said on Friday it expects to be able to raise rates charged to states for 2026 health plans for low-income Americans and strengthen profit margins. Insurer shares rose across the board. Centene shares were up 5% in early afternoon trading after falling 16% on the company's announcement of a second-quarter loss and forecast cut. Rivals UnitedHealth (UNH.N), opens new tab, CVS Health (CVS.N), opens new tab and Humana (HUM.N), opens new tab rose 1.61%, 2.69% and 3.45%, respectively. All three report earnings next week. Centene in an earnings call reassured investors it would work with states to ensure their payments for Medicaid plans match the company's increased medical costs for 2026. 'Our goal is to reprice 100%' of plans, said company CEO Sarah London. Insurers are paid a set amount by states for Medicaid plans, which are jointly funded with the federal government. Centene, UnitedHealth and Elevance have said this year that state reimbursements for these plans have lagged behind actual costs of care. Cautious investors have been looking for Medicaid health plan design changes and strategic geographic changes by the companies to reduce use of healthcare services. New work requirements for Medicaid recipients in President Donald Trump's signature tax-cut and spending bill have made some investors worry that healthy people could disenroll in coming years. The bill requires states to verify certain members are working or volunteering a minimum of 80 hours per month to qualify for Medicaid coverage starting in 2027. After a COVID-19 era requirement to keep people enrolled expired in 2023, Medicaid plans redetermined each person's eligibility. This pushed members off, changing the mix of sick and healthy participants, and some Medicaid insurers struggled. 'The Medicaid redeterminations have proven to be far more disruptive than anyone thought," said Jeff Jonas, a portfolio manager at Gabelli Funds. "The entire industry is focused on restoring margin over winning new contracts and membership." More detailed data could justify midyear price increases, said Kevin Gade, chief operating officer at Bahl & Gaynor, and correct mismatched rates set by states after the pandemic. More data over the next year will also enable insurers to improve cost management techniques and raise rates paid by states, Gade said. "With enough data you can take care of the problem.'
