Centene Takes A Hit As Medicaid Membership Shrinks
Centene Takes A Hit As Medicaid Membership Shrinks
Vandana SinghTue, February 10, 2026 at 2:31 AM UTC
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U.S. healthcare insurance provider Centene Corporation (NYSE:CNC) stock fell on Friday on a mixed outlook for fiscal 2026.
Earnings Snapshot
The company reported a fourth-quarter 2025 adjusted loss of $1.19, beating the consensus loss of $1.22 per share, a turnaround from an income of 80 cents a year ago.
Centene's sales surged from $40.81 billion to $49.73 billion, exceeding the consensus estimate of $48.39 billion.
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For the fourth quarter of 2025, premium and service revenues increased 23% to $44.7 billion, primarily driven by premium yield and membership growth in the PDP business, overall market growth in the Marketplace business, as well as rate increases and state-directed payments in the Medicaid business, partially offset by lower Medicaid membership.
Centene's health benefits ratio (HBR) is 94.3%, up from 89.6% a year ago.
The increase was primarily driven by the impact of higher Marketplace morbidity in 2025 on medical costs and program changes in the PDP business as a result of the Inflation Reduction Act (IRA) compared to the fourth quarter of 2024.
The Medicaid HBR decreased by 40 basis points, primarily driven by rate and revenue increases, partially offset by higher medical costs largely related to behavioral health and home health.
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Total membership across Centene's portfolio declined to 27.63 million from 28.60 million a year ago, predominantly due to a reduction in Medicaid membership from 13.00 million to 12.52 million.
Commercial membership jumped from 4.81 million to 5.99 million.
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Management Commentary
"We are pleased to end a challenging year carrying positive momentum from the extensive and decisive actions taken in the back half of 2025 with the goal of restoring Marketplace profitability and stabilizing the trajectory of our Medicaid business," said Centene CEO Sarah London.
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Guidance
Centene expects fiscal 2026 adjusted earnings of more than $3 per share, compared to the consensus of $2.94.
"As we look to 2026, we are positioned to deliver meaningful margin improvement and renewed adjusted diluted EPS growth. We expect full year 2026 adjusted diluted EPS to be greater than $3.00, marking important progress toward restoring the enterprise's embedded earnings power all while continuing to work to provide access to affordable, high-quality care for our members," the CEO commented on Friday.
The company expects 2026 sales of $186.5 billion-$190.5 billion compared to the consensus of $193.43 billion, including premium revenues between $170 billion and $174 billion.
The health benefits ratio is expected to range between 90.9%-91.7%.
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