WASHINGTON (dpa-AFX) - Centene Corp. (CNC) announced the withdrawal of its previously issued 2025 GAAP and adjusted earnings per share guidance. This decision follows a significant and unexpected shift in marketplace risk adjustment dynamics, which materially impact the company's financial outlook.
The company said it recently reviewed early 2025 Health Insurance Marketplace data, provided by Wakely, an independent actuarial firm. This dataset covers 22 of Centene's 29 Marketplace states-representing approximately 72% of its Marketplace membership-and is based on carrier-submitted information.
Preliminary analysis of the data, combined with discussions with Wakely, indicates that overall market growth in these states has fallen short of expectations. Moreover, the aggregate market morbidity-the projected health risk profile-is significantly higher than what the Company had assumed in its earlier financial guidance. These findings have led to a major revision of Centene's projected risk adjustment revenue transfers.
Based on data through April 30 and internal projections for the remainder of the year, Centene now estimates a reduction of approximately $1.8 billion in net risk adjustment revenue for 2025, equating to an adjusted earnings per share impact of roughly $2.75. This estimate is based on state-level claims data, membership projections, and market-wide morbidity trends.
The company has not yet received comparable data for the remaining seven Marketplace states. However, given the patterns identified in the initial 22, it anticipates further downside adjustments to risk adjustment revenue expectations and corresponding earnings per share impact.
The company said it is in the process of closing the second quarter and analyzing data, including in Marketplace and Medicaid, and expects to report the second quarter 2025 results and provide additional insights on July 25, 2025.
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