Amid regulatory uncertainties, high utilization, and changing marketplace rules, payers aren’t doing great right now.
UnitedHealth was the first to retract its prediction for its annual performance in May after Medicare Advantage utilization surpassed its highest expectations. Now, it’s Centene’s turn in the spotlight.
What happened? Centene pulled its 2025 revenue guidance on July 1 after actuarial firm Wakely predicted fewer people would get Affordable Care Act (ACA) marketplace coverage than expected, and those who did would be sicker—and costlier.
Wakely’s analysis included 22 of Centene’s 29 marketplace states, making up about 72% of the company’s individual marketplace plan members. The company reported that as of March 31, it had 5.6 million marketplace members.
The company also shared that it saw a “step-up” in Medicaid costs, particularly in New York and Florida, where it’s a market leader.
Following this announcement, the company’s shares plummeted nearly 40% from $56.65 to $33.78. The stock has since fallen further, dipping below $30 at time of publication amid policy changes in the past two weeks from the One Big Beautiful Bill Act, which could hurt profits in the future given that the majority of Centene’s business is government-sponsored healthcare.
“Current risks outweigh future opportunities,” Paige Meyer, an equity analyst for independent research group CFRA Research, wrote in a July 12 research note on Centene.
Centene declined to provide comment beyond its press release.
Seeking solutions. Centene said in its July 1 release it plans to refile its 2026 marketplace rates for some states, increasing them in order to reflect the higher member acuity.
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But while Centene has a “meaningful path” to repricing its 2026 rates, it will also “be repricing at a time when the ACA exchange risk pools are potentially worsening, which could make the process more challenging,” JPMorgan analysts wrote in a July 2 research note.
The JPMorgan analysts pointed to several policy changes threatening the ACA marketplace risk pools.
For instance, on June 20, the federal government finalized the Marketplace Integrity and Affordability rule, which takes steps like “strengthening” income verification. On July 4, President Donald Trump signed a reconciliation bill that experts allege will make it harder to enroll in the ACA marketplace due to factors like shorter open enrollment periods and the eventual end of automatic reenrollment.
On top of that, pandemic-era ACA enhanced premium subsidies are set to expire at the end of the year, and the government hasn’t moved to extend them.
The Congressional Budget Office predicts these changes could raise the number of uninsured people by 16 million by 2034. Nearly 25 million people were uninsured in 2023, according to KFF.
Centene isn’t alone. JPMorgan’s analysts added in a separate July 14 report that the Wakely analysis indicates the ACA marketplace member pool as a whole has “deteriorated” in 2025.
“This could be a pressure point for [managed care organizations],” they wrote.
Molina, a California insurer that specializes in Medicaid, Medicare, and ACA plans, cut its guidance soon after Centene on July 7. The company reported 4.8 million Medicaid, 260,000 Medicare, and 662,000 ACA marketplace members as of March 31.