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The MA business is likely to contract following tweaks that will cut government payouts from next year, the company has said, while Medicaid memberships are expected to take a knock from the removal of pandemic-related relief measures.
On an adjusted basis, Centene (NYSE:CNC) now expects 2024 profit of more than $6.60 per share, compared with its previous forecast of at least $7.15.
The company had warned in February it expected negative profit margins in its MA business in 2024 temporarily, after U.S. Centers for Medicare and Medicaid Services (CMS) also cut star rating for the plans in October.
Shares of larger rivals UnitedHealth (NYSE:UNH) and Elevance came under pressure earlier this month despite both beating first-quarter earnings estimates on investor worries related to higher future medical costs.
Centene’s quarterly health benefits ratio, which measures medical costs in relation to premiums collected, was 87% for the first quarter, compared with Refinitiv IBES estimates of 87.26%.
Excluding items, Centene earned $2.11 per share, compared with estimates of $2.09.
The company raised its profit outlook for this year to at least $6.40 per share from previous forecast of between $6.25 and $6.40, expecting growth from its business that offers private health insurance plans to individuals and families.
