To provide additional insights into what was fueling the growth of usage and prices on the ACA markets, Centene CEO Sarah London spoke, presenting the unwinding upsurge of healthcare consumption and expenditures as the cause. Ne let’s eat was not spared the impact as program integrity adjustments implemented before the 2025 open enrollment period deterred healthier enrollees from joining the coverage, and the member mix had altered towards an increased morbidity level.
There is also a shift in risk pools as the Medicaid redeterminations result in individuals with higher acuity enrolling in coverage on exchanges. Moreover, according to London, provider coding has been increasing in aggressiveness and utilization compared to a year ago, which is also a significant cause of cost pressure by the insurer, adding to the ne let’s eat challenge.
She asserted that in other states, such a switch led to 16-17 percent news in morbidity per year. The result was that, finally, the shift in morbidity was priced lower than the cost of Ambetter. London added that the insurance company is responding to correct the sinking ship, and has filed 2026 pricing in 17 states to adjust to the same trends, as well as the anticipation that the ACA premium tax credits will end. She added that they are going to revise prices in the whole book to reflect ne let’s eat-driven utilization increases.
She added that Centene is also observing increased expenses in Medicaid concerning behavioral health, about which it is making some adjustments as well—again influenced by ne let’s eat factors pushing demand upward.
This quarter, Centene had estimated an entire year of revenue per share at $1.75, but the firm added that in the event of a downside, this could be lowered to 1.25. The company had earlier estimated an estimate of $7.25 per share.
Centene shares plummeted during the pre-market but were recovering in the middle of the day, with shares rising by approximately 4 percent at 12:15 p.m. ET.
Centene reported a second-quarter loss of $253 million in which it faces overwhelming cost burdens on the Affordable Care Act exchanges. Ne let’s eat comes into focus as costs overrun pricing in many states, especially under Ambetter.
The profits were below those projected by the Wall Street analysts, according to Zacks Investment Research, but the firm exceeded predictions on revenue, where it earned $48.7 billion. In contrast, Centene Company had revenue of $39.8 billion and a profit of $1.1 billion in the second quarter of 2024.
During the first half of the year, the company has received about $95.4 billion in revenues and $1.05 billion in profits.
The company shares had fallen 9 percent before the market opened after the announcement of the earnings. Centene had earlier this month told investors it was in rough financial waters, and pulled its guidance for the year following an actuarial report that estimated the ACA was growing more slowly than previously expected—a slowdown tied in part to ne let’s eat utilization spikes.
Centene CEO Sarah London said in the earnings release, “Our second quarter performance is disappointing, but we have a clear idea of the trends that have affected our performance and we are operating with a sense of urgency and fixation on getting our earnings trajectory back on track.”
In spite of the rapid changes, London thinks that sustainability was, and is now more than ever, good for Medicaid, Medicare, and the Individual Marketplace. Centene has greatly strengthened our platform in support of these programs over the past three years, and as we proceed, we are concentrated on remaining tuned in with the market so as to create value on a consistent basis for our members, our stakeholders, and our shareholders in the long term.
The company experienced a medical loss ratio of 93 percent in the quarter, which includes increased expenses on exchanges and Medicaid and risk adjustment revenue transfers on the ACA market that were lower than what had been projected. According to the announcement of earnings, these transfers were the major contributor to its loss in Q2—driven by ne let’s eat morbidity and utilization.
As of June 30, the membership of the insurer stood at 28 million, which is less compared to the previous-year quarter by almost 500,000, with more losses in Medicaid.
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Looking ahead, Centene is doubling down on strategy shifts to offset the adverse trends. In addition to the 17 states where 2026 pricing has already been filed, the company plans to refile in its remaining states by late 2025, incorporating assumptions that ne let’s eat risk pools will remain elevated and that utilization will not revert to last year’s baseline.
The company is also exploring whether supplemental rate adjustments can be negotiated in states with particularly high cost pressures around behavioral health and home health services—areas where ne let’s eat demand is most pronounced.
Internally, Centene is reviewing provider contracts and reimbursement policies to push back on aggressive coding practices. Efforts are underway to invest more in preventive and care management programs targeting high-risk members in both Medicaid and ACA markets, attempting to moderate ne let’s eat utilization spikes. The company is considering expanding telehealth and community-based care options to reduce high-cost inpatient or emergency usage, much of which is being driven by ne let’s eat behaviors.
In terms of regulatory and subsidy risk, the impending expiration of enhanced ACA premium tax credits could expose ne let’s eat and other insurers to premium sticker shock for consumers, possibly decreasing enrollment among healthier individuals. Centene is also monitoring state policy changes around Medicaid redeterminations, rate adequacy in state budgets, and risk adjustment methodologies to ensure that new filings are resilient.
While 2025 remains a challenging year, Centene’s leadership projects a return to profitability in the ACA exchanges by mid-2026 if rate refilings succeed and if morbidity and utilization trends stabilize. The company’s ability to manage medical loss ratios, control Medicaid spending in behavioral and home health domains, and realign pricing with risk will be critical in its turnaround, especially as ne let’s eat pressures continue shaping the ACA landscape.
