Centene’s concerns over Medicare market overshadow Q1 profit beat

Centene, a major health insurer, reported a strong first-quarter earnings report on Friday, but concerns over the Medicare market have dampened the excitement. The company warned that its Medicare insurance business would face challenges next year, impacting its profitability.

CEO Sarah London highlighted the difficulties in the Medicare Advantage (MA) market, citing lower-than-expected final rates for 2025 reimbursements and rising medical costs due to increased demand for healthcare among older adults. This news comes on the heels of rival Humana withdrawing its 2025 profit forecast for similar reasons.

Despite the concerns, Centene posted upbeat first-quarter profit and raised its annual profit forecast, driven by higher premiums from its commercial insurance plans. The company raised its full-year premium revenue forecast by $1 billion and now expects an annual profit of more than $6.80 per share.

Shares of Centene were down 3% in morning trade following the news, but the company remains optimistic about its financial outlook. With decisions on premiums and benefits for 2025 looming, CFO Andrew Asher emphasized the importance of approaching the challenges with caution.

Overall, Centene’s strong performance in the first quarter and positive outlook for the year ahead demonstrate its resilience in the face of market uncertainties. Investors will be watching closely as the company navigates the changing landscape of the Medicare market.