Centene Posts $6.6B Loss Amid Market Challenges, Raises 2025 Outlook

Centene Corporation, a major player in the U.S. healthcare insurance sector, reported a substantial net loss of $6.6 billion for the third quarter of 2025, primarily due to a non-cash goodwill impairment charge of $6.7 billion. Despite this setback, the company has raised its full-year earnings outlook, signaling confidence in its underlying operations and strategy.

Massive Writedown Reflects Market Realities

The St. Louis-based insurer's significant impairment charge is designed to realign the company's book value with its market value, which has seen a dramatic decline this year. In July, Centene's stock hit its lowest point in a decade following disappointing second-quarter results. The writedown also factors in the impact of recent Republican-led healthcare system cuts, including changes to Medicaid and the Affordable Care Act (ACA).

CEO Sarah London emphasized that the charge does not affect Centene's cash position or core operations. Excluding this one-time item, the company would have posted a modest profit for the quarter.

Operational Performance Shows Resilience

Despite the headline loss, Centene's operational metrics showed improvement:

• Revenue increased 18% year-over-year to $49.7 billion, driven by premium growth in ACA plans and Medicaid rate increases.
• The medical loss ratio (MLR) stood at 92.7%, higher than the previous year but lower than analyst expectations and improving sequentially.
• Medicaid MLR improved, attributed to better clinical management, network optimization, and a retroactive revenue increase in Florida.

London noted, "We are pleased to be making real progress on our Medicaid margin improvement agenda but we are certainly not declaring victory." The company now expects its composite Medicaid rate to be 5.5% for the year, up from the previous projection of 5%.

ACA Business Faces Uncertainty

Centene's ACA business, covering 5.8 million people, continues to see elevated utilization. The company is preparing for potential changes in the fourth quarter as enrollees may increase medical care usage ahead of the possible expiration of enhanced ACA plan subsidies at the end of 2025.

In response, Centene has implemented significant premium increases for its 2026 ACA plans, with average rate hikes in the "mid-30s" percentage range. These increases aim to address higher utilization and the anticipated expiration of enhanced premium tax credits.

The future of these subsidies remains uncertain, with ongoing debates in Congress tied to the current government shutdown. The outcome could significantly impact ACA enrollment and insurer profitability in the coming years.

Despite these challenges, London expressed optimism about the ACA business: "While the policy landscape remains uncertain, based on what we know today we believe we have positioned the portfolio well for meaningful margin improvement in 2026."