Centene, a major seller of Affordable Care Act plans, has seen its stock value plummet after it withdrew its 2025 guidance due to unexpected increases in benefits usage by ACA enrollees. The company’s stock fell by 40% on Wednesday, its worst single day since going public in 2001.
The news from Centene also affected other insurers, including Oscar Health and Molina Healthcare. While the industry has faced challenges in offering profitable plans, Centene’s struggles are a concern for lawmakers who may try to cut government spending on social programs, including Medicaid and Medicare.
A bill that would result in the largest cut to Medicaid in history is currently being debated by Republicans in Congress. This could lead to a significant reduction in revenue for insurers like Centene and Molina Healthcare, which rely heavily on the program. UnitedHealthcare, the largest health insurer in the US, has also seen higher-than-expected Medicare Advantage costs and will face increased scrutiny from regulators.
The industry’s struggles highlight the challenges of providing healthcare services under government-sponsored insurance programs. As lawmakers weigh their options, it remains to be seen whether insurers can continue to operate profitably while meeting the growing demand for healthcare services.
Source: https://sherwood.news/markets/selling-government-sponsored-insurance-is-looking-less-lucrative-its-about