Core Viewpoint - Centene expects a rebound in 2026 with adjusted EPS greater than $3, implying over 40% year-over-year growth, driven by Medicaid margin stability, significant margin recovery in Marketplace, and continued improvement toward Medicare Advantage break-even by 2027 [1][4][7] Medicaid - Centene reported a fourth-quarter health benefits ratio (HBR) of 93.0%, showing a 40 basis points sequential improvement and 190 basis points improvement from Q2 levels [8] - The company anticipates a mid-4% net rate impact and mid-4% net trend for 2026, while expecting ongoing Medicaid membership attrition, closing 2025 at 12.5 million members [11][12] - Management is focused on restoring sustainable profitability in Medicaid through operational levers such as network optimization and clinical programs [9] Marketplace - The Marketplace segment is expected to face a smaller membership base due to the expiration of Enhanced Advance Premium Tax Credits (EAPTC), with Ambetter membership projected at approximately 3.5 million by Q1 2026, down from 5.5 million in December [5][15] - Centene anticipates Marketplace pre-tax margins to recover to around 4% in 2026, compared to a loss of approximately 1% in 2025 [17] - The company has accounted for estimated 2026 No Surprises Act costs in its guidance and is advocating for reform [14] Medicare - Centene's Medicare segment is expected to grow premium revenue by about $7.5 billion, with membership projected at approximately 8.7 million coming out of open enrollment [20] - The company aims for break-even results in Medicare Advantage by 2027, with dual-eligible members making up roughly 40% of its Medicare Advantage business [19] - The direct subsidy for Part D increased from $143 to $200, which is expected to raise the HBR without requiring higher SG&A [21] Financial Guidance - For 2026, Centene guided premium and service revenue between $170 billion and $174 billion, with a consolidated HBR of 90.9% to 91.7% [23][24] - The company expects the majority of 2026 adjusted EPS to occur in Q1, with a step-down through the year and a loss anticipated in Q4 [26] - Centene ended 2025 with approximately $400 million in cash for corporate use and reduced debt by $189 million in Q4, reporting a debt-to-cap ratio of 46.5% [25]