Centene shares plummeted Wednesday after the managed-care company withdrew its full-year outlook after receiving new data about enrollments and rising member health costs. Monitor these major support and resistance levels. https://t.co/goEsoharb3 ...

Company Performance - Centene's stock plunged over 40%, marking its worst single-day performance on record [1][2] - Centene withdrew its full-year forecast after the market closed [2] - Management expects a $2.75 hit to earnings per share this year [5] - The company anticipates a 35% to 40% reduction in its numbers [5] Market Dynamics & Risk Factors - Overall market growth in 22 states is lower than expected, indicating fewer people signed up for state healthcare exchange plans [3] - Individuals who enrolled in Obamacare exchange plans are less healthy than anticipated, increasing costs for Centene [3][4] - Centene expects a $1.8 billion reduction in expected risk adjustment revenue transfers from the federal government [4]

Centene's Financial Performance and Forecast - Centene's stock plunged over 40%, marking its worst single-day performance, after withdrawing its full-year forecast [1] - The company expects a $18 billion (18,000 million) reduction in expected risk adjustment revenue transfers from the federal government [4] - Management anticipates a 275% hit to earnings per share (EPS) this year, a significant downturn from the initial expectation of earning more than $725% per share for 2025 [5] - The assessment is based on data from a firm that only covered 22 of the 29 states where they offer exchange plans, and they're assuming that those states will be just as bad [6] Healthcare Exchange and Medicaid Challenges - Overall market growth in the 22 states is lower than expected, indicating fewer people signed up for plans from the state healthcare exchanges [3] - Individuals who enrolled in Obamacare exchange plans are less healthy than anticipated, leading to higher costs for Centene [4] - Centene's Medicaid business has experienced a step up in medical cost trend, particularly in behavioral health, home health, and high-cost drugs, especially in New York and Florida [7][8] - The second quarter Medicaid health benefits ratio should be higher than it was in the first quarter [8] Industry-Wide Concerns and Potential Impacts - The government is cracking down on inappropriate or fraudulent enrollments in healthcare plans sold on exchanges [10] - The population remaining in Obamacare exchanges is less healthy, requiring more healthcare and making them less lucrative customers [12] - Analysts suggest that Centene will likely have to raise its premiums, potentially leading to fewer people enrolling, creating an "insurance spiral" [14] - Negative trends in Obamacare exchanges and higher costs for Medicaid plans are hurting the managed care industry [17]

Shares of Centene cratered Wednesday, a day after the giant managed-care provider withdrew its full-year outlook after receiving new data about enrollments and the health of those covered https://t.co/MzteBda73A ...

Core Insights - Centene Corporation (CNC) has unexpectedly withdrawn its earnings guidance for 2025 due to an unforeseen shift in the health insurance marketplace dynamics, which may significantly impact earnings beyond initial forecasts [1][11] Group 1: Earnings Guidance and Market Impact - The decision to withdraw guidance follows an analysis of industry risk adjustment data from Wakely, covering 22 out of 29 Marketplace states, representing approximately 72% of Centene's Marketplace membership [2] - Centene anticipates a shortfall of about $1.8 billion in net risk adjustment revenues, translating to a $2.75 impact on adjusted diluted EPS for 2025 [3][11] - Following the announcement, CNC shares fell sharply in after-hours trading, reflecting investor concerns over reduced profit margins and broader implications for managed care organizations [3] Group 2: Performance and Challenges - Despite challenges, Centene reported that the final 2024 risk-adjusted results from the Centers for Medicare and Medicaid Services met expectations, with its Medicare Advantage and Medicare PDP segments performing better than anticipated in Q2 2025 [4] - The Medicaid segment is facing difficulties due to rising costs in behavioral health, home care, and expensive medications, particularly in states like New York and Florida [4] Group 3: Future Strategies - Looking ahead to 2026, Centene is proactively adjusting its rates to account for a higher morbidity baseline, indicating a defensive pricing strategy to mitigate potential losses [5][11] - The early refiling of 2026 rates suggests a shift towards a more cautious approach in pricing for the states where Centene conducts most of its marketplace business [5] Group 4: Stock Performance - Year-to-date, CNC shares have declined by 43.3%, compared to a 24.4% decline in the industry [9]

Core Insights - The Oncology Institute, Inc. (TOI) has become the exclusive oncology provider for over 80,000 Medicaid patients associated with SilverSummit Healthplan in Nevada, effective July 1 [1][2] - This partnership aims to enhance access to high-quality cancer care for Medicaid patients in the Las Vegas area [2] Company Overview - TOI, founded in 2007, specializes in value-based cancer care and serves over 1.8 million patients, offering services such as clinical trials and transfusions [4] - The organization employs over 120 clinicians and has more than 700 staff across 70 clinic locations [4] Patient Access - SilverSummit Healthplan members can access TOI's cancer care at three locations in Nevada: Las Vegas, Henderson, and Spring Valley [3] - The Las Vegas location operates Monday to Friday from 8:30 am to 5:00 pm, while the Spring Valley location has specific hours on certain days [3] Strategic Partnership - The partnership between TOI and SilverSummit Healthplan is focused on improving access and quality of cancer care for Medicaid patients [2] - SilverSummit Healthplan emphasizes its commitment to providing high-quality care, particularly for members facing cancer diagnoses [2][5]

Core Points - Health Net is responding to the State of Emergency declared by Gov. Newsom in San Joaquin County due to the Victoria Island Incident, prioritizing support for affected members and healthcare providers [1] Member Support Initiatives - Members can secure emergency medication supplies through two options during the State of Emergency [2] - Health Net offers 24/7 crisis support via Behavioral Health Services and telehealth services at no cost for members unable to reach their primary care provider [2][3] - Members can access local community resources by calling 2-1-1 or visiting 211.org [3] Healthcare Provider Support - Healthcare providers can contact Health Net for assistance during the emergency, with specific support measures in place for those in affected areas [3][4] - Health Net will suspend refill limitations for prescriptions at out-of-network pharmacies if the original pharmacy is closed [4] Additional Resources and Services - Health Net is providing ongoing support including mental health referrals, social services, financial assistance, and legal guidance [4] - The company will extend grace periods for notifications related to various healthcare services and waive prior authorization requirements while maintaining notification requirements [4] Company Overview - Health Net, a subsidiary of Centene Corporation, has been operating in California for over 45 years, serving more than three million members with a network of over 117,000 providers [6] - The company offers a range of health plans and services, including behavioral health and substance abuse programs, and employs over 5,700 people in California [6]

Core Insights - Health Net awarded a $2.6 million grant to support individuals exiting the criminal justice system in Sacramento County, providing access to essential services for successful community reintegration [1][2][4] - The initiative aims to reduce recidivism rates, which show that 66% of individuals are re-arrested within three years and 82% within ten years of release [2] - The project includes the operation of a 59-room motel as an interim shelter, offering comprehensive support services beyond just housing [3][4] Company Overview - Health Net, a subsidiary of Centene Corporation, has been operating in California for over 45 years, providing health plans for various demographics, including those eligible for Medi-Cal and Medicare [6] - The company serves more than three million members and has a network of over 117,000 providers across the state [6] - Health Net has committed over $158 million in funding to community-based organizations from 2017 to 2024, demonstrating its ongoing investment in local initiatives [4]

Core Insights - Health Net and the Centene Foundation announced a partnership investment exceeding $7.2 million to enhance healthcare services for underserved Californians through mobile health clinics [1][2] - The initiative aims to address barriers to care such as transportation issues and lost wages by providing essential preventive screenings and services directly to communities [2][3] Investment and Program Details - The funding is part of Health Net's new Mobile Outreach for Value, Equity and Sustainability (MOVES) program, which focuses on improving access to quality care in underserved areas [2][3] - Health Net has committed over $158 million in funding to community-based organizations from 2017 to 2024, reflecting a long-term investment in health equity and access [5][6] Community Impact - Mobile health clinics are designed to meet the healthcare needs of individuals in resource-limited areas, ensuring that those who require care are not overlooked [3][5] - The initiative aims to build sustainable care delivery models that foster trust between healthcare providers and communities, leading to better health outcomes [3][4] Grant Recipients and Collaborations - Grant recipients include organizations like AltaMed, Community Medical Centers, and Kaweah Health, which will use the funding to enhance their healthcare services [6][10] - The grants are intended to position these organizations as conveners, collaborating with local partners to address a wide range of physical, behavioral, and social needs [4]

Investment Rating - The report assigns an "Overweight" rating to Cigna Corp (CI) and UnitedHealth Group Inc (UNH), while Elevance Health Inc (ELV) and Humana Inc (HUM) are rated "Equal-weight" [56]. Core Insights - Cigna's Evernorth business has introduced an enhanced benefit offering for GLP-1 medications, negotiating a net price approximately 20% lower than previous prices for Wegovy and Zepbound, which could significantly expand coverage [1]. - The new program is estimated to save patients up to $3,600 annually compared to direct purchases from manufacturers, highlighting the role of PBMs in reducing drug costs through negotiation [1]. - Cigna's strategy contrasts with CVS' recent partnership with Novo Nordisk, indicating a less exclusionary approach in its offerings [1]. Summary by Sections Managed Care Developments - Cigna's new GLP-1 benefit offering includes a flexible copay structure, capping monthly copays at $200, aimed at employers without current coverage [1]. - The report notes that Cigna's approach is designed to address key pain points for customers and enhance cost-sharing options [1]. Policy Dynamics - Recent PBM policy dynamics are viewed as relatively benign, focusing on transparency and limiting spread pricing in Medicaid, which is manageable for PBMs [6]. - The evolving PBM models are better equipped to adapt to reform measures, indicating a positive outlook for the industry [6].