Financial Data and Key Metrics Changes - The company reported a fourth quarter adjusted diluted loss per share of $1.19, contributing to a full year 2025 adjusted diluted EPS of $2.08, which was slightly ahead of expectations outlined in the previous quarter [7][8] - The fourth quarter GAAP diluted loss per share was $2.24, including a $389 million net loss from the divestiture of the remaining Magellan business [40][41] - The company anticipates full year 2026 adjusted EPS to exceed $3, representing over 40% year-over-year growth [10] Business Line Data and Key Metrics Changes - Medicaid's health benefits ratio (HBR) improved to 93.0% in Q4, showing a 40 basis points sequential improvement and a 190 basis points improvement from Q2 levels [12][42] - The Marketplace segment's HBR was about a point higher than forecasted, with slight improvements in medical cost trends [44] - The Medicare segment delivered strong results, with expectations for membership growth in the PDP business and a focus on achieving break-even in Medicare Advantage by 2027 [28][29] Market Data and Key Metrics Changes - The company closed 2025 with approximately 12.5 million Medicaid members, with expectations for a 5%-6% decline in member months in 2026 [43][52] - Marketplace membership is projected to be around 3.5 million by the end of Q1 2026, down from 5.5 million in December [24][53] - Medicare segment revenue is expected to grow by approximately $7.5 billion, driven by premium yield increases and membership growth [54] Company Strategy and Development Direction - The company is focused on restoring Medicaid business to sustainable profitability while enhancing quality outcomes for members [11] - Key strategies include optimizing networks, implementing new clinical programs, and increasing vigilance against fraud [13][16] - The company is leveraging data and technology, including AI, to improve operational efficiency and member engagement [34][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in executing the 2026 outlook, citing positive momentum and opportunities for margin expansion [38] - The company acknowledged the challenges faced in 2025 but emphasized the strength gained from navigating those challenges [36] - Management highlighted the importance of proactive engagement with state partners to address rate adjustments and program reforms [100][102] Other Important Information - The company ended 2025 with approximately $400 million in cash available for corporate use and reduced debt by $189 million, resulting in a debt-to-cap ratio of 46.5% [50] - The adjusted SG&A expense ratio for Q4 was 7.5%, bringing the full year to 7.4%, reflecting continued discipline and scale [50] Q&A Session Summary Question: Medicaid rate expectation for 4.5% - Management explained that the 4.5% rate assumption is prudent, considering the favorable maturation of 2025 rates and ongoing efforts to bend trend [63][64] Question: Trend comparison for 2025 and 2026 - Management indicated that the 2025 trend was in the mid-6s, while the 2026 assumption is a net trend of mid-4s, reflecting aggressive actions taken in the latter half of 2025 [67][69] Question: Confidence in exchange member dynamics - Management expressed confidence in margin improvement for the Marketplace segment, citing improved visibility and historical data to support pricing strategies [75][84] Question: Incremental decline in Medicaid membership - Management acknowledged slight attrition in membership and discussed the impact of state eligibility tightening and program changes on future membership [86][89] Question: Actuarial soundness lookback process - Management emphasized the importance of shortening the lookback period and maximizing the inclusion of recent data in the actuarial process to inform rate adjustments [95][100] Question: Segment margins in 2026 guidance - Management provided insights into expected margins, indicating opportunities for improvement across all business lines, with specific targets for Medicaid, Marketplace, and Medicare segments [104][105]

Financial Data and Key Metrics Changes - The company reported a fourth quarter adjusted diluted loss per share of $1.19, contributing to a full year adjusted diluted EPS of $2.08 for 2025, which was slightly ahead of expectations [6][7][38] - The fourth quarter GAAP diluted loss per share was $2.24, including a $389 million net loss from divesting the remaining Magellan business [38] - The company anticipates full year 2026 adjusted EPS to exceed $3, representing over 40% year-over-year growth [8][58] Business Line Data and Key Metrics Changes - Medicaid's health benefits ratio (HBR) improved to 93.0% in Q4, showing a 40 basis points sequential improvement and 190 basis points improvement from Q2 levels [10][40] - The Marketplace segment's HPR was about a point higher than forecasted, with medical cost trends slightly better than expectations in Q4 [42] - The Medicare segment delivered strong results, with Q4 fundamentals in line with expectations, and the company aims for break-even in Medicare Advantage by 2027 [26][27][46] Market Data and Key Metrics Changes - The company closed 2025 with approximately 12.5 million Medicaid members, with expectations of a 5%-6% decline in member months for 2026 [41][51] - Marketplace membership is projected to be around 3.5 million by the end of Q1 2026, down from 5.5 million in December [22][52] - Medicare segment premium revenue is expected to grow by approximately $7.5 billion, driven by the PDP business and membership growth [53] Company Strategy and Development Direction - The company is focused on restoring Medicaid to sustainable profitability while improving quality outcomes for members [9] - Key levers for Medicaid improvement include optimizing networks, implementing clinical programs, and enhancing fraud detection [11][14] - The company is integrating data and AI into operations to enhance efficiency and member experience [32][34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2025 was challenging but expressed confidence in the ability to execute against the 2026 outlook, with expectations for margin expansion [36] - The company is proactively engaging with state partners to ensure appropriate rate adjustments and program reforms [99][102] - Management emphasized the importance of data-driven decisions and the need for timely adjustments to rates based on recent trends [100][102] Other Important Information - The company ended 2025 with about $400 million in cash available for corporate use and reduced debt by $189 million, resulting in a debt-to-cap ratio of 46.5% [48] - The adjusted SG&A expense ratio for Q4 was 7.5%, bringing the full year to 7.4%, reflecting continued discipline [48] Q&A Session Summary Question: Medicaid rate expectation for 4.5% - Management explained that the 4.5% rate assumption is prudent, considering the favorable maturation of 2025 rates and ongoing efforts to manage trends [63][65] Question: Trend comparison for Medicaid in 2025 - Management indicated that the 2025 trend was in the mid-6s, with the 2026 assumption reflecting a net trend of mid-4s based on recent performance [67][69] Question: Confidence in exchange member dynamics - Management expressed confidence in margin improvement for exchanges, citing improved visibility and historical data to support pricing strategies [76][78] Question: Membership attrition in Medicaid - Management discussed expectations for continued attrition in membership, considering state eligibility tightening and program changes [88][90] Question: Actuarial soundness lookback process - Management highlighted efforts to shorten the lookback period for actuarial adjustments and the importance of recent data in rate negotiations [96][98] Question: Segment margins in 2026 guidance - Management provided insights into expected margins, indicating opportunities for improvement across all business lines, with specific targets for Medicaid and Medicare segments [105][106]

Core Insights - The partnership between Peach State Health Plan (PSHP) and Barrow County Schools aims to support holistic student development by addressing health, education, and access needs in the community [1][5] - The Back-to-BOLD event on July 25, 2025, attracted thousands of attendees and served as a unifying moment for the community following a tragic school shooting [1][4] Group 1: Event Highlights - The collaboration included the Centene Foundation and Shoes That Fit, which donated 1,000 pairs of new shoes to students, ensuring they have the necessary resources to start school confidently [2][3] - The Centene Vision Van provided free eye exams and prescription glasses, contributing to the event's positive impact on families [4] Group 2: Community Impact - Dr. Dallas LeDuff, Superintendent of Barrow County Schools, expressed gratitude for the community's support, highlighting the importance of health screenings, immunizations, school supplies, and other resources for families [3] - Clyde A. White, President and CEO of PSHP, emphasized the significance of strong partnerships in fostering community well-being and long-term success for students [5] Group 3: Organizational Background - Peach State Health Plan serves the Medicaid and PeachCare for Kids® populations in Georgia and focuses on under-insured and uninsured individuals through its Ambetter plan [6] - Barrow County School System serves nearly 15,500 students and is the 24th largest school system in Georgia [7] - The Centene Foundation is dedicated to improving health equity and addressing social drivers of health in economically challenged communities [8] - Shoes That Fit is a nonprofit organization that provides new athletic shoes to children in need, having delivered shoes to over 180,000 children across the U.S. last year [9]

Financial Data and Key Metrics Changes - The company reported an adjusted per share loss of $0.16 for Q2 2025, which was below the financial goals set at the beginning of the year [7][33] - Premium and service revenue for Q2 2025 was $42.5 billion, reflecting challenges in the Marketplace and Medicaid segments [33][41] - The adjusted diluted EPS guidance for the full year 2025 has been revised down to approximately $1.75, significantly lower than the previous guidance of $7.25 [24][40] Business Line Data and Key Metrics Changes - Marketplace membership reached 5.9 million, generating over $10 billion in commercial premium and service revenue, but faced a $1.2 billion pretax drag due to risk adjustment transfer revenue shortfalls [8][10] - The Medicaid portfolio reported a health benefits ratio (HBR) of 94.9%, driven by increased medical costs in behavioral health, home health, and high-cost drugs [15][19] - Medicare Advantage is on track for breakeven in 2027, with PDP membership stable at 7.8 million and showing improved performance [21][23] Market Data and Key Metrics Changes - The company anticipates a $2.4 billion headwind to Marketplace earnings in 2025 due to a significant morbidity shift, with some states experiencing a 16% to 17% year-over-year change [10][11] - Medicaid rate adjustments are expected to be around 5% for 2025, an increase from the previous expectation of 4% [19][24] - The overall market is expected to contract further, with the company projecting a decrease in Marketplace membership to 5.4 million by year-end 2025 [69][70] Company Strategy and Development Direction - The company is focused on restoring profitability in the Marketplace by repricing 100% of the book for 2026, addressing the morbidity shifts observed in 2025 [12][29] - In Medicaid, the strategy includes advocating for rate adjustments and managing costs through clinical interventions and fraud prevention [18][19] - The company aims to leverage its size and scale to create transparency in market dynamics and improve pricing strategies [76][78] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment with Q2 performance but emphasized a unified focus on restoring earnings trajectory and improving performance across the portfolio [7][24] - The company is actively engaging with state partners to address Medicaid cost trends and secure necessary rate adjustments [19][60] - Future earnings potential is seen in the ability to manage costs effectively and secure favorable rates, with confidence in the long-term viability of its business segments [41][42] Other Important Information - The company has filed 2026 pricing in 17 states and expects to submit additional filings soon, aiming for state certification of rates [12][36] - Cash flow from operations was $1.8 billion for Q2, with unregulated cash on hand at $234 million [39] - The company does not anticipate further share buybacks in 2025 but remains open to opportunistic actions based on market conditions [39][40] Q&A Session Summary Question: Capital position and potential needs for additional capital - The company plans to inject a net $300 million into subsidiaries in the second half of the year, with a renewed $4 billion credit facility available [44][46] Question: Risk adjustment true-up and market impacts - Management acknowledged that program integrity measures led to a significant morbidity shift, affecting expectations for 2026 pricing [48][51] Question: Medicaid guidance and HBR expectations - The company expects a 140 basis point improvement in HBR for the second half of the year, focusing on specific states that contributed to Q2 underperformance [56][59] Question: Weekly data membership trends and market size - The overall market is expected to contract, with the company projecting further membership attrition due to program integrity measures [67][70] Question: Strategy for risk adjustment payables - The company is considering adjustments to product and benefit structures to optimize for lower payables while maintaining profitability [74][76]

Financial Data and Key Metrics Changes - The company reported an adjusted per share loss of $0.16 for Q2 2025, which was below the financial goals set at the beginning of the year [6][31] - Total premium and service revenue for Q2 2025 was $42.5 billion, reflecting challenges in the marketplace and Medicaid segments [31][39] - The adjusted diluted EPS forecast for the full year 2025 is now approximately $1.75, significantly down from the previous guidance of $7.25 [22][38] Business Line Data and Key Metrics Changes - Marketplace membership reached 5.9 million, generating over $10 billion in commercial premium and service revenue, but faced a $1.2 billion pretax drag due to risk adjustment transfer revenue shortfalls [7][8] - The Medicaid health benefits ratio (HBR) was reported at 94.9%, driven by increased medical costs in behavioral health, home health, and high-cost drugs [14][18] - Medicare Advantage is on track for breakeven in 2027, with PDP membership stable at 7.8 million and showing improved performance [20][21] Market Data and Key Metrics Changes - The company anticipates a $2.4 billion headwind to 2025 pretax earnings due to a shift in marketplace risk pool, with morbidity increasing by 16% to 17% in some states [10][22] - Medicaid rate adjustments are expected to be around 5% for 2025, an increase from the previous expectation of 4% [18][22] - The overall market is expected to contract further, with membership projected to decrease to 5.4 million by the end of 2025 [67] Company Strategy and Development Direction - The company is focused on restoring profitability in the Marketplace business by repricing for 2026 to account for morbidity shifts and enhancing operational efficiency [12][26] - In Medicaid, the strategy includes advocating for rate adjustments and managing costs through improved provider networks and fraud prevention [15][17] - The company aims to leverage its size and scale to create transparency in the market and ensure stability in pricing and risk adjustment processes [75] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment with Q2 performance but emphasized a unified focus on restoring earnings trajectory and improving performance across the portfolio [6][31] - The company is actively engaging with state partners to address Medicaid cost trends and is optimistic about securing sufficient rates to support sustainable margins [19][60] - Future earnings potential is seen in the long-term stability of Medicaid, Medicare, and the individual marketplace, despite current challenges [39][30] Other Important Information - The company has filed 2026 pricing in 17 states and expects to submit additional filings soon, aiming for a comprehensive repricing strategy [12][33] - Cash flow from operations for Q2 was $1.8 billion, with unregulated cash on hand at $234 million [37] - The company does not anticipate further share buybacks in 2025 but remains open to opportunistic actions based on market conditions [37] Q&A Session Summary Question: Capital position and potential needs for additional capital - The company plans to inject a net $300 million into subsidiaries in the second half of the year, with a renewed $4 billion credit facility available [42][44] Question: Risk adjustment impacts and repricing strategy - Management acknowledged the significant morbidity shift affecting the marketplace and is adjusting expectations for 2026 pricing accordingly, aiming for profitability [48][51] Question: Medicaid margin improvement expectations - Management expects to deliver margin improvement in Medicaid, focusing on specific states that contributed to Q2 underperformance [56][59] Question: Market size and membership trends - The company anticipates further market contraction and membership attrition, projecting a decrease to 5.4 million members by year-end [67][68] Question: Strategy for risk adjustment payables - The company is considering product and benefit structure adjustments to optimize for sustainable margins while addressing risk adjustment dynamics [71][75]