Centene posts big loss in second quarter amid federal health care cuts

ST. LOUIS — Health insurance Centene Corp. announced losses during its most recent quarter, citing rising Medicaid costs and a change in membership.

In its second quarter, the Clayton-based company lost $253 million dollars, or 51 cents a share. In the same period last year, Centene saw earnings of $2.26 a share.

It's a sharp contrast to the $13.3 billion profit Centene reported for the first three months this year, thanks to gains in Affordable Care Act enrollment and Medicare member retention.

This news comes weeks after the Clayton-based company pulled its 2025 earnings forecast, causing Centene’s stock to drop 40%, and amid federal cuts under President Donald Trump’s “One Big Beautiful Bill Act.”

“We are disappointed by this performance and frustrated to have fallen short of the financial goals we set at the start of the year,” Centene CEO Sarah London told investors in a call Friday morning.

States pay Centene and other managed care organizations to provide health care coverage to Medicaid recipients.

Centene’s Medicaid arm of the company saw its health benefits ratio — the percentage of revenue from premiums the company spends on providing coverage to its customers — of over 94% in the second quarter, due to costs in behavioral heath, home heath and high-cost drugs. London called the ratio increase unanticipated and unacceptable.

Centene also sells insurance plans in 29 states on the Affordable Care Act health insurance marketplace, which provides government-subsidized health insurance to lower-income patients who earn too much to qualify for Medicaid.

To mitigate losses here, Centene aims to reprice 100% of its marketplace books, London said. Company leaders said they have submitted 2026 proposed ACA health plan rates in 17 states, with plans to submit up to 12 more within the next week.

London said Centene officials view the federal spending bill as having established “a new and stable policy floor for our programs and we are actively developing a multi-year implementation strategy.”

Leaders said Friday they aim to see profitability in late 2026.

Centene has 3,300 St. Louis-area employees. While the company did not immediately respond to questions from the Post-Dispatch on the possibility of layoffs, London told investors that Centene will continue to pursue "strategic selling, general and administrative expense opportunities as we look to right size the business for 2026.”

By Friday morning, stock for Centene was up to $28.39 a share after closing Thursday at $26.76 a share. The company hasn’t recovered from when it tumbled from $56.61 a share in early July.

The company, originally founded as a nonprofit in 1984, grew from a single Medicaid plan into a giant in the managed care industry. It changed its name from Managed Health Services to Centene the same year it moved to the St. Louis area.

Centene faces dimmer future amid federal cuts to Medicaid, Obamacare

The Clayton-based health giant is likely to face increased challenges as federal government tightens Medicaid eligibility and trims subsidies for Obamacare plans.

Centene stock tumbles after Clayton company scraps 2025 forecast

After its stock price closed at $56.65 on Tuesday, Centene announced that afternoon it was scrapping its 2025 guidance, triggering an after-hours sell off.

Take a look back at June 2025

Post-Dispatch photographers capture tens of thousands of images every year. See some of their best work that was either taken in June 2025 in this video. Edited by Jenna Jones.

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