Centene shares plummet after Trump victory

Nov. 09--The future of health care policies that have benefited Centene Corp. is now uncertain with the election of Donald Trump -- and investors reacted strongly on Wednesday.

Shares of the Clayton-based company fell 19 percent to close at $54.05 on Wednesday. Other health insurers and hospital companies also closed lower.

Trump has said repealing the President Barack Obama's Affordable Care Act will be one of his top priorities.

The ACA, signed in 2010, paved the way for millions of Americans to gain access to health insurance regardless of preexisting health conditions.

Centene and its peer Molina Healthcare Inc. have had the most success under the law, according to analyst Michael Baker with Raymond James.

Many states hire managed care providers like Centene to insure its Medicaid members. Medicaid is government-sponsored health insurance for low-income individuals. Under the ACA, the federal government provided funding to allow states to expand their Medicaid programs. (A number of states, including Missouri, declined to participate, leaving thousands of people without coverage.)

In addition to its core Medicaid business, Centene also sells health insurance plans to individuals on the health insurance exchange, or through HealthCare.gov. Unlike many of the nation's largest insurers, which have since scaled back their participation in the exchanges, Centene continued to expand its reach.

Centene CEO Michael Neidorff said Wednesday the market was having a "gross overreaction" to the election, and he expected the company's stock to rebound.

"We are the one company left standing with a very successful exchange product," Neidorff said. "We've let investors know that and I'm sure that plays in their mind."

Meet the top midsized workplaces in St. Louis

#block-513205 .additional-content {

text-shadow:none;

}

#block-513205 .additional-content a {

text-shadow:none;

}

#block-513205 .additional-content.horizontal-list {

font-weight:bold;

}

#block-513205 .additional-content.h4 {

line-height:22px;

}

#block-513205 .additional-content.h5 {

line-height:18px;

}

#block-513205 .additional-content.h6 {

line-height:16px;

}

#block-513205 .additional-content ul {

padding-left:20px;

}

#block-513205 .additional-content li {

padding:0px 0px 5px 0px;

}

Company headquarters that have moved from St. Louis

Company headquarters that have moved from St. Louis

What's going up: Read the Building Blocks blog

What's going up: Read the Building Blocks blog

See how St. Louis stocks are faring

See how St. Louis stocks are faring

He also said Centene's expanded Medicaid business -- the company won a handful of contracts this year and completed a major acquisition -- was likely a factor in the drop in stock price.

Trump has said he may use block grants to fund state Medicaid programs.

Neidorff told the Post-Dispatch Wednesday that he's open to that idea, although with some "guard rails" like establishing thresholds for a specific level of benefits and certain incentives.

John Holahan, a fellow at the Urban Institute, said Centene needs to be "pretty careful about what they wish for."

Political Fix podcast: Assessing Trump's victory

Business Briefing from St. Louis Post-Dispatch

Make it your business. Get twice-daily updates on what the St. Louis business community is talking about.

1 html subscribe St. Louis Post Dispatch ArticleFooter CST http://www.stltoday.com/business/success-e-newsletter-sign-up/article_f9de5eb7-975c-5c5c-818a-891981ed5f81.html [email protected]

This field is required. Sign Up!

D98A625593049BD283CD18B261283E7B

leave this blank

Samantha Liss --314-340-8017

@samanthann on Twitter

[email protected]

___

(c)2016 the St. Louis Post-Dispatch

Visit the St. Louis Post-Dispatch at www.stltoday.com

Distributed by Tribune Content Agency, LLC.