Health insurance company Centene (CNC.N) reported a surprise quarterly loss on Friday due to rising medical costs associated with its insurance plans. This caused the company’s shares to fall by 13% in the pre-market.
The health insurance sector is facing rising medical costs and changing enrollment patterns.
Moreover, significant spending cuts and regulatory changes are expected during the Trump administration.Centene CEO Sarah London said, “We were disappointed with our second-quarter results, but we clearly understand the trends affecting our performance and are working quickly to improve our earnings.”
Competitors Elevance (ELV.N) and Molina Healthcare (MOH.N) also pointed to rising costs in government-backed insurance plans.
Centene reported a medical cost ratio of 93% in the second quarter, which was below analysts’ expectations.
Well above 89.34%. The increase was driven by higher medical costs at Medicaid and a risk adjustment revenue decrease in 2025.Earlier this month, Centene pulled back its profit forecast for 2025 due to expected revenue decline from commercial plans under the Affordable Care Act (Obamacare).
For the second quarter, the company reported an adjusted loss per share of 16 cents.
However, analysts were expecting a profit of 86 cents per share.
