Centene (parent company of Wellcare) July 1st issued a press release withdrawing 2025 earnings guidance citing "overall market growth (in marketplace plans) ... lower than expected ... and materially inconsistent with the company's assumption for risk adjustment revenue transfer used in the preparation of its previous 2025 guidance."
"The Company's preliminary analysis of the 22 states results in a reduction to its previous full year net risk adjustment revenue transfer expectation by a preliminary estimate of approximately $1.8 billion
which corresponds to an adjusted diluted EPS impact of approximately $2.75."
Centene stock finished Wednesday down 40% erasing over 10 years of stock price gains.
Some Bern Insurance clients chose Wellcare prescription drug plans during last years open enrollment. Most if not all of these clients signed up directly via healthcare.gov or medicare.gov (we are not your agent of record). Wellcare announced in September 2024 that they would not pay agent / broker commissions on the prescription drug plans (PDP), the only type of plans Wellcare offers in Montana.
We at Bern Insurance are amused that last year Wellcare thought it wise to (1) eliminate payment of agent commissions and (2) offer zero premium PDP drug plans and are now caught flat footed surprised by "lower than expected growth" and a $1.8 billion miss to projected earnings. We will be watching this years open enrollment how Wellcare prices it's PDP drug plans or if they re-institute agent commissions to stem the losses in market growth.
We do want to reassure any Montanan holding a Wellcare / Centene prescription drug plan that their drug plans are safe and sound. IF you own any of their stock you may want to call your broker. But even after loosing 40% of its stock value (NYSE:CNC ) is still a Fortune 500 company with a $16+ billion market cap.
Centene press release:
https://investors.centene.com/2025-07-01-CENTENE-CORPORATION-WITHDRAWS-2025-GUIDANCE
Read more at Zero Hedge:
https://www.zerohedge.com/markets/centene-crashes-after-pulling-2025-guidance-unexpected-risk-adjustment-results
