Centene (CNC) Barclays 28th Annual Global Healthcare Conference summary

Business performance and outlook

• Reaffirmed guidance of over $3 adjusted EPS for 2026, with all core business lines (Medicaid, Medicare, Marketplace) tracking to plan early in the year.

• Medicaid execution and trend initiatives are progressing well; Medicare Advantage is on track for breakeven by 2027.

• Marketplace membership is declining as expected, with a projected 3.5 million members by end of Q1, reflecting a focus on margin over membership.

• Metal tier mix is shifting, with increased Bronze and decreased Silver membership; higher specialty pharmacy utilization is concentrated in Silver.

• Early Wakely report and upcoming CMS rates are key milestones for risk and rate visibility in the coming months.

Risk adjustment and industry trends

• New Wakely data will provide early directional indicators on market contraction, metal tier distribution, and risk scores, enhancing visibility compared to prior years.

• Conservative approach to risk adjustment changes until full claims data is available; higher specialty utilization in Silver tier is being closely monitored.

• Industry attrition in ACA is at the higher end of expectations, driven by pricing actions and FPL mix.

• Bronze tier now includes a blend of traditional and former Silver members seeking affordability.

Medicaid trends and fraud prevention

• Medicaid cost trend exited 2025 in the mid-6% range, with a 4.5% net trend assumed for 2026; 1/1 rates aligned with expectations.

• Ongoing initiatives target fraud, waste, and abuse, leveraging AI and 75 daily algorithms to detect suspect claims.

• Constructive engagement with states is increasing, with calls for more robust national data sharing to combat provider fraud.

• Financial impact from fraud prevention efforts can have a delayed effect, with benefits ramping over several quarters.