Centene Corporation (CNC) Stock Analysis

Centene's government-focused health plans generated $194.8 billion in total revenues in 2025 across 27.6 million members, with Medicaid at 57% of external revenues, Commercial at 21%, and Medicare at 19%. The company served 12.5 million Medicaid members across 30 states, 5.5 million Marketplace members in 29 states under the Ambetter Health brand, and 8.1 million Part D PDP members as of December 31, 2025, making it the nation's largest Medicaid, Marketplace, and stand-alone PDP insurer.

Centene earns revenue primarily through capitation rates set by government payors — CMS for Medicare Advantage and PDP plans, and state actuarial agencies for Medicaid. Medicare Advantage premiums vary by county, demographics, and risk scores under retroactive risk-adjustment models; roughly 60% of the company's Medicare Advantage membership was associated with contracts rated 3.5 stars or better as of December 2025. The Medicaid segment spans Medicaid Expansion, TANF, ABD, CHIP, LTSS, and foster care populations; state actuarial rate-setting typically lags actual medical cost trends, creating timing risk on earnings. The Inflation Reduction Act's Part D changes — including a $2,100 annual out-of-pocket cap for 2026 and a shift in insurer catastrophic-phase cost-sharing — substantially increased PDP financial risk, prompting Centene to elect into CMS's Part D Premium Stabilization Demonstration program. Commercial Marketplace coverage is distributed under the Ambetter Health brand across 29 states, and the Other segment includes specialty pharmacy, behavioral health, and vision and dental services.