Centene cuts 2024 revenue forecast on govt-backed insurance coverage uncertainty

April 25 (Reuters) – Centene Corp (CNC.N) on Tuesday reduce its adjusted revenue forecast for 2024 because the U.S. well being insurer expects a success to Medicaid memberships and stress on Medicare Benefit (MA) enterprise because of coverage adjustments.

The MA enterprise is prone to contract following tweaks that may cut government payouts from subsequent yr, the corporate has stated, whereas Medicaid memberships are anticipated to take a knock from the removing of pandemic-related aid measures.

On an adjusted foundation, Centene now expects 2024 revenue of greater than $6.60 per share, in contrast with its earlier forecast of a minimum of $7.15.

The corporate had warned in February it anticipated detrimental revenue margins in its MA enterprise in 2024 briefly, after U.S. Facilities for Medicare and Medicaid Providers (CMS) additionally reduce star score for the plans in October.

Shares of bigger rivals UnitedHealth (UNH.N) and Elevance (ELV.N) got here below stress earlier this month regardless of each beating first-quarter earnings estimates on investor worries associated to increased future medical prices.

Centene’s quarterly well being advantages ratio, which measures medical prices in relation to premiums collected, was 87% for the primary quarter, in contrast with Refinitiv IBES estimates of 87.26%.

Excluding objects, Centene earned $2.11 per share, in contrast with estimates of $2.09.

The corporate raised its revenue outlook for this yr to a minimum of $6.40 per share from earlier forecast of between $6.25 and $6.40, anticipating progress from its enterprise that gives personal medical insurance plans to people and households.

Reporting by Raghav Mahobe and Nandhini Srinivasan in Bengaluru Modifying by Vinay Dwivedi

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