Centene reports $1.1B loss in Q4 as elevated medical costs continue to strain finances

 Centene Corporation posted a $1.1 billion loss in the fourth quarter of 2025 as it works to find ways to adapt to the elevated cost environment.

The company said in its earnings report released Friday morning that its medical loss ratio for the quarter was 94.3%, compared to 89.6% in the fourth quarter of 2024. The spike reflects higher morbidity in the Affordable Care Act (ACA) exchange market as well as changes to Medicare Part D that were rolled out as part of the Inflation Reduction Act.

For the full year, MLR was 91.9%, up from 88.3% in 2024. Centene said this was driven by reduced payouts from ACA risk adjustment as well as growing medical costs in both the marketplace and Medicaid spaces, with the latter seeing costs rise in particular for behavioral health and pharmaceuticals.

While it did post a loss in the fourth quarter, the profit results still surpassed Wall Street analysts' predictions, per Zacks Investment Research. By comparison, Centene reported $283 million in profit for the fourth quarter of 2024.

Centene posted $6.7 billion in losses across 2025 as market pressures squeeze the company, according to the report. It brought in $3.3 billion in profit for 2024.

"We are pleased to end a challenging year carrying positive momentum from the extensive and decisive actions taken in the back half of 2025 with the goal of restoring Marketplace profitability and stabilizing the trajectory of our Medicaid business," CEO Sarah London said in the press release. "As we look to 2026, we are positioned to deliver meaningful margin improvement and renewed adjusted diluted EPS growth."

In the earnings report, Centene noted that one of the steps it's taken to right the ship is to sell off the remaining Magellan Health business, and that in December it signed an agreement to divest that unit. The company had previously sold Magellan's pharmacy unit, Magellan Rx, and its Magellan Specialty Health division.

Centene said the sale generated noncash impairment charges of $513 million.

While the company posted significant losses in 2025, revenues have grown year over year. In the fourth quarter, Centene reported $49.7 billion in revenue, up from $40.8 billion in the prior-year quarter and also surpassing Wall Street's predictions. Revenue for all of 2025 was $194.8 billion, increasing from 2024's haul of $163.1 billion.

Centene boasted 27.6 million members as of Dec. 31, including 12.5 million in Medicaid and just shy of 6 million in its marketplace plans, per the report.

For 2026, Centene said it expects to bring in at least $3 in earnings per share as well as revenue between $186.5 billion and $190.5 billion.

https://www.fiercehealthcare.com/payers/centene-reports-11b-loss-q4-elevated-medical-costs-continue-strain-finances