On July 25, Centene’s CEO Sarah London detailed three key dynamics affecting the ACA risk pool this year after the company posted a $253 million loss in the second quarter.
The morbidity of the ACA market in some states has increased by as much as 16% to 17% year over year, and Centene expects 2025 marketplace earnings to be pressured by $2.4 billion.
“This is obviously a disappointing outcome, but we are not taking it standing still,” Ms. London told investors. “We immediately turned our focus to mitigating the impact of this pricing miss with the goal of returning the business to profitability in 2026.”
Three things that are changing the ACA risk pool:
1. A larger-than-anticipated proportion of healthy and low-utilizing members exited the marketplace during open enrollment last year, likely due to federal program integrity measures implemented after 2024 pricing was finalized and applied for the 2025 open enrollment period.
2. New market sign-ups exhibited higher morbidity, likely due to shifts in the member mix following Medicaid redeterminations and the program integrity measures that discouraged healthy individuals from enrolling in 2025.
3. The overall rise in marketplace care utilization, along with more aggressive provider coding, is likely contributing to the higher documented morbidity seen this year.
