Centene Corporation Q4 FY2025 earnings call

• Medicaid: Laser-focused on restoring sustainable profitability. Organized around key levers like optimizing networks, clinical programs, rate advocacy, etc. Applied behavioral analytics task force analyzed data across 29-state footprint. • Marketplace: Fundamental medical cost trend in Q4 slightly better. Vocal in advocating for No Surprises Act reform and taking proactive litigious posture. Marketplace team executed well in open enrollment. • Medicare: 2025 results strong. Focus on breakeven in Medicare Advantage by 2027. Launched redesigned duals operating model. Tracking Part D enrollment growth. • Data, technology, AI: Critical levers for harvesting full potential earnings power. Building data foundation and integrating AI into operations.

Medicaid: Fourth quarter health benefits ratio of 93, consistent with expectations, 40 basis points sequential improvement and 190 basis points from Q2. 2025 composite rate adjustment ~5.5% above 2024. Slight membership attrition ending 2025 at 12.5 million. Marketplace: Fundamental medical cost trend in Q4 slightly better than expectations. Experienced out-of-period items pushing segment HBR up 100 basis points. 2026 membership expected to be ~3.5 million by first quarter end. Medicare: 2025 results strong. Fourth quarter Medicare Advantage performance in line with expectations. Part D enrollment tracking to high single-digit percentage growth. Expect rates finalized in early April 2026.

• Expect full year 2026 adjusted EPS to be greater than $3, more than 40% year-over-year growth. • Premium and service revenue expected $170 to $174 billion. • Medicaid member months down 5 to 6% in 2026. • Marketplace revenue down ~$8 billion. • Medicare segment premium revenue to grow ~$7.5 billion. • Consolidated HBR expected 90.9% to 91.7% in 2026, midpoint down 60 basis points from 2025. • 2026 EPS outlook reflects Medicaid margin stability, marketplace margin recovery, and Medicare Advantage progress.

• Policy-related variability influencing core business lines. • No Surprises Act being weaponized by market participants. • Uncertainty around risk adjustment assumptions. • Potential impact of congressional inaction on marketplace programs. • Competition and margin pressures in Medicaid affecting state program funding and member services.

Q: On Medicaid rate of 4.5%, any details on state level and midyear rate increases?

A: Conversation with state partners constructive. 2025 rates matured favorably. 2026 assumption of 4.5% takes into account two years of acuity and trend data.

Q: Follow-up on Medicaid trend in 2025 and 2026, and rates justification?

A: 2025 trend mid six, 2026 mid fours net trend assumption. Rates ended 2025 at ~5.5%, 2026 at 4.5% with thoughtful program decisions as proxy for addressing trend.

Q: Confidence and visibility on exchanges, metal tier shift?

A: Confidence from work done in Q3, good visibility into open enrollment, distribution of metal tiers different, but have data and experience.

Q: Medicaid membership decline and acuity impact?

A: Member months down 5-6%, including continued attrition, program changes, and probability weighted membership items.

Q: Mechanics of actuarial soundness look back process?

A: Focused on shortening period, proactively engaging with states, proof points of forward looking trend, strong relationships with states.

Q: Segment margins in 2026 guidance and long-term targets?

A: Medicaid stable HBR, marketplace expected to move from minus 1 to ~4% pretax, Medicare PDP around 2%. Long-term targets premature due to policy shakeout.

Q: Geographic footprint and PBM contract impact on Medicaid outlook?

A: Jumping off elevated baseline, proof points in 2025, bespoke PBM contract benefits.

Q: Part D dynamics, LIS vs non-LIS populations?

A: Impact of IRA in 2025, growth in membership, good mix, focus on affordability.

Q: Medicaid trends contrast 2025 and 2026, competitive dynamics?

A: 2025 saw core trend elements, 2026 with visibility on levers. Seeing rate pressure affecting smaller plans.

Q: Medicare Advantage pressure and breakeven target?

A: Progression expected, bifurcated under Medicare, PDP reset and other factors impact.

Q: Exchange Bronze utilization patterns?

A: Early look shows nothing alarming, consistent with expectations