Centene Corporation

Moat components and weights: cost advantage (35%), efficient scale (25%), intangibles/permits/state relationships (25%), switching costs (10%), network effects (5%). Cost advantage (≈70/100): Centene’s massive scale in Medicaid/Marketplace enables lower admin cost per member and stronger provider contracting in key states.

Efficient scale (≈75/100): many state Medicaid markets support only a handful of MCOs, deterring new entrants and favoring incumbents with compliance infrastructure.

Intangibles (≈65/100): state contracts and execution track records matter; Centene has posted multiple recent RFP wins across states (NV, IL duals, KS, IA, CA dental), evidencing durable relationships.

Switching costs (≈50/100): states can rebid and reassign membership; members themselves face low frictions, though provider and plan networks create some stickiness. Network effects (≈15/100): limited classic network effects beyond scale in provider networks.

Weighted aggregate ≈65. Key erosion risks: regulatory resets (MLR floors, RADV changes), Marketplace morbidity and risk-adjustment volatility, and state budget stress that can compress margins or reassign contracts.