AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 5/6 · 18/10/2026
Moat38
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · Accredited, licensed operations and actual state contract wins support a limited procurement advantage. They do not demonstrate exclusivity or superior economics across markets.
durability · 1/4 · Repeat procurement success is offset by a Florida reprocurement loss, Medicare termination notices and an Arizona award cancellation. Continued advantage depends on quality and economically viable bidding.
customer dependency · 2/4 · State renewals and absorption of membership provide indirect evidence that purchasers value Centene's operating capabilities. Contract loss and Marketplace membership decline show limited dependence; no switching-cost magnitude is disclosed.
erosion resilience · 1/4 · The earnings recovery is positive, but realized Medicaid acuity pressure, pricing-related membership decline and quality-related termination notices demonstrate fragility.
Pricing power31
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 1/4 · Corrective 2026 pricing covered 95% of Marketplace membership and contributed to membership decline. Negative Medicare rate adjustments further limit pricing outcomes; consolidated recovery does not isolate pricing realization.
retention · 2/4 · State reprocurements demonstrate repeat institutional demand, while Marketplace decline and the Florida loss show retention tradeoffs. Service survey results support engagement indirectly, without establishing a retention rate.
margin resilience · 1/4 · Higher Medicaid HBR and 2025 earnings substantially below initial expectations show weak resilience. Improved 2026 GAAP earnings demonstrate recovery but not sustained protection from medical-cost shocks.
contractual freedom · 1/4 · CMS determines Medicare pricing components, and minimum MLR, savings-sharing and premium-return requirements constrain retained economics. Marketplace repricing shows some discretion, exercised with membership consequences.
Predictability93
Financial-sector stability over five consecutive reported annual periods: equal weights for nondeclining revenue frequency, revenue-growth volatility (5–40pp), positive consolidated earnings frequency, and net-income/revenue margin volatility (3–20pp). Uses reported accounting scope; not industrial FCF or a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 7.12
- positiveEarningsShare
- 80.00
- netMarginStdDev
- 2.21
Financial strength56
Qualitative insurance assessment: equal-weight average of four current evidence-backed grades (0–4), scaled to 100. Policy financial-industry-1; not an industrial ratio score or credit rating.
capital adequacy · 3/4 · Year-end 2025 aggregate statutory capital and surplus of $19.730 billion exceeded the $11.288 billion required minimum. Reported aggregate RBC for NAIC-filing subsidiaries exceeded 350% of Authorized Control Level. These support strong reported capital, with reduced statutory surplus and higher requirements versus 2024; they do not establish current entity-level headroom.
liquidity funding · 2/4 · Substantial consolidated cash, positive operating cash flow, debt reduction and covenant compliance support funding capacity. Subsidiary transfer restrictions, CMS receivables and payment-timing benefits temper that strength. March unregulated liquidity is separately disclosed and cannot be equated with June consolidated cash.
asset liability risk · 2/4 · A primarily fixed-income portfolio with disclosed 3.3-year average duration and quantified rate sensitivity allows a partial assessment. Realized claims-acuity pressure and outstanding CMS receivables add risk. Missing reserve development, reinsurance recovery and liability-duration data prevent a strong matching or reserving conclusion.
earnings resilience · 2/4 · First-half 2026 GAAP earnings attributable to Centene rose to $2.632 billion from $1.058 billion, including recovery from a prior-year second-quarter loss. This demonstrates recovery, balanced against the 2025 outlook shortfall and medical-cost pressure; it does not establish through-cycle stability.
Capital allocation—
Insufficient current sector evidence for every criterion; no category score is inferred.
capital efficiency · — · The passages do not provide a sufficiently comparable consolidated equity or capital base and earnings history to establish returns on equity or capital. Parent-only accounting balances cannot substitute for an appropriately scoped insurer return assessment.
distributions and buffers · 2/4 · Reported statutory buffers, actual subsidiary capital contributions, no second-quarter program buybacks and reduced debt indicate buffer preservation. Upstream dividends remain restricted, and year-end capital requirements increased while statutory surplus declined. Subsidiary dividends are not shareholder distributions.
dilution and cost · 2/4 · Outstanding shares rose from 491.757 million at year-end to 493.987 million in June, while first-half diluted weighted average shares were nearly unchanged year over year. Stock compensation increased to $126 million from $94 million. Debt and cash interest payments declined, yielding a mixed dilution and financing-cost assessment.
investment discipline · 2/4 · Completed divestitures generated over $5 billion and operating-model implementation provides evidence of portfolio focus and delivery. Prior contract-related impairment and newly committed separation spending temper the assessment. Estimated future severance charges are commitments and forecasts, not realized savings or completed costs.
Management56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Actual debt reduction, divestiture proceeds and restrained recent program buybacks support discipline. Earlier substantial repurchases and subsequent earnings disruption leave the overall record mixed; operating cash generation also benefited from payment timing.
incentive alignment · 2/4 · Existing ownership requirements, three-year performance awards, clawbacks and implemented TSR-related changes support alignment. Actual ownership compliance and realized payout sensitivity are absent; target design alone does not prove effective alignment.
execution · 2/4 · Contract wins, the implemented Duals Operating Model and improved interim GAAP earnings demonstrate achievements. These are balanced against 2025 underperformance and quality-related contract termination notices. Earnings are indirect evidence of execution, not proof of management causality.
governance · 3/4 · Disclosed existing annual elections, shareholder rights, a predominantly independent board, an independent chair and independent key committees support strong governance structures. Their presence does not establish exceptional oversight outcomes or adoption of any pending proposal.
Evidence
We pursue and achieve accreditation in the majority of states where we currently have health plan operations.
Business / quality accreditation · Filed 17/02/2026
Our regulated subsidiaries are licensed to operate as HMOs, preferred provider organizations (PPOs), third-party administrators (TPAs), utilization review organizations, pharmacies, direct care providers and/or insurance companies in their respective states.
Business / regulated subsidiary licenses · Filed 17/02/2026
We were successful winning new contracts and/or securing reprocurements in Nevada, Illinois and Pennsylvania.
Executive Compensation / profitable growth / contract wins · Filed 26/03/2026
Additionally, strong trust with our state partners provided the opportunity for the absorption of membership in Oregon and Indiana due to payor exits.
Executive Compensation / state relationships and membership absorption · Filed 26/03/2026
We were unsuccessful in our Florida Children's Medical Services (Florida CMS) reprocurement due to our intentional pricing which put us below competitors.
Executive Compensation / Florida CMS reprocurement loss · Filed 26/03/2026
For example, two of our Medicare Advantage contracts received notice of termination for plan year 2025.
Risk Factors / Medicare Advantage contract termination notices · Filed 17/02/2026
A prolonged bid protest has led the agency to cancel the original awards and issue a rebid.
MD&A / Medicaid / Arizona award cancellation and rebid · Filed 28/04/2026
•The combined effect of the expiration of the Enhanced APTCs and the Final Rule led to a higher projected baseline of Marketplace morbidity and, as a result, we took corrective pricing actions for 2026 covering 95% of Marketplace membership.
MD&A / Marketplace morbidity and corrective pricing · Filed 28/07/2026
This dynamic contributed to the Marketplace membership decline in 2026 compared to 2025.
MD&A / Marketplace membership decline · Filed 28/07/2026
Our contracts with states and CMS may require us to maintain a minimum MLR or may require us to share cost-savings in excess of certain levels.
Critical Accounting Policies / minimum MLR and savings sharing · Filed 17/02/2026
In certain circumstances our plans may be required to return premium to the state or policyholders in the event costs are below established levels.
Critical Accounting Policies / premium return requirements · Filed 17/02/2026
CMS establishes annually different pricing components of the Medicare Advantage program that may not adequately reflect changes in the underlying health care costs, and which may reduce the profitability or desirability of various Medicare Advantage plans.
Risk Factors / CMS pricing components · Filed 17/02/2026
For calendar year 2026, CMS again applied a negative rate adjustment for risk model revisions and fee for service normalization.
Risk Factors / 2026 Medicare rate adjustment · Filed 17/02/2026
In addition, as a result of the expiration of the PHE due to the COVID-19 pandemic, and the resulting Medicaid redeterminations process, we have experienced a higher HBR related to the remaining members, due to the acuity profile of this membership, as well as the gaps in eligibility for certain members who have rejoined the Medicaid plans.
Risk Factors / realized Medicaid acuity and HBR pressure · Filed 17/02/2026
The tables below provide reconciliations of non-GAAP items ($ in millions, except per share data): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 GAAP net earnings (loss) attributable to Centene $ 1,091 $ (253) $ 2,632 $ 1,058 Amortization of acquired intangible assets 161 173 327 346 Acquisition and divestiture related expenses — 1 — 1 Other adjustments (1) 46 58 53 61 Income tax effects of adjustments (2) (50) (58) (92) (100) Adjusted net earnings (loss) $ 1,248 $ (79) $ 2,920 $ 1,366 GAAP diluted earnings (loss) per share attributable to Centene $ 2.19 $ (0.51) $ 5.30 $ 2.13 Amortization of acquired intangible assets 0.32 0.35 0.66 0.70 Acquisition and divestiture related expenses — — — — Other adjustments (1) 0.09 0.12 0.11 0.12 Income tax effects of adjustments (2) (0.09) (0.12) (0.19) (0.20) Adjusted diluted earnings (loss) per share $ 2.51 $ (0.16) $ 5.88 $ 2.75 (1) Other adjustments include the following pre-tax items: 2026: (a) for the three months ended June 30, 2026: enterprise optimization costs of $37 million, or $0.07 per share ($0.06 after-tax), severance costs due to enterprise optimization and contract exits of $15 million, or $0.03 per share ($0.02 after-tax), and net gain on debt extinguishment of $6 million, or $0.01 per share ($0.01 after-tax); (b) for the six months ended June 30, 2026: enterprise optimization costs of $50 million, or $0.10 per share ($0.08 after-tax), severance costs due to enterprise optimization and contract exits of $18 million, or $0.04 per share ($0.03 after-tax); gain on sale of a provider network in the Other segment of $10 million, or $0.02 per share ($0.02 after-tax), net gain on real estate transactions of $4 million, or $0.01 per share ($0.01 after-tax), and net gain on debt extinguishment of $1 million, or $0.00 per share ($0.00 after-tax); 2025: (a) for the three months ended June 30, 2025: intangible asset impairment related to the wind-down of certain contracts in the Other segment of $55 million, or $0.11 per share ($0.08 after-tax), and a reduction to the previously reported gain on real estate transactions of $3 million, or $0.01 per share ($0.01 after-tax); iii Table of Contents (b) for the six months ended June 30, 2025: intangible asset impairment related to the wind-down of certain contracts in the Other segment of $55 million, or $0.11 per share ($0.08 after-tax), a reduction to the previously reported gain on the sale of Magellan Rx of $10 million, or $0.02 per share ($0.02 after-tax), and a net gain on real estate transactions of $4 million, or $0.01 per share ($0.01 after-tax).
Non-GAAP reconciliation / GAAP earnings and adjustment details · Filed 28/07/2026
4 Table of Contents CENTENE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions, unaudited) Six Months Ended June 30, 2026 2025 Cash flows from operating activities: Net earnings $ 2,626 $ 1,055 Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation and amortization 600 629 Stock compensation expense 126 94 Impairment — 55 (Gain) loss on debt extinguishment (1) — Deferred income taxes (34) (116) Loss on divestitures — 10 Changes in assets and liabilities Premium and trade receivables (6) (1,801) Other assets (488) (543) Medical claims liabilities (268) 1,809 Unearned revenue (30) 21 Accounts payable and accrued expenses 4,249 209 Other long-term liabilities 1,162 1,857 Other operating activities, net 20 16 Net cash provided by operating activities 7,956 3,295 Cash flows from investing activities: Capital expenditures (374) (343) Purchases of investments (2,328) (3,593) Sales and maturities of investments 2,438 2,508 Net cash (used in) investing activities (264) (1,428) Cash flows from financing activities: Proceeds from long-term debt — 750 Payments and repurchases of long-term debt (1,304) (1,707) Common stock repurchases (33) (473) Proceeds from common stock issuances 18 18 Other financing activities, net (3) (12) Net cash (used in) financing activities (1,322) (1,424) Net increase in cash, cash equivalents and restricted cash and cash equivalents 6,370 443 Cash and cash equivalents reclassified (to) held for sale (73) — Cash, cash equivalents and restricted cash and cash equivalents, beginning of period 17,957 14,156 Cash, cash equivalents and restricted cash and cash equivalents, end of period $ 24,254 $ 14,599 Supplemental disclosures of cash flow information: Interest paid $ 302 $ 320 Income tax net payments (refunds) $ (225) $ 504 The following table provides a reconciliation of cash, cash equivalents and restricted cash and cash equivalents reported within the Consolidated Balance Sheets to the totals above: June 30, 2026 2025 Cash and cash equivalents $ 24,151 $ 14,513 Restricted cash and cash equivalents, included in restricted deposits 103 86 Total cash, cash equivalents and restricted cash and cash equivalents $ 24,254 $ 14,599 The accompanying notes to the consolidated financial statements are an integral part of these statements.
Consolidated Statements of Cash Flows / six months ended June 30 · Filed 28/07/2026
Debt Debt consists of the following ($ in millions): June 30, 2026 December 31, 2025 $2,500 million 4.25% Senior Notes due December 15, 2027 $ 1,067 $ 2,211 $2,300 million 2.45% Senior Notes due July 15, 2028 2,160 2,302 $3,500 million 4.625% Senior Notes due December 15, 2029 3,277 3,277 $2,000 million 3.375% Senior Notes due February 15, 2030 2,000 2,000 $2,200 million 3.00% Senior Notes due October 15, 2030 2,200 2,200 $2,200 million 2.50% Senior Notes due March 1, 2031 2,200 2,200 $1,300 million 2.625% Senior Notes due August 1, 2031 1,300 1,300 Total senior notes 14,204 15,490 Term Loan Facility 1,975 2,000 Debt issuance costs (74) (89) Total debt 16,105 17,401 Less: current portion (75) (50) Long-term debt $ 16,030 $ 17,351 13 Table of Contents Senior Notes Senior Notes due December 15, 2027 During the three and six months ended June 30, 2026, the Company repurchased $118 million and $1,147 million, respectively, of its par value Senior Notes due 2027 through the Company's senior note debt repurchase program.
Note 8 / debt balances and maturities · Filed 28/07/2026
9. Earnings Per Share The following table sets forth the calculation of basic and diluted net earnings (loss) per common share ($ in millions, except per share data in dollars and shares in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Earnings (loss) attributable to Centene Corporation $ 1,091 $ (253) $ 2,632 $ 1,058 Shares used in computing per share amounts: Weighted average number of common shares outstanding 493,819 493,548 492,949 494,896 Common stock equivalents (as determined by applying the treasury stock method) 3,818 — 3,656 1,432 Weighted average number of common shares and potential dilutive common shares outstanding 497,637 493,548 496,605 496,328 Net earnings (loss) per common share attributable to Centene Corporation: Basic earnings (loss) per common share $ 2.21 $ (0.51) $ 5.34 $ 2.14 Diluted earnings (loss) per common share $ 2.19 $ (0.51) $ 5.30 $ 2.13 The calculation of diluted earnings per common share for the three months ended June 30, 2026 excludes 930 thousand shares related to anti-dilutive stock options and restricted stock units.
Note 9 / earnings per share and weighted average shares · Filed 28/07/2026
Common stock, $0.001 par value; authorized 800,000 shares; 625,693 issued and 493,987 outstanding at June 30, 2026, and 623,463 issued and 491,757 outstanding at December 31, 2025
Consolidated Balance Sheets / common shares issued and outstanding · Filed 28/07/2026
Cash flows provided by operations in 2026 were primarily driven by net earnings and the timing of pass-through and other payments.
Liquidity and Capital Resources / operating cash flow timing · Filed 28/07/2026
During the second quarter of 2026, we made no repurchases under the stock repurchase program.
Liquidity Metrics / second-quarter program repurchases · Filed 28/07/2026
As of June 30, 2026, we were in compliance with all covenants.
Liquidity Metrics / debt covenant compliance · Filed 28/07/2026
At December 31, 2025 and 2024, Centene's subsidiaries had aggregate statutory capital and surplus of $19,730 million and $20,258 million, respectively, compared with the required minimum aggregate statutory capital and surplus of $11,288 million and $9,083 million, respectively.
Note 13 / statutory capital and minimum requirements · Filed 17/02/2026
During the six months ended June 30, 2026, we received dividends of $1.2 billion from and made $584 million of capital contributions to our regulated subsidiaries.
Regulatory Capital and Dividend Restrictions / subsidiary distributions and contributions · Filed 28/07/2026
For our subsidiaries that file with the National Association of Insurance Commissioners (NAIC), the aggregate risk-based capital (RBC) level as of December 31, 2025, which was the most recent date for which reporting was required, was in excess of 350% of the Authorized Control Level.
Regulatory Capital and Dividend Restrictions / reported RBC and denominator · Filed 28/07/2026
Such restrictions, unless amended or waived or unless regulatory approval is granted, limit the use of any cash generated by these subsidiaries to pay our obligations.
Regulatory Capital and Dividend Restrictions / cash transfer limitations · Filed 28/07/2026
As of June 30, 2026, there were $2.7 billion of 2025 plan year stand-alone Part D risk-sharing programs receivables outstanding eligible for the February 2026 Receivable Purchase Agreement which continue to be recognized in the Consolidated Balance Sheets.
Liquidity / outstanding CMS Part D risk-sharing receivables · Filed 28/07/2026
Assuming a hypothetical and immediate 1% increase in market interest rates at June 30, 2026, the fair value of our fixed income investments would decrease by approximately $618 million.
Market Risk / fixed-income interest-rate sensitivity · Filed 28/07/2026
As of March 31, 2026, our investment portfolio consisted primarily of fixed-income securities with an average duration of 3.3 years.
Liquidity and Capital Resources / investment portfolio duration · Filed 28/04/2026
At March 31, 2026, we had unregulated cash and investments of $1.5 billion, including $593 million of cash and cash equivalents and $940 million of investments.
Liquidity and Capital Resources / unregulated cash and investments · Filed 28/04/2026
We closed 2025 with full-year adjusted diluted earnings per share (EPS) of $2.08 — modest compared to our outlook at the start of the year — though improved execution in the fourth quarter put us slightly ahead of the expectations we provided to investors in October.
Stockholder letter / 2025 earnings versus initial outlook · Filed 26/03/2026
•The Board provided oversight on the execution of several key milestones in our strategy, including: 01 completing 11 divestitures since December 2021, with another expected to close in 2026, resulting in proceeds of over $5 billion, 02 completing $8.0 billion of common stock repurchases from 2022 to 2025, 03 completing $189 million of Senior Note debt repurchases in 2025, 04 improving Medicare Advantage Star Ratings to 60% of Medicare Advantage members in plans rated 3.5 stars or higher, with 20% in 4-star plans, and 05 reacting to an evolving regulatory and market environment and took corrective pricing actions for 2026 in states covering 95% of Marketplace membership.
Corporate Governance / completed divestitures, repurchases and quality milestones · Filed 26/03/2026
Our governance-focused engagement efforts are summarized below: Who We Engaged Proactively reached out to stockholders representing: of our outstanding shares Including 14 institutional investors Met with stockholders representing: of our outstanding shares Including 3 institutional investors Company Representatives •Chief Accounting Officer •General Counsel •Head of Investor Relations •Head of Total Rewards Topics Discussed •Executive Compensation •Board Culture and Refreshment •Leadership Transitions •Quality Improvement •Corporate Sustainability Proxy Statement 2026 Table of Contents 18 Proxy Summary Governance Highlights In light of the positive stockholder feedback we have received in connection with our enhancements to our governance, we have continued the following: Stockholder Rights Annual Election of Directors Majority Voting Uncontested Director Elections Directors Can Be Removed With or Without Cause "Proxy Access" Right for Stockholders 10% of Shares Can Call a Special Meeting Stockholders Can Act by Written Consent No Supermajority Vote Provisions No Stockholder Rights Plan or "Poison Pill" Board Practices Commitment to Board Refreshment 78% of Board Independent Non-Executive, Independent Chairman Robust Board Evaluation Process Active Stockholder Engagement Mandatory Retirement Age of 75 Limits on Public Company Directorships Continuing Education for Directors Centene Corporation Table of Contents Proxy Summary 19 2 PROPOSAL Advisory Resolution to Approve Executive Compensation The Board recommends a vote FOR this proposal.
Proxy Summary / existing governance rights and board practices · Filed 26/03/2026
Our CEO's requirement is 6x annual base pay; other NEOs' requirements are 3x annual base pay.
Executive Compensation / stock ownership requirements · Filed 26/03/2026
Performance-Based Long-Term Incentive Awards We reward continuous performance on multiple metrics and vest at the end of a three-year period.
Executive Compensation / performance-based long-term awards · Filed 26/03/2026
Clawbacks We can recover performance-based cash and equity incentive compensation paid to executives in various circumstances.
Executive Compensation / clawbacks · Filed 26/03/2026
In response to the feedback we received from stockholders, we have made important changes to our compensation program in recent years including, but not limited to: (1) increasing the formula-based weighting of our annual cash incentive metrics, (2) no longer granting performance-based options, (3) no longer granting cash-based LTI awards, (4) removing duplicative measures in the annual and long-term incentive plans, (5) including absolute and relative TSR in PSU metrics, and (6) increasing stock ownership requirements for our CEO and other NEOs.
Executive Compensation / implemented compensation changes · Filed 26/03/2026
The chairs and each member of each of the Audit and Compliance Committee, the Governance Committee and the Compensation and Talent Committee are independent and hold regular executive sessions providing opportunities for robust discussion independent of management.
Corporate Governance / committee independence · Filed 26/03/2026
We are also strengthening service quality through disciplined execution and technology-enabled oversight: in 2025, 93.3% of 2.9 million post-call survey respondents reported satisfaction and 94.5% reported full resolution.
Stockholder letter / reported service survey outcomes · Filed 26/03/2026
The model went live effective January 1, 2026 in eight states with no access to care issues.
Executive Compensation / Duals Operating Model implementation · Filed 26/03/2026
Item 5. Other Information (a) On July 27, 2026, the Company committed to accept employees' offers to participate in a voluntary separation program, which qualifies as a plan of termination described in FASB ASC paragraph 420-10-25-4, under which material charges are expected to be incurred.
Other Information / voluntary separation commitment · Filed 28/07/2026
During the remainder of 2026, the Company estimates it will record severance costs of approximately $315 million to $365 million primarily in connection with the program.
Other Information / estimated future severance charges · Filed 28/07/2026
