Centene is offering voluntary buyouts to most employees after losing 2 million ACA members. The health insurer faces a further squeeze from $900 billion in Medicaid cuts. Shares are up 54% this year.
Centene Corp. will offer buyouts to most employees after membership in its health insurance plans dropped sharply over the past year, a company spokesperson said.
Employees can apply for the voluntary separation program. The offer is not guaranteed or automatic, the spokesperson added. The St. Louis-based health insurer had 61,000 workers in the first quarter. The spokesperson did not say how much Centene aims to shrink the workforce. Layoffs could follow if the company does not hit its target through voluntary exits.
"When our membership shifts, we need to shift our organization accordingly," Chief Executive Officer Sarah London said in a message to staff Monday that was viewed by Bloomberg News.
Centene shares fell 2.7% on Monday in New York trading.
Overall membership in the first quarter declined 6% from a year ago to 26.3 million, according to a filing. The company focuses on government health programs: Medicaid for low-income Americans and Medicare for older people. It also sells Affordable Care Act plans.
The biggest drop came in the ACA business. Centene lost about 2 million members this year after Congress let COVID-era subsidies that lowered the cost of those plans expire.
Centene forecasts 2026 revenue of $189.5 billion at the midpoint, roughly a 3% decrease from 2025. The stock plunged last year after the company pulled its outlook. It has recovered to gain 54% this year through Monday's close. The S&P 500 Index is up 10% over the same period.
The timing of the buyout announcement was "unusual," analysts from Barclays wrote in a research note. It does not appear to be driven by the actuarial data update that tanked Centene's shares in July.
The insurer is preparing for a further squeeze on its business. Congress last year cut more than $900 billion from Medicaid over a decade, with work requirements starting next year. About 10 million people are expected to lose insurance coverage by 2034 under President Donald Trump's signature budget law.
Centene carries an Alpha Score of 55 out of 100, labeled Moderate, in the Healthcare sector. The CNC stock page has more detail.
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