Centene (CNC) Stock Slides After Medicare Advantage Update

Centene Corp (NYSE:CNC) shares are trading sharply lower Tuesday morning after federal regulators outlined 2027 Medicare Advantage payment changes that amounted to effectively flat funding for insurers.

The Centers for Medicare & Medicaid Services projected a net average payment increase of just 0.09%, far below Wall Street expectations for 4% to 6% growth, implying a real cut once medical inflation is considered. Here’s what investors need to know.

• Centene stock is feeling bearish pressure. What’s behind CNC decline?

Why The CMS Proposal Hits Centene Specifically

Centene, a managed-care company whose business is heavily concentrated in government-sponsored health programs, including Medicare Advantage, Medicaid and ACA exchange plans, is particularly exposed to this slower funding backdrop.

With thin margins and a member base skewed toward lower-income, medically complex patients, Centene relies on risk-adjusted payments to match revenue with high-cost populations.

CMS also proposed tighter risk-adjustment rules, including excluding diagnoses captured via audio-only visits and some chart reviews starting in 2027. That raises the risk that Centene will be paid less for the same sick members, squeezing margins unless it can rapidly re-code, reprice benefits or trim extras in its Medicare Advantage products.

Investors potentially fear lower future bids, reduced benefit richness and potential membership losses if CNC pulls back from aggressively priced plans.

UnitedHealth Earnings Deepen Sector-Wide Anxiety

Sentiment worsened after UnitedHealth Group Inc (NYSE:UNH) reported elevated medical care ratios and a revenue outlook that trailed Street expectations, while its stock slid more than 19% in early trading Tuesday.

UNH's results signal that medical cost trends are already running hot. Combined with CMS's minimal 2027 rate increase, the message for Centene is clear: costs are rising faster than expected while future funding lags, potentially prompting investors to price in EPS pressure.

Short-Term Strength Amid Long-Term Struggles

Currently, the stock is trading 2.1% below its 20-day simple moving average (SMA) but is 7.1% above its 50-day SMA, demonstrating some short-term strength. Over the past 12 months, shares have decreased by 33.46%, and they are currently positioned closer to their 52-week lows than highs.

The RSI is at 65.05, which is considered neutral territory, while the MACD is below its signal line, indicating bearish pressure on the stock. The combination of neutral RSI and bearish MACD suggests mixed momentum.

• Key Resistance: $47.50
• Key Support: $37.50

Centene’s Business Model

Centene is a managed care organization that focuses on government-sponsored healthcare plans, including Medicaid, Medicare, and the individual exchanges. Centene served 22 million medical members as of December 2024, mostly in Medicaid (about 60% of membership), the individual exchanges (about 20%) and Medicare (about 5%). The company also has a military contract and provides Medicare Part D pharmaceutical plans.

The current regulatory news is particularly relevant for Centene, as the proposed flat rates for Medicare could impact its revenue and profitability. As a significant player in the healthcare market, Centene’s performance is closely tied to government policies and reimbursement rates.

Benzinga Edge Rankings

Below is the Benzinga Edge scorecard for Centene, highlighting its strengths and weaknesses compared to the broader market:

• Momentum: Strong (Score: 74.74) — Stock is outperforming the broader market.

The Verdict: Centene’s Benzinga Edge signal reveals a strong momentum score, indicating that the stock is currently outperforming its peers. However, the mixed technical indicators suggest that investors should remain cautious as they monitor upcoming regulatory impacts.

Top ETF Exposure

• Invesco S&P 500 Pure Value ETF (NYSE:RPV): 1.87% Weight
• iShares US Health Care Providers ETF (NYSE:IHF): 3.14% Weight
• Invesco S&P 500 Equal Weight Health Care ETF (NYSE:RSPH): 1.76% Weight

Significance: Because CNC carries significant weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.

CNC Shares Slide Tuesday

CNC Price Action: Centene shares were trading 12.23% lower at $40.62 at the time of publication on Tuesday, according to Benzinga Pro data.

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