Still-Dominant Centene Faces More Exchange Competition With Chart: As Centene’s ACA Footprint Expanded, Market Became More Concentrated

Centene Corp., which has come to dominate the Affordable Care Act exchange market by continuing to expand even when other carriers pulled back, is facing more competition now that the market has stabilized and insurer participation has increased. In recent notes to investors, Wall Street analysts shared diverging views about what that means for Centene’s 2021 earnings, but they — and other experts — generally agree that the insurer won’t be dethroned as the king of the exchanges anytime soon.

Citi analyst Ralph Giacobbe, in a Nov. 16 report, advised investors that he was placing a “negative catalyst watch” on Centene due to the new competitive pressures it’s facing. Centene, he observed, “was displaced as the lowest priced plan in a number of markets,” and although price is only one factor in an individual’s decision of which plan to buy, Centene “has been successful in part due to its lower cost offering historically.” As a result, the insurer “will have to rely on retention and new market entry to offset competitive pressures, which could prove challenging and may stunt growth relative to expectations,” Giacobbe wrote.

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