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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Leslie Small

Leslie Small

Leslie has been working in journalism since 2009 and reporting on the health care industry since 2014. She has covered the many ups and downs of the Affordable Care Act exchanges, the failed health insurer mega-mergers, and hundreds of other storylines spanning subjects such as Medicaid managed care, Medicare Advantage, employer-sponsored insurance, and prescription drug coverage. As the managing editor of Health Plan Weekly and Radar on Drug Benefits, she writes and edits for both publications while overseeing a small team of reporters who also focus on the managed care sector. Before joining AIS Health, she was a senior editor for the e-newsletter Fierce Health Payer, and she started her career as a copy editor at multiple local newspapers. She graduated with a dual degree in journalism and political science from Penn State University.

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