Health Plan Weekly

During its Investor Day on Dec. 12, Centene Corp. projected it would have adjusted earnings per share (EPS) next year of at least $7.25, above the Wall Street consensus of $7.05. Wells Fargo analyst Stephen Baxter wrote in a Dec. 12 note that “barring any surprises,” the guidance was “a positive” and “modestly favorable.”  

The adjusted EPS guidance represents a 6.6% increase over this year’s projection of at least $6.80 and comes amid a Medicaid market that Centene CEO Sarah London noted “has experienced a period of intense disruption over the last 18 months” due to the redetermination process that began in April 2023. Since then, millions of Medicaid beneficiaries have lost coverage, while the remaining Medicaid members have, on average, been sicker and used more services even as reimbursement rates to insurers have not always increased in line with the higher costs. 

While many upcoming health care policies remain unclear, potential changes brought about by the Trump administration will be a net negative credit-wise for the industry, according to an S&P Global Ratings analyst. 

In a Dec. 2 article, analyst Arthur Wong named the top five developments S&P Global is watching: the Affordable Care Act, Medicare drug pricing negotiations in the Inflation Reduction Act (IRA), the Federal Trade Commission’s (FTC) tone on mergers and acquisitions (M&A) and tariffs, and HHS priorities. “We do not envision any rating changes due to the change in administration until it becomes clear what policies will be implemented and their time frame,” Wong wrote. “However, we see more downside than upside risk to ratings over the near term.” 

In a letter released by Families USA, the advocacy group plus more than 70 organizations called on Congress to pass an extension of the enhanced advance premium tax credits (APTCs) that are set to expire after 2025. Multiple studies have suggested that if Congress fails to extend the subsidies, millions of Americans will lose their Affordable Care Act exchange coverage, and millions more will see their monthly premiums go up significantly.

The enhanced subsidies have been in place since 2021 due to the passage of the American Rescue Plan Act, and the Inflation Reduction Act extended them through 2025. They increased the level of APTCs available to lower-income individuals (making $0-premium plans widely available to that group) and extended APTC eligibility to people with incomes at or above 400% of the federal poverty level (FPL).

While President-elect Donald Trump has not disclosed what his health care policy priorities will be when he takes office next month, some conservative think tanks have recommended decreasing the federal medical assistance percentage (FMAP) for the Medicaid expansion population. Such a move would require congressional approval, but if that were to happen, it could have a significant impact on the uninsured rate and access to care for many adults, according to a recent KFF issue brief.  

Twelve states have laws that would automatically end Medicaid expansion or require other changes if the FMAP falls below the current 90% level. However, Robin Rudowitz, an author of the KFF brief, tells AIS Health that “all states would basically need to come back to the table to evaluate what to do because the federal government pays for such a large share” of the Medicaid expansion.