Centene headquarters in the St. Louis suburb of Clayton, Mo.

Centene

Health insurer Centene reported first quarter net income of more than $1.5 billion despite a drop of 2 million enrollees in individual coverage under the Affordable Care Act also known as Obamacare.

Centene is one of the nation’s largest providers of Obamacare and the enrollment disclosure Tuesday as part of the company’s first quarter earnings report is a snapshot into what health insurers and Americans who buy their coverage are facing after Congress and the Trump administration failed to renew enhanced subsidies.

Centene said Tuesday its enrollment in “marketplace” plans it sells under the Ambetter brand dropped to 3.58 million at the end of the first quarter compared to 5.54 million at the end of last year and 5.62 million in the year ago quarter.

The big dip in Centene’s enrollment is what Democrats in Congress and health insurance industry analysts said would happen after Republicans in Congress and the Donald Trump White House wouldn’t agree to extend enhanced tax credits for buyers of Obamacare. A KFF analysis last fall said middle income Americans “as well as those with low incomes” will see “major out-of-pocket premium increases" if tax credits aren’t extended. And they are with customers reporting a doubling and even tripling of premiums for this year.

The subsidies, or tax credits, made health insurance premiums more affordable for individuals and were enhanced by the Biden administration and the Democratic-controlled Congress, which passed the Inflation Reduction Act of 2022, allowing more Americans to buy coverage. The enhanced subsidies helped enrollment in the ACA’s individual coverage, also known as Obamacare, eclipse a record 24 million Americans and help its popularity hit all-time highs.

The Trump administration, via the Centers for Medicare & Medicaid Services, said in late January that 23 million consumers “have signed up for 2026 individual market health insurance coverage through the Marketplaces since the start of the 2026 Marketplace Open Enrollment Period on November 1, 2025.” Those numbers, however, are a reflection of those who signed up or renewed coverage and not those who ended up paying their first month’s premium, industry analysts have said.

Thus, it is looking like enrollment for 2026 in Obamacare will be less than earlier Trump White House estimates. UnitedHealth Group’s UnitedHealthcare, one of the first major health insurer to report first quarter earnings, last week said its Obamacare enrollment was down as well, falling to 1.4 million from 1.7 million last year.

Centene reported net income of $1.5 billion, or $3.11 a share, compared to $1.3 billion, or $2.63 a share, in the year ago quarter. Revenue rose to $49.9 billion in the quarter compared to $46.6 billion.

Centene also administers Medicaid coverage for low income Americans in several states and sells Medicare coverage for older adults and Medicare prescription drug plans, which helped drive the company’s overall enrollment in the first quarter.

“For the first quarter of 2026, premium and service revenues increased 5% to $44.7 billion from $42.5 billion in the comparable period of 2025,” Centene said in its earnings report. “The increase was primarily driven by premium yield and membership growth in the (prescription drug plan) business, state-directed payments, and rate increases to address medical trend in the Medicaid business, partially offset by lower marketplace and Medicaid membership.”

Like other health insurers, Centene’s report indicated high healthcare costs that have been a drag in past earnings may be stabilizing somewhat as the company’s health benefits ratio, which is the percentage of premium spent on medical costs was down slightly to 87.3% for the first quarter of 2026 compared to 87.5% in the first quarter of 2025.

“The Medicaid HBR (health benefits ratio) decreased by 50 basis points primarily driven by rate and revenue increases, continued tangible progress in managing medical costs and moderate flu costs,” the company said. “The consolidated HBR decrease was also driven by an increase to the premium deficiency reserve (PDR) in 2025 versus no PDR in 2026 for our Medicare Advantage business as a result of our progression towards profitability. The decreases were partially offset by the decline in Marketplace membership and the corresponding impact on consolidated member mix.”

Centene chief executive officer Sarah London said Tuesday’s earnings report is a sign the company continues “to make tangible progress in our margin recovery efforts while strengthening the fundamental operations of each of our businesses."

“Our strong first quarter results position us to increase our full year 2026 adjusted diluted (earnings per share) guidance to greater than $3.40,” London said. “We remain confident in the long-term earnings power of the enterprise and motivated by the positive and lasting impact we can deliver for the families and communities we serve.”