CNC · 10-Q · 2026Q1 · Full report

Medicare PDP Growth / Gross Margin

CENTENE CORP · 2026-04-28 · Importance 74 · Surprise 58

Centene's Medicare segment revenues rose 18% year‑over‑year in Q1 2026, primarily driven by higher stand‑alone Medicare PDP premiums and increased PDP membership. Medicare PDP membership reached 8.78 million and contributed materially to segment revenue growth and lower SG&A on a per‑member basis relative to other lines. Gross margin increased $350 million year‑over‑year, supported by rate increases and the absence of a prior‑year Medicare Advantage premium deficiency reserve (PDR), partially offset by medical and pharmacy cost pressures.

Key facts

• In December 2024 Centene recorded a premium deficiency reserve of $92 million related to the 2025 Medicare Advantage contract year, which was increased to $270 million in Q1 2025; no premium deficiency reserve related to the 2026 Medicare Advantage contract year has been recorded.
• Centene increased its premium deficiency reserve for the 2025 Medicare Advantage contract year to $270 million in Q1 2025 from an initial $92 million recorded in December 2024.
• Medicare gross margin for Q1 2026: $1,554 million, an increase of $350 million compared to Q1 2025.
• Medicare PDP membership at March 31, 2026: 8,780,600 compared to 7,867,800 at March 31, 2025.
• Wellcare is offering Medicare Advantage plans in 32 states and PDP products across all 50 states in 2026.

Impact estimates