CNC · 10-Q · 2026Q1 · Full report

Medical Cost Trend / Benefit Ratio

CENTENE CORP · 2026-04-28 · Importance 58 · Surprise 42

Centene reports elevated medical cost trends driven by increasing medical demand, expanded access to care from state program changes (including carve-ins for behavioral health and home and community-based services), and rapid availability of new high‑cost pharmaceuticals; the company monitors this through its health benefits ratio (HBR), which was 87.3% in Q1 2026. Management attributes intensification of cost drivers to member behavior (potential eligibility/subsidy uncertainty) and provider billing/practice changes and is working with states on rate setting to align premiums with population acuity. Centene is addressing trends via clinical initiatives, care management, network design, and anti‑fraud/waste/abuse programs to moderate medical cost growth.

Key facts

• SG&A expense ratio for Q1 2026: 7.6%, compared to 7.9% for Q1 2025.
• Adjusted SG&A expense ratio for Q1 2026: 7.6%, compared to 7.9% for Q1 2025.
• The company implemented a third-party PBM contract that commenced in January 2024 which has impacted results and will continue to impact future results.
• Cost of services increased by $4 million in Q1 2026 versus Q1 2025; cost of service ratio for Q1 2026 was 91.4% compared to 89.8% in Q1 2025.
• Health benefits ratio (HBR) for Q1 2026: 87.3%, compared to 87.5% for Q1 2025.