A health insurer that runs government-sponsored plans, Centene covers tens of millions of people through Medicaid, Medicare, and its Ambetter Health marketplace plans, alongside specialty services like the AcariaHealth pharmacy. It began in 1984 when a former hospital bookkeeper, Elizabeth "Betty" Brinn, started a small nonprofit Medicaid plan in Milwaukee called Family Hospital Physician Associates. The company adopted the name "Centene" in 1997 from the Latin for "hundred," and its founding proceeds later helped create a children's foundation in Milwaukee.
Q2 2026 revenue rose 9.9% to $53.6B and HBR improved to 89.6% from 93.0%
The medical cost ratio improved sharply from the Q2 2025 distortion. rose 9.9% to $53.6B and was $2.19 as the fell to 89.6% from 93.0% on better pricing and Medicaid cost management. The business has normalized after the 2025 year, with cash at $24.2B.
Key takeaways
The consolidated improved to 89.6% from 93.0% a year earlier, driven by lower medical costs from improved pricing and risk transfer, Medicaid rate increases, and a favorable Medicare 2025 benefit year resolution.
rose 9.9% to $53.6B, led by higher premium tax revenue, premium and membership growth, and risk adjustment transfers, partly offset by lower Marketplace and Medicaid membership.
was $2.19 versus a $(0.51) loss a year earlier; was $1,198M, compared with a $(458)M loss in Q2 2025, with the year-ago quarter weighed by the risk adjustment cut.
Section summaries
Management's Discussion and Analysis
Q2 2026 revenue grew 10% to $53.6B, driven by premium tax and PDP growth, while HBR improved to 89.6% from 93.0% on better Marketplace pricing and Medicaid cost management.
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Total revenues rose 10% to $53.6B, primarily from higher premium tax , premium and membership growth, and transfers, partially offset by lower Marketplace and Medicaid membership.
Medicaid rose 24% on rate increases and medical cost progress; Medicare gross margin rose 35% on a favorable 2025 program resolution and no 2026 ; Commercial gross margin more than doubled on rate increases and risk adjustment transfers.
was $3.6B in the quarter and $8.0B for the first half of 2026, up from $3.3B a year earlier, driven by and timing of pass-through payments.
The company repurchased $1.3B of senior notes in the half and has $1.8B remaining under its stock program; cash and equivalents rose 66.4% to $24.2B.
What changed
Q2 2025 flagged the Q3 2026 rates and corrective pricing taking effect: HBR fell to 89.6% from 93.0% as refiled rates and improved pricing lowered Marketplace medical costs.
Q1 2026 flagged Q2 HBR against 87.3%: the ratio rose to 89.6%, as morbidity elevation and Medicare program effects offset earlier improvement.
Q1 2026 flagged Q2 Commercial after APTC expiration: Commercial gross margin more than doubled, but on rate increases and risk transfers rather than membership recovery.
Q1 2026 flagged Q2 as the $1.0B sale rolled off: half-year cash was $8.0B, up from $3.3B, with the timing effect replaced by pass-through payment timing.
FY 2025 carried the divestiture watch item: the 10-Q reports no completion this quarter, leaving the cash and Other effect unresolved.
Risk factors were restated as unchanged from the 2025 10-K, so no new company-specific risk was added this quarter.
What to watch
Q3 2026 against the 89.6% Q2 level as morbidity stays elevated and Medicaid rate adjustments continue.
California Medicaid membership reduction from the UIS transition expected in 2027, flagged in the Q2 outlook.
Completion of the divestiture and its effect on cash and the Other .
Q3 2026 against the $3.6B Q2 figure as pass-through payment timing normalizes.
Consolidated HBR improved to 89.6% from 93.0%, driven by a lower HBR from improved pricing and risk transfer, Medicaid rate increases and cost management, and a favorable Medicare 2025 benefit year resolution.
decreased to 7.0% from 7.1%, reflecting cost management, higher , and a mix shift toward the lower-SG&A business.
Medicaid rose 24% on rate increases and medical cost progress; Medicare gross margin rose 35% on favorable 2025 program resolution and no 2026 PDR; Commercial gross margin more than doubled on rate increases and transfers.
was $8.0B for the first half of 2026, up from $3.3B, driven by and timing of pass-through payments; the company repurchased $1.3B of senior notes and has $1.8B remaining under its stock program.
Outlook includes expected California Medicaid membership reduction from UIS transition in 2027, continued morbidity elevation, and D-SNP integration opportunities beginning 2027.
Quantitative and Qualitative Disclosures About Market Risk
INVESTMENTS AND DEBT As of June 30, 2026, we had short-term investments of $2.9 billion and long-term investments of $17.8 billion, including restricted deposits of $1.5 billion. The short-term investments generally consist of highly liquid securities with maturities between thr…
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INVESTMENTS AND DEBT
As of June 30, 2026, we had short-term investments of $2.9 billion and long-term investments of $17.8 billion, including restricted deposits of $1.5 billion. The short-term investments generally consist of highly liquid securities with maturities between three and 12 months. The long-term investments consist of municipal, corporate and U.S. Treasury securities, government-sponsored obligations, life insurance contracts, asset-backed securities, and equity securities, and have maturities greater than one year. Restricted deposits consist of investments required by various state statutes to be deposited or pledged to state agencies. Due to the nature of the states' requirements, these investments are classified as long-term regardless of the contractual maturity date. Substantially all of our investments are subject to interest rate risk and will decrease in value if market rates increase. Assuming a hypothetical and immediate 1% increase in market interest rates at June 30, 2026, the fair value of our fixed income investments would decrease by approximately $618 million.
For a discussion of the interest rate risk that our investments are subject to, refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, Part 1, Item 1A, "Risk Factors – Our investment portfolio may suffer losses which could materially and adversely affect our results of operations or liquidity."
A description of the legal proceedings to which the Company and its subsidiaries are a party is contained in Note 11. Contingencies to the consolidated financial statements included in Part I of this Quarterly Report on Form 10-Q, and is incorporated herein by reference.
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A description of the legal proceedings to which the Company and its subsidiaries are a party is contained in Note 11. Contingencies to the consolidated financial statements included in Part I of this Quarterly Report on Form 10-Q, and is incorporated herein by reference.