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Shares of healthcare provider Centene plunged nearly 40 per cent to their lowest level since 2017 after the company said ballooning costs skewed its forecasts and forced it to withdraw its guidance.<\/p>\n
In a regulatory filing late on Tuesday, Centene said its healthcare patient spending related to the Obamacare insurance marketplaces and Medicaid were higher than estimated so far this year. Analysts expected the higher spending would cut into the company\u2019s near-term profits.<\/p>\n
The company said it was hit by higher Medicaid costs related to behavioural health, home health and high-cost drugs, especially in New York and Florida. Its Obamacare insurance costs \u201c[are] significantly higher than\u201d the company\u2019s assumptions.<\/p>\n
Centene\u2019s announcement rippled across the healthcare sector on Wednesday. Shares of rivals Oscar Health and Elevance Health, which also focus on low-cost Obamacare health plans, were down 15 per cent and 8 per cent, respectively.<\/p>\n
Analysts cautioned that the sinking stocks were not related to the ongoing budget negotiations in the US Congress, which have included cuts to Medicaid, which provides healthcare to low-income and disabled Americans.\u00a0<\/p>\n
Shares of bigger healthcare providers UnitedHealth, Humana and Cigna were down between 2 per cent and 3 per cent on Wednesday as concerns about Centene\u2019s disclosure spread. <\/p>\n