Centene Withdraws Earnings Forecast, Triggering Possible Credit Downgrade
S&P Global Ratings is considering whether to reclassify Centene Corp.'s credit ratings to junk, which would strongly impact its borrowing power. Centene, the top seller of ACA health plans, is suffering from financial uncertainty due to federal crackdowns on Affordable Care Act enrollments.
Bloomberg:
S&P Says It’s Looking At Cutting Centene's Credit Ratings To Junk Status
S&P Global Ratings said it’s considering cutting Centene Corp.’s credit ratings to junk, citing the health insurer’s suspending its 2025 profit outlook. Centene said last week that it was withdrawing its previous forecast for its earnings for the year, because insurance market trends were veering from its assumptions, particularly in the plans it offers under the Affordable Care Act. Without that information, S&P has less confidence that the insurer will build the capital it needs quickly enough, the bond grader said in a statement on Monday. (Hall, 7/7)
The Wall Street Journal:
More Pressure Mounts On Health Insurers As Costs Continue To Rise
Molina Healthcare became the latest health insurer to warn that higher medical costs will hit earnings this year, adding to Wall Street’s worries about an industry already facing the loss of millions of customers because of the newly passed Republican megabill. Last week, shares plunged across the industry after Molina’s larger competitor Centene withdrew its financial guidance for 2025, saying its profits would fall well short of what the company previously expected. In the wake of that, Molina’s announcement wasn’t a complete surprise, limiting the immediate downside to the shares of the California-based managed care company and its competitors. (Wilde Mathews, 7/7)
Modern Healthcare:
Exchange Insurers Owe $10.4B In Risk-Adjustment Payments
Health insurance companies will trade $10.4 billion in exchange risk-adjustment payments this year, the Centers for Medicare and Medicaid Services announced. Centene, CVS Health subsidiary Aetna and UnitedHealth Group subsidiary UnitedHealthcare are set to receive more than expected, while Cigna, Elevance Health, Molina Healthcare and Oscar Health will owe greater sums than projected, according to an analysis of CMS data and corporate financial disclosures by the investment bank Barclays Capital. (Tepper, 7/7)
Bloomberg:
Villages Health System Sees $350 Million In Medicare Overcharges
A health-care system serving the largest retirement community in the US has filed for bankruptcy after disclosing it potentially overbilled Medicare by at least $350 million, according to court filings. The Villages Health System LLC, which operates clinics for retirees living in the Villages in Central Florida, said in a July 3 court filing that it logged patient diagnoses that “were not clinically supported or otherwise did not meet Medicare coding and payment guidance.” (Randles, 7/7)
More health industry news —
AP:
Trump's Travel Restrictions Squeeze Hospitals That Rely On International Medical Residents
Some hospitals in the U.S. are without essential staff because international doctors who were set to start their medical training this week were delayed by the Trump administration’s travel and visa restrictions. It’s unclear exactly how many foreign medical residents were unable to start their assignments, but six medical residents interviewed by The Associated Press say they’ve undergone years of training and work only to be stopped at the finish line by what is usually a procedural step. (Ramakrishnan and Shastri, 7/4)
Chicago Tribune:
Northwestern Begins Program To Address Obesity In Pregnancy
Northwestern Medicine has launched a program to help patients who have concerns related to obesity and are planning a pregnancy. Women with higher levels of body fat sometimes struggle to conceive and can face greater health risks during pregnancy. The PEARL program, which stands for Preconception and Early Assessment Care Rooted in Lifestyle Management, aims to help these patients have safe and healthy pregnancies. (Weaver, 7/5)
In pharmaceutical developments —
Bloomberg:
Novartis Wins Approval For First Malaria Medicine For Babies
Novartis AG won regulatory approval for the first medicine designed for babies with malaria, the latest development in the global fight against the mosquito-borne disease. The Swiss drugmaker said Tuesday the country’s agency Swissmedic approved a new formulation of its drug Coartem to treat infants weighing from 2 kilograms to under 5 kilograms (11 pounds). The company expects approval from eight countries in Africa to follow, and plans to roll out the treatment on a “largely not-for-profit basis,” it said. (Petroff, 7/8)
Bloomberg:
KalVista Shares Surge As FDA Approves New Drug For Hereditary Angioedema
KalVista Pharmaceuticals Inc. shares jumped after the company said it received US Food and Drug Administration approval for its pill for hereditary angioedema, a rare and potentially deadly condition that causes severe swelling throughout the body. KalVista said last month that regulators had delayed making a decision on its drug due to the agency’s “heavy workload and limited resources” after the FDA told the company it would miss a June deadline for approval. (Koons, 7/7)
