Centene and CVS Health have reported mixed Q3 financial results, with both companies showing strong revenue growth but contending with higher medical costs, regulatory headwinds and significant impairment charges that weighed on profitability.
Centene posted Q3 total revenue of $49.7 billion, up 22% from a year earlier, driven by growth in its Medicare Prescription Drug Plan (PDP) and Marketplace businesses. Premium and service revenue reached $44.9 billion, while cash flow from operations stood at $1.4 billion.
The company's health benefits ratio (HBR) increased to 92.7% from 89.2% in Q3 2024, reflecting higher medical costs in its Marketplace and Medicaid portfolios. Administrative efficiency improved, with both GAAP and adjusted SG&A ratios at 7%, down from 8.3% a year earlier, as Centene benefited from cost leverage across higher revenue.
However, Centene reported a $6.7 billion goodwill impairment charge linked to market conditions and a decline in its stock price following the One Big Beautiful Bill Act, resulting in a GAAP loss of $13.50 per diluted share. Adjusted EPS was $0.50.
CEO Sarah M. London said the results demonstrate progress toward the company’s near-term milestones, adding that Centene remains focused on margin improvement, cost management, and long-term operational stability.
CVS Health reported record revenues of $102.9 billion, up 7.8% year-over-year, supported by growth across all business segments.
Despite strong underlying results, the company reported a GAAP loss of $3.13 per diluted share after recording a $5.7 billion goodwill impairment charge in its Health Care Delivery unit. Adjusted EPS rose to $1.60, up from $1.09 last year.
Adjusted operating income increased 36% to $3.46 billion, led by improved performance in the Health Care Benefits segment, which generated $35.9 billion in revenue, up 9.1%. Growth was supported by gains in government-sponsored plans and favorable prior period development. The Health Services and Pharmacy & Consumer Wellness divisions also recorded double-digit revenue growth but faced continued margin pressure from pricing and reimbursement dynamics.
CEO David Joyner said the company’s performance reflects steady progress in stabilizing operations and pursuing sustainable growth across its core health care and pharmacy businesses. CVS raised its full-year adjusted EPS guidance to $6.55 to $6.65, citing efficiency improvements and stronger operational discipline.
Across the US health insurance sector, major carriers are facing persistent medical cost inflation, rising utilization, and regulatory shifts linked to the Inflation Reduction Act. Companies such as UnitedHealth Group, which reported 12% revenue growth in Q3 2025, have similarly highlighted cost pressures and reimbursement challenges as ongoing constraints.
Analysts expect insurers to maintain their focus on expense control, portfolio diversification, and data-driven care strategies to protect margins and navigate a challenging policy environment heading into 2026.
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