Centene’s Subsidiary Medicare to Withdraw from 6 States in 2025

This decision affects Alabama, Massachusetts, New Hampshire, New Mexico, Rhode Island, and Vermont. 

Centene Corporation announced that its Medicare Advantage (MA) subsidiary, WellCare, will withdraw from six states starting in 2025. 

This decision affects Alabama, Massachusetts, New Hampshire, New Mexico, Rhode Island, and Vermont. The move will impact approximately 37,300 members across these states, representing about 3% of Centene’s current MA membership.

New Mexico will see the highest impact, with around 12,600 members affected. In Vermont, where Centene holds about 9% of the market share, the withdrawal is expected to disrupt the local insurance landscape significantly.

Stephens, an investment bank, disclosed the information about Centene's exit. According to him, the insurer's retreat from these states is part of a broader strategic shift. 

Despite the withdrawal from these markets, Centene will continue to offer its prescription drug plans, maintaining a strong presence in the standalone Part D market with a 29% market share, according to data from the Centers for Medicare & Medicaid Services.

What Led to the Move?

Centene’s decision to withdraw from these states comes amid a challenging period for the company. 

As of July, Centene reported a 13% decrease in total MA enrollment year over year. This decline includes a 27% drop in group MA and nearly a 13% decrease in individual MA. 

Reportedly, the company's exit from these states will not affect its individual marketplace or Medicaid contracts in the affected regions, as noted in a memo from health brokerage Pinnacle Financial Services.

“While our state footprint is changing, our commitment to delivering quality care and services to our members remains strong. We want you to know this difficult decision was not made lightly. Still, we will enable us to focus our strategy and resources better, so we can continue transforming the health of the communities we serve, one person at a time – for years to come,” Centene stated.

Competitive Landscape

CVS and UnitedHealthcare, two major competitors, remain in all the states where Centene is withdrawing. 

This continued presence of competitors is likely to affect the market dynamics and potentially offer alternative options for affected members.

Centene's decision reflects broader trends in the healthcare insurance market, where companies continuously adjust their strategies in response to changing market conditions and financial performance. 

The company’s focus on refining its operations and maintaining its commitment to quality care remains a central part of its strategy.