Centene Corp.’s two dominant business lines — managed Medicaid and the Affordable Care Act exchanges — both were sources of significant headwinds and tailwinds in the first quarter of 2021, underscoring the often-contradictory impact of the COVID-19 pandemic on the health insurance sector.

On the one hand, Centene acknowledged in its earnings report that it saw higher COVID-19 and traditional utilization in its ACA marketplace business, surprising Jefferies analysts who noted that “those components have tended to move in opposite directions.” Centene also saw its marketplace membership decline year over year by 14%, the analysts noted.

“We knew [Centene’s] relatively higher pricing would create HIX membership pressure…but thought [the insurer’s] decision not to chase price down would help insulate the MLR [medical loss ratio],” analysts David Windley and David Styblo wrote. “Instead, [Centene] has the double whammy of declining membership and margins.”

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