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Centene warns on Obamacare subsidy cuts, shares dive

Centene warns on Obamacare subsidy cuts, shares dive
From Reuters - October 24, 2017

(Reuters) - Centene Corp said on Tuesday White House moves to cut off Obamacare subsidies would knock 7-12 cents per share off the health insurers fourth-quarter earnings, sending its shares 5 percent lower.

A U.S. judge on Monday appeared skeptical toward a request from several states that want him to order the Trump administration to continue payments to health insurers under the Affordable Care Act, popularly known as Obamacare.

Trump earlier this month terminated the payments, which help cover out-of-pocket medical expenses for low-income Americans and were one element of strong quarterly results reported by Centene earlier on Tuesday.

We fully recognize the possibility that cost-sharing reductions, CSRs, might not continue to be funded, Chief Executive Michael Neidorff told a conference call with analysts on the third quarter results.

The company has filed health plans for 2018 in all its exchange markets which assumed that there would be no payments, he said.

Trump has alternately supported, and dismissed, an effort by Republican and Democratic senators that would reinstate the subsidies for two years until a broader replacement to the 2010 Act can be negotiated.

Cantor Fitzgerald analysts said investors should not try to extrapolate the potential fourth-quarter impact for 2018, especially as many individuals will receive higher tax credit subsidies.

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