Centene Plunges in Foreboding Sign for Health Insurers (1)

Health insurer Centene Corp. shocked investors Tuesday when it withdrew its profit outlook on precipitously rising risks from Affordable Care Act plans, sending shares plummeting the most on record.

The company appears to have been badly caught off guard by the impact of US government actions. It’s an ominous sign for insurers, whose purpose is to price for risk but have lately been blindsided by it.

Shares of Centene dropped more than 40% in New York on Wednesday, the biggest one-day drop since its initial public offering in 2001. Other insurer stocks including Molina Healthcare Inc. and Oscar Health Inc. ...