{"id":55370,"date":"2025-08-08T21:00:06","date_gmt":"2025-08-08T21:00:06","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/55370\/"},"modified":"2025-08-08T21:00:06","modified_gmt":"2025-08-08T21:00:06","slug":"sun-life-shares-plunge-as-medicaid-funding-uncertainty-prompts-revision-to-u-s-dental-forecast","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/55370\/","title":{"rendered":"Sun Life shares plunge as Medicaid funding uncertainty prompts revision to U.S. dental forecast"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Sun Life works with U.S. states to administer Medicaid and Medicare Advantage dental benefits through the DentaQuest business, which it acquired in 2022 for US$2.5-billion.Chris Helgren\/Reuters<\/p>\n

Sun Life Financial\u2019s SLF-T<\/a> shares plunged as much as 8.5 per cent on Friday, a day after the Canadian insurer said it would miss a 2025 profit target for its dental business in the U.S. due to uncertainty over Medicaid funding.<\/p>\n

Sun Life, which bulked up its dental business through the US$2.5-billion acquisition of DentaQuest in 2022, said underlying net income for the dental business, which has struggled in past quarters, is expected to be below US$100-million in 2025.<\/p>\n

The forecast revision was driven by uncertain Medicaid funding resulting in slower negotiations with states on coverage rates and higher Medicaid claims, the company said.<\/p>\n

Sun Life works with U.S. states to administer Medicaid and Medicare Advantage dental benefits through the DentaQuest business and is dependent on government funding.<\/p>\n

\u201cThe claims are also increasing at a faster pace, which I partially think is because people are seeing that they may lose their Medicaid benefits. So they\u2019re going to the dentist more quickly,\u201d CEO Kevin Strain said in an interview on Friday.<\/p>\n

Strain noted that the states have been reluctant to pass on the increased claims costs, something he expects to sort itself out over the next few years.<\/p>\n

\u201cIf we\u2019re struggling, you can imagine that the smaller players are really struggling with it … We\u2019ll work our way through it,\u201d he said.<\/p>\n

The U.S. remained one of the company\u2019s fastest growing and least capital-intensive regions, Strain added.<\/p>\n

Sun Life posts rise in quarterly profit on strong Asia-unit performance<\/a><\/p>\n

Sun Life expects over 12-per-cent underlying net income growth for Sun Life U.S. in the long term, with the dental business expected to contribute at least a third of overall earnings in the region.<\/p>\n

The stock has lost about 8 per cent of its value, including Thursday\u2019s losses, while peer Manulife which also reported weakness in its U.S. business, is down 6.5 per cent.<\/p>\n

\u201cWe believe that a reversal in the (Sun Life\u2019s) U.S. dental business that caused the company to retract its 2025 profit target for this business has implications beyond the quarter,\u201d National Bank analyst Gabriel Dechaine said.<\/p>\n

Analysts have said Sun Life\u2019s dental business could be vulnerable to provisions in U.S. President Donald Trump<\/a>\u2019s recent tax-cut and spending legislation, known as the One Big Beautiful Bill Act, which aims to cut Medicaid spending. That could weigh on the future growth of the business as tighter eligibility requirements could shrink Medicaid enrollment over time.<\/p>\n

Underlying net income fell 4 per cent in the U.S., which accounts for about a fifth of the company\u2019s underlying earnings.<\/p>\n

Its underlying earnings of $1.79 in the second quarter were above analysts\u2019 average estimate of $1.78 per share, according to LSEG data.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Sun Life works with U.S. states to administer Medicaid and Medicare Advantage dental…\n","protected":false},"author":2,"featured_media":55371,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[901,888,902,879,877,903,45,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-55370","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-business","tag-ca","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/55370","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=55370"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/55370\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/55371"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=55370"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=55370"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=55370"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}