MOLINA HEALTHCARE INC
For the period ended Mar 31, 2025. Filed Apr 24, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Apr 24, 2025
MOH$208.99-3.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-10-24.
0001179929-24-000151
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-04-24.
0001179929-25-000070
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 189 previous paragraphs and 168 current paragraphs.
95 unchanged; 53 reworded; 20 added; 39 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 5 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
•the implementation in 2025 of Medicaid rate adjustments and updates that are not commensurate with the current medical cost trends in our states and the health acuity levels of our members;
Current report
•federal or state legislative or regulatory changes to the Medicaid, Medicare, or Marketplace programs, including potential reductions in Medicaid funding, changes to the federal matching percentage paid to states for either the Medicaid expansion or general population, block grants or per capita caps, work requirements, the reduction or elimination of provider taxes, the non-renewal of Marketplace subsidies, or the implementation of new program integrity rules, insufficient Medicare Advantage rate adjustments, or amendments of the Affordable Care Act (“ACA”);
Current report
•our ability to integrate our acquisitions and realize benefits as projected;
Current report
•risks associated with vaccine hesitancy and the potential for a new epidemic or pandemic, including risks presented by the H5N1 bird flu or the measles;
Current report
FIRST QUARTER 2025 HIGHLIGHTS
Current report
•Membership of 5.8 million at March 31, 2025 increased 25,000, or 0.4%, compared with March 31, 2024, primarily due to the growth in the Marketplace segment, including as a result of the ConnectiCare acquisition, partially offset by the impact of Medicaid redeterminations;
Current report
•Consolidated medical care ratio (“MCR”) of 89.2% compared with 88.5% for the first quarter of 2024, mainly reflecting expected higher medical benefits utilization in our Medicaid segment and a higher than expected MCR in our Marketplace segment, due to certain prior period items, and a higher initial MCR related to the ConnectiCare acquisition;
Current report
Net income in the first quarter of 2025 amounted to $298 million, or $5.45 per diluted share, compared with $301 million, or $5.17 per diluted share, in the first quarter of 2024. Operating income increased to $433 million in the first quarter of 2025, compared with $426 million in the first quarter of 2024.
Current report
The change in operating income was mainly due to the impact of higher MCRs in our Medicaid and Marketplace, including the expected higher initial MCR related to new contracts, recent acquisitions and organic growth, partially offset by the impact of increased premium revenue.
Current report
The consolidated MCR was 89.2% in the first quarter of 2025, and 88.5% in the first quarter of 2024. The results mainly reflect expected higher medical benefit utilization in our Medicaid segment, partially offset by rate increases, and a higher than expected MCR in our Marketplace segment, due to certain prior period items, and a higher initial MCR related to the ConnectiCare acquisition. These increases were partially offset by continued strong medical cost management. See further discussion in “Reportable Segments—Segment Financial Performance,” below.
Current report
Investment income was $108 million in the first quarter of 2025, which was consistent with the first quarter of 2024.
Current report
Depreciation and amortization was $48 million in the first quarter of 2025, compared with $45 million in the first quarter of 2024. The increase is due to impacts from the ConnectiCare acquisition.
Current report
Nevada Procurement—Medicaid. In March 2025, the Nevada Department of Health and Human Services Division of Health Care Policy and Financing (“DHCPF”) released notice of intent to award Medicaid and Children’s Health Insurance Program managed care contracts to our Nevada health plan. The new contract will cover Urban Clark, Urban Washoe, and Rural service areas. The new contract is expected to begin on January 1, 2026, and is expected to run through December 31, 2030, with one two-year extension.
Current report
Illinois Procurement—Medicare. In March 2025, the Illinois Department of Healthcare and Family Services awarded a contract to provide a Fully Integrated Dual Eligible Special Needs Plan (“D-SNP”) to our Illinois health plan. This contract will replace the State’s Medicare-Medicaid Alignment Initiative demonstration program. The go-live date for the new contract is expected to be January 1, 2026. The contract is expected to have an initial term of four years, with the option to extend the contract from the initial term so long as the total contract term does not exceed ten years.
Current report
Medicaid premium revenue increased $638 million, or 9%, in the first quarter of 2025, when compared with the first quarter of 2024. The increase was mainly due to revenue tied to the new contract win in New Mexico, which commenced in July 2024, expansions in Texas, which commenced in September 2024, and certain rate actions, which were partially offset by the impact of Medicaid redetermination. Also contributing to the overall premium revenue increase is a lower impact of minimum MLRs and medical cost corridors in the first quarter of 2025, when compared with the first quarter of 2024.
Current report
The Medicaid MCR increased to 90.3% in the first quarter of 2025, from 89.7% in the first quarter of 2024, or 60 basis points, which was in line with our expectations. The increase was mainly attributable to the continued impact of higher utilization among our continuing population from the second half of 2024 that has continued into 2025, including LTSS benefits, high-cost drugs, and behavioral health services and seasonal illnesses, partially offset by rate increases.
Current report
Medicare premium revenue increased $26 million, or 2%, in the first quarter of 2025 when compared to the first quarter of 2024. The increase primarily reflects membership growth associated with the ConnectiCare acquisition, partially offset by the impact of our exit from MAPD in thirteen states in 2025.
Current report
The Medicare MCR of 88.3% in the first quarter of 2025 was 40 basis points lower than the first quarter of 2024 and in line with our expectations, resulting from product pricing and benefit adjustments implemented for 2025, and the exit from MAPD in thirteen states.
Current report
The Marketplace MCR increased to 81.7% in the first quarter of 2025, from 73.3% in the first quarter of 2024. The MCR reflects our product pricing strategy to achieve growth, and approximately 400 basis points related to unfavorable changes in estimate for 2024 risk adjustment, retrospective member reconciliation adjustments and the impact of higher initial MCRs related to the ConnectiCare acquisition. Excluding the prior year adjustments and ConnectiCare MCR impact, the Marketplace MCR was in line with the Company’s expectations.
Current report
Acquisitions. We have a disciplined and steady approach to growth. Organic growth, which includes leveraging our existing health plan portfolio and winning new territories, is our highest priority. In addition to organic growth, we will consider targeted acquisitions that are a strategic fit that we believe will leverage operational synergies, and lead to incremental earnings accretion.
Removed paragraphs (39)
Previous report
•the continuing impact of Medicaid redeterminations, including the health acuity levels of our continuing members, and the actuarially sound adjustment of rates with regard to the members we retain;
Previous report
•our ability to integrate, and realize benefits from acquisitions, including the completed acquisitions of My Choice Wisconsin, and Bright Health Medicare, and the timely closing of the announced acquisition of ConnectiCare;
Previous report
•our ability to operate profitably in an environment where the trend in premium rate increases lags behind the trend in increasing medical costs;
Previous report
•efforts by states to recoup previously paid and recognized premium amounts;
Previous report
•changes in funding under our contracts as a result of regulatory changes, programmatic adjustments, or other reforms;
Previous report
THIRD QUARTER 2024 HIGHLIGHTS
Previous report
•Membership of 5.6 million at September 30, 2024 increased 392,000, or 8%, compared with September 30, 2023, across all segments, primarily due to the new Medicaid contract wins, acquisitions, and growth in our current footprint, partially offset by the impact of Medicaid redeterminations;
Previous report
•Consolidated medical care ratio (“MCR”) of 89.2% compared with 88.7% for the third quarter of 2023, and was higher than expected as we experienced medical cost pressure in our Medicaid and Medicare segments;
Previous report
•Investment income of $118 million, which increased 5% compared with the third quarter of 2023, and continues to bolster our operating income results;
Previous report
Net income in the third quarter of 2024 amounted to $326 million, or $5.65 per diluted share, compared with $245 million, or $4.21 per diluted share, in the third quarter of 2023. Net income in the nine months ended September 30, 2024 amounted to $928 million, or $15.97 per diluted share, compared with $875 million, or $15.08 per diluted share, in the nine months ended September 30, 2023. The increase in net income for both periods is driven by the impact of increased premiums and medical margin stemming from our membership growth, improved G&A expense ratio, and increased investment income, partially offset by an increase in the consolidated MCR. In addition, the three and nine months ended September 30, 2023 results reflect a $41 million credit loss on 2022 Marketplace risk adjustment receivables.
Previous report
The consolidated MCR in the third quarter of 2024 increased to 89.2%, compared with 88.7% in the third quarter of 2023, or 50 basis points, and was higher than expected as we experienced medical cost pressure in our Medicaid and Medicare segments. The consolidated MCR in the nine months ended September 30, 2024 increased to 88.8%, compared with 87.8% MCR for the nine months ended September 30, 2023, or 100 basis points, and was slightly above our long-term range. The year-over-year increase in both periods is driven mainly by our Medicaid segment, reflecting the higher than expected medical cost pressure in our legacy portfolio, and higher initial MCRs related to new contracts, expansion and the MyChoice acquisition, partially offset by minimum MLRs and medical cost corridors, continued disciplined medical cost management and year-over-year improvement in our Medicaid and Marketplace segments. See further discussion in “Reportable Segments—Segment Financial Performance,” below.
Previous report
Investment income increased to $118 million in the third quarter of 2024, compared with $112 million in the third quarter of 2023, and increased to $341 million in the nine months ended September 30, 2024, compared with $280 million in the nine months ended September 30, 2023. The increase in both periods was primarily driven by higher average yields on the investment portfolio.
Previous report
Depreciation and amortization was $47 million in the third quarter of 2024, compared with $42 million in the third quarter of 2023, and was $138 million in the nine months ended September 30, 2024, compared with $128 million in the nine months ended September 30, 2023. The increase in both periods is due to the closing of the My Choice Wisconsin and Bright Health Medicare acquisitions.
Previous report
REGULATORY DEVELOPMENTS AND RELATED TRENDS
Previous report
Federal Economic Stabilization and Other Programs
Previous report
The Public Health Emergency (“PHE”) officially ended on May 11, 2023. There are several healthcare programs tied to the PHE which are impacted by this change in policy. These include coverage of COVID-19 testing and vaccines, changes to the Medicare fee schedule for COVID-related treatments, and free coverage of at-home COVID-19 diagnostic tests. Per federal statutory and regulatory requirements, some of these programs concluded with the end of the PHE, while some will continue through 2024, and some will remain in place permanently.
Previous report
Operations
Previous report
Enrollment and Premium Revenue
Previous report
Excluding acquisitions and our exit from Puerto Rico, we estimate we added approximately one million new Medicaid members since March 31, 2020, when we first began to report on the impacts of the pandemic. We believe this membership increase was mainly due to the suspension of redeterminations for Medicaid eligibility. The Consolidated Appropriations Act of 2023 authorized states to resume redeterminations and terminate coverage for ineligible enrollees starting on April 1, 2023, irrespective of the status of the PHE. Consequently, during the third quarter of 2023, all states in which we operate had begun disenrolling members. In the third quarter of 2024, we estimate we lost approximately 50,000 members due to the net effect of redeterminations. This was on track with our expectations and brings the total count of members lost through redeterminations to 700,000, and we expect reconnects will continue, resulting in net membership additions of 50,000 in the fourth quarter of 2024. Although the medical cost profile of members who have been disenrolled is more favorable than the Medicaid segment average, when combined with the beneficial impact of corridor offsets and rates in several states, our Medicaid MCR for the nine months ended September 30, 2024 was in line with our expectations. Based on the experience to date, we expect that we will ultimately retain approximately 35%of the membership gained since March 31, 2020.
Previous report
Michigan Procurement—Medicare. In October 2024, we were awarded a contract to provide benefits to the state’s Highly Integrated Dual Eligible (“HIDE”) Special Needs population in six service regions. This award facilitates the transition of our existing Medicaid-Medicare Plan (“MMP”) members to a HIDE product and ensures a new dual-eligibles growth opportunity by expanding our footprint from two regions to six, including Detroit. The new contract, which is expected to commence on January 1, 2026 in select regions, will be implemented statewide in 2027 and is expected to continue for seven years.
Previous report
Massachusetts Procurement—Medicare. In September 2024, we were selected to proceed to contract negotiations to operate both One Care and Senior Care Options plans for 2026. This selection is expected to allow us to operate the One Care 21-64 program, and to retain our position in the Senior Care Options program. The programs provide physical, behavioral, long-term services and supports, and other community services to dual-eligibles. The new contract is expected to commence on January 1, 2026.
Previous report
New Mexico Procurement—Medicaid. Our new contract with the New Mexico Health Care Authority commenced on July 1, 2024 and will run through December 31, 2026. The new contract added approximately 33,000 members.
Previous report
Michigan Procurement—Medicaid. In April 2024, we announced that the Michigan Department of Health and Human Services intends to award a Comprehensive Health Care Program contract to Molina Healthcare of Michigan. We were awarded the contract in six service regions. The new Medicaid contract commenced on October 1, 2024. The new contract is expected to have a duration of five years, with an option for three one-year extensions.
Previous report
Mississippi Procurement—Medicaid. In the second quarter of 2024, the Mississippi Division of Medicaid extended the existing contracts for the state fiscal year that began on July 1, 2024. We now expect the new four-year contract, which will cover both TANF & ABD and CHIP, to commence on July 1, 2025.
Previous report
Texas Procurement—Medicaid. In the first quarter of 2024, we were notified of the Texas Health and Human Services Commission’s intent to award us a contract for Temporary Assistance for Needy Families (“TANF”) and Children’s Health Insurance Program (“CHIP”) (known in Texas as the STAR & CHIP programs, and both existing contracts for Molina), expanding our footprint and expecting to grow our market share. The expected start of operations and other final contract terms are still pending. The new STAR+PLUS contract began on September 1, 2024 and grew our market share.
Previous report
California Acquisition—Medicare. Effective January 1, 2024, we closed on our acquisition of 100% of the issued and outstanding capital stock of Brand New Day and Central Health Plan of California (“Bright Health Medicare”), which added approximately 109,000 members.
Previous report
California Procurement—Medicaid. Our new contract with the California Department of Health Care Services commenced on January 1, 2024, which enables us to continue servicing Medi-Cal members in most of our existing counties and expand our footprint in Los Angeles County.
Previous report
Nebraska Procurement—Medicaid. Our new contract with the Nebraska Department of Health and Human Services commenced on January 1, 2024, which added approximately 114,000 members.
Previous report
Change Healthcare Cybersecurity Incident
Previous report
On February 21, 2024, Change Healthcare (“CHC”), a major claims processing vendor to Molina, experienced a significant cybersecurity incident. Immediately upon becoming aware of the incident, Molina disconnected and isolated its systems from CHC, and confirmed that no Molina owned or operated systems were compromised by any pre-incident interaction or connectivity with CHC. As a result of the disconnection of our systems from CHC, Molina’s ability to receive claims submissions and process remits and payments to providers was partially and temporarily impaired. We promptly enacted our incident response and business continuity plans, which included the implementation of alternative, work-around solutions in order to resume electronic claims intake and payment to providers, and, as a result, we experienced minimal impact to our claims payment operations. To date the event has not had a material impact on the Company’s financial condition or results of operations. We have implemented enhanced vendor-related security protocols to mitigate potential risks to providers and members related to this incident.
Previous report
UnitedHealth Group Incorporated, the parent company to CHC, has indicated a substantial portion of U.S. residents may have had their PHI/PII affected by the incident. CHC has notified Molina that certain members’ data has been breached. CHC is in the process of notifying the individuals impacted by this data breach.
Previous report
For a discussion of additional segment trends, uncertainties and other developments, refer to our 2023 Annual Report on Form 10-K, “Item 1. Business—Our Business,” and “—Legislative and Political Environment.”
Previous report
SEGMENT MEMBERSHIP
Previous report
Medicaid premium revenue increased $957 million, or 14%, in the third quarter of 2024, when compared with the third quarter of 2023. Medicaid premium revenue increased $3.0 billion, or 15%, in the nine months ended September 30, 2024, when compared with the nine months ended September 30, 2023. The higher premium revenue reflects new contract wins in Iowa (commenced in July 2023), Nebraska (commenced in January 2024), and New Mexico (commenced in July 2024), expansions in California and Texas that commenced in January 2024, and September 2024, respectively, and the My Choice acquisition that closed in September 2023. These increases were partially offset by the impact of Medicaid redeterminations.
Previous report
The Medicaid MCR increased 170 basis points to 90.5% in the third quarter of 2024, from 88.8% in the third quarter of 2023, and increased 180 basis points to 90.3% in the nine months ended September 30, 2024, from 88.5% in the nine months ended September 30, 2023. The increase for both periods was mainly attributable to higher than expected medical costs in our legacy portfolio from the continued impact of redetermination-related acuity shifts and higher utilization among our continuing population, particularly for LTSS, pharmacy, and behavioral health services. The increase is also driven by the higher initial MCR associated with the start of new contracts, the My Choice acquisition, and a short-term disparity in timing between premium rates and medical trend. Additionally, the MCR in the third quarter included a 50 basis point impact from a premium rate reduction retroactive to January 1, 2024 in our California business. For the nine months ended September 30, 2024, the MCR was impacted by 40 basis points from retroactive premium rate reductions in our California business, including the intra-year adjustment mentioned above and the prior year adjustment recognized in the second quarter of 2024. The increases in both periods were partially offset by minimum MLR and medical cost corridors, on-cycle and off-cycle rate adjustments that went into effect in several states during the quarter, and medical cost management. Excluding new contracts and the recent acquisition, our legacy Medicaid MCR in 2024 is above our long-term target range.
Previous report
Medicare premium revenue increased $335 million, or 32%, in the third quarter of 2024 compared to the third quarter of 2023, and increased $1,128 million, or 36%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increases were primarily due to the Bright Health Medicare acquisition that closed on January 1, 2024, the impact of MAPD and D-SNP membership expansion and organic membership growth in existing states, and increased premiums that are more commensurate with the acuity of our population.
Previous report
The Medicare MCR decreased to 89.6% in the third quarter of 2024, or 280 basis points, compared to the third quarter of 2023, and decreased to 87.7% in the nine months ended September 30, 2024, or 210 basis points, compared to the nine months ended September 30, 2023. The decreases in each period were primarily driven by higher risk adjustment premiums that are more commensurate with the acuity of our membership, pricing and benefit design changes implemented in 2024 and operational improvements, partially offset by elevated LTSS and pharmacy costs and higher outpatient utilization. The Medicare MCR for the third quarter of 2024 is slightly above our long-term target range due to elevated LTSS and pharmacy costs and higher outpatient utilization.
Previous report
The Marketplace MCR decreased to 73.0% in the third quarter of 2024, or 590 basis points, compared to 78.9% in the third quarter of 2023, and decreased to 72.6% in the nine months ended September 30, 2024, or 120 basis points, compared to 73.8% in the nine months ended September 30, 2023. The changes in both periods reflect our product and pricing strategy to achieve growth, changes in membership mix, risk adjustment premiums that are more commensurate with the acuity of our membership, and continued operational improvements. Silver metal tier products incur less MCR seasonality than bronze metal tier products due to lower deductibles. The Marketplace MCR for the nine months ended September 30, 2024 is performing better than our expectations.
Previous report
Regulatory Developments. Excluding acquisitions and our exit from Puerto Rico, we estimate we added approximately one million new Medicaid members since March 31, 2020, when we first began to report on the impacts of the pandemic. We believe this membership increase was mainly due to the suspension of redeterminations for Medicaid eligibility. The Consolidated Appropriations Act of 2023 authorized states to resume redeterminations and terminate coverage for ineligible enrollees starting on April 1, 2023, irrespective of the status of the PHE. Consequently, during the third quarter of 2023, all states in which we operate had begun disenrolling members. In the third quarter of 2024, we estimate we lost approximately 50,000 members due to the net effect of redeterminations. This was on track with our expectations and brings the total count of members lost through redeterminations to 700,000, and we expect reconnects will continue, resulting in net membership additions of 50,000 in the fourth quarter of 2024. Although the medical cost profile of members who have been disenrolled is more favorable than the Medicaid segment average, when combined with the beneficial impact of corridor offsets and rates in several states, our Medicaid MCR for the nine months ended September 30, 2024 was in line with our expectations. Based on the experience to date, we expect that we will ultimately retain approximately 35%of the membership gained since March 31, 2020.
Reworded paragraphs (53)
Previous wording
•the constantly evolving market dynamics surrounding the Affordable Care Act (“ACA”) Marketplaces, including issues impacting enrollment, special enrollment periods, member choice, premium subsidies, risk adjustment estimates and results, Marketplace plan insolvencies or receiverships, and the potential for disproportionate enrollment of higher acuity members;
Current wording
•evolving Marketplace dynamics including issues impacting enrollment, special enrollment periods, member choice, premium subsidies, risk adjustment estimates and results, Marketplace plan insolvencies or receiverships, and the potential for disproportionate enrollment of higher acuity members;
Previous wording
•the success of our efforts to retain existing or awarded government contracts, the success of our bid submissions in response to requests for proposal, and our ability to identify merger and acquisition targets to support our continued growth over time;
Current wording
•the success of our efforts to retain existing or awarded government contracts, the success of our bid submissions in response to requests for proposal, and our ability to identify merger and acquisition targets to support our continued growth over time at projected levels;
Previous wording
•the success of the scaling up of our operations in new states in connection with request for proposal (“RFP”) wins, and the satisfaction of all readiness review requirements under the new Medicaid contracts;
Current wording
•the success of the scaling up of our operations in new states in connection with request for proposal wins, and the satisfaction of all readiness review requirements under the new Medicaid contracts;
Previous wording
•cyber-attacks, ransomware attacks, or other privacy or data security incidents involving either ourselves or our contracted vendors, such as Change Healthcare or CrowdStrike, that result in an inadvertent unauthorized disclosure of protected information or operational delays, and the extent to which our working in a remote work environment heightens our exposure to these risks;
Current wording
•cyber-attacks, ransomware attacks, or other privacy or data security incidents involving either ourselves or our contracted vendors, that result in an inadvertent unauthorized disclosure of protected information or operational delays;
Previous wording
•the impact of our working in a permanent remote work environment, including any associated impairment charges or contract termination costs;
Current wording
•the impact of our working in a remote work environment;
Previous wording
•the interpretation and implementation of federal or state medical cost expenditure floors, administrative cost and profit ceilings, premium stabilization programs, profit-sharing arrangements, and risk adjustment provisions and requirements;
Current wording
•the interpretation, implementation, and estimates of amounts owed for federal or state medical cost expenditure floors, administrative cost and profit ceilings, premium stabilization programs, profit-sharing arrangements, and risk adjustment provisions and requirements;
Previous wording
•the transition of Medicare-Medicaid pilot programs in California, Illinois, Michigan, Ohio, South Carolina, and Texas serving those dually eligible for both Medicare and Medicaid, the increasing integration of Medicare and Medicaid programmatic and compliance requirements, and the extension or incorporation of federal Medicare requirements developed by CMS into state-administered Medicaid programs;
Current wording
•the transition of Medicare-Medicaid pilot programs in California, Illinois, Michigan, Ohio, South Carolina, and Texas serving those dually eligible for both Medicare and Medicaid, the increasing integration of Medicare and Medicaid programmatic and compliance requirements, and the extension or incorporation of federal Medicare requirements developed by the Centers for Medicare and Medicaid Services (“CMS”) into state-administered Medicaid programs;
Previous wording
•the success of our providers, including delegated providers, the adequacy of our provider networks, the successful maintenance of relations with our providers, and the potential loss of providers;
Current wording
•the success of our providers, including delegated providers, the adequacy of our provider networks, the successful maintenance of relations with our providers, and potential medical or pharmaceutical supply shortfalls suffered by our providers incidental to the implementation of tariffs;
Previous wording
•the greater scale and revenues of our health plans in California, New York, Ohio, Texas, and Washington, and risks related to the concentration of our business in those states;
Current wording
•the greater scale and revenues of our health plans in California, New York, Texas, and Washington, and risks related to the concentration of our business in those states;
Previous wording
•the failure to comply with the financial or other covenants in the credit agreement governing our revolving credit facility or the indentures governing our outstanding senior notes;
Current wording
•the failure to comply with the financial or other covenants in the Amended Credit Agreement (as defined below) or the indentures governing our outstanding senior notes;
Previous wording
•the availability of adequate financing on acceptable terms to fund and capitalize our expansion and growth, repay our outstanding indebtedness at maturity, and meet our general liquidity needs;
Current wording
•the availability of adequate financing on acceptable terms to fund and capitalize our expansion and growth, and meet our general liquidity needs;
Previous wording
Molina Healthcare, Inc., a FORTUNE 500 company, provides managed healthcare services under the Medicaid and Medicare programs, and through the state insurance marketplaces (the “Marketplace”). We served approximately 5.6 million members as of September 30, 2024, located across 21 states.
Current wording
Molina Healthcare, Inc., a FORTUNE 500 company, provides managed healthcare services under the Medicaid and Medicare programs, and through the state insurance marketplaces (the “Marketplace”). We served approximately 5.8 million members as of March 31, 2025, located across 22 states.
Previous wording
We reported net income of $326 million, or $5.65 per diluted share, for the third quarter of 2024, which reflected the following:
Current wording
We reported net income of $298 million, or $5.45 per diluted share, for the first quarter of 2025, which reflected the following:
Previous wording
•Premium revenue of $9.7 billion, which increased 18% compared with the third quarter of 2023 due to the increased membership in all segments mentioned above;
Current wording
•Premium revenue of $10.6 billion, which increased 12% compared with the first quarter of 2024 due to the premium growth in the Medicaid and Marketplace segments;
Previous wording
•General and administrative expense (“G&A”) ratio of 6.5%, compared with 7.1% for the third quarter of 2023, reflecting operating discipline and the continued benefit of fixed cost leverage as we grow our business; and
Current wording
•General and administrative expense (“G&A”) ratio of 6.9%, compared with 7.2% for the first quarter of 2024, reflecting operating discipline and the continued benefit of fixed cost leverage as we grow our business; and
Previous wording
•After-tax margin of 3.2%, which was in line with our expectations.
Current wording
•After-tax margin of 2.7%, which was in line with our expectations.
Previous wording
Premium revenue increased $1.5 billion, or 18%, in the third quarter of 2024, when compared with the third quarter of 2023, and increased $4.5 billion, or 19%, in the nine months ended September 30, 2024, when compared with the nine months ended September 30, 2023. The higher premium revenue reflects the impact of a balanced combination of the new Medicaid contract wins, acquisitions, and growth in our current footprint, partially offset by the impact of Medicaid redeterminations. See further discussion in “Reportable Segments—Segment Financial Performance,” below.
Current wording
Premium revenue increased $1,124 million, or 12%, in the first quarter of 2025, when compared with the first quarter of 2024. The higher premium revenue is due to premium growth in the Medicaid and Marketplace segments, reflecting the impact of a balanced combination of the new Medicaid contract wins, rate increases, organic growth, and the ConnectiCare acquisition, partially offset by the impact of Medicaid redeterminations. See further discussion in “Reportable Segments—Segment Financial Performance,” below.
Previous wording
The prior year reserve development in the nine months ended September 30, 2024 was favorable, but its impact on earnings has been mostly absorbed by minimum MLRs and medical cost corridors.
Current wording
The impact of prior year reserve development in the first quarter of 2025 was not significant, and its impact on earnings was mostly absorbed by minimum MLRs and medical cost corridors.
Previous wording
The premium tax ratio (premium tax expense as a percentage of premium revenue plus premium tax revenue) was 5.0% and 2.1% for the third quarter of 2024 and 2023, respectively, and 3.7% and 2.1% for the nine months ended September 30, 2024 and 2023, respectively. The current year ratio increases were mainly due to the reinstatement of the California managed care organization tax by the state’s Department of Health Care Services in the fourth quarter of 2023 and changes in business mix.
Current wording
The premium tax ratio (premium tax expense as a percentage of premium revenue plus premium tax revenue) was 3.5% and 3.0% for the first quarter of 2025 and 2024, respectively. The current year ratio increase was mainly due to changes in business mix.
Previous wording
Other revenue was consistent at $20 million in the third quarter of 2024 and 2023, and totaled $63 million in the nine months ended September 30, 2024, compared with $60 million in the nine months ended September 30, 2023. Other revenue mainly includes service revenue associated with long-term services and supports consultative services we provide in Wisconsin.
Current wording
Other revenue amounted to $23 million in the first quarter of 2025, compared with $22 million in the first quarter of 2024. Other revenue mainly includes service revenue associated with long-term services and supports consultative services we provide in Wisconsin.
Previous wording
The G&A expense ratio was 6.5% in the third quarter of 2024, compared with 7.1% in the third quarter of 2023. The G&A expense ratio was 6.9% in the nine months ended September 30, 2024, compared with 7.3% in the nine months ended September 30, 2023. G&A expenses in the nine months ended September 30, 2024 reflect operating discipline, including labor cost management, one-time credits related to certain vendor contracts, and the continued benefit of fixed cost leverage as we grow our business, partially offset by new business implementation costs associated with the Nebraska and California Medicaid contracts wins that started in January 2024 and the New Mexico Medicaid contract that started on July 1, 2024.
Current wording
The G&A expense ratio was 6.9% in the first quarter of 2025, compared with 7.2% in the first quarter of 2024. The G&A ratio reflects the continued benefit of fixed cost leverage as we grow our business, and operating discipline, partially offset by new business implementation costs associated with the start of new contracts.
Previous wording
Other operating expenses decreased by $58 million in the third quarter of 2024, compared with the third quarter of 2023, and decreased by $10 million in the nine months ended September 30, 2024, compared with the nine months ended September 30, 2023. The decrease in both periods is primarily due to the $41 million credit loss on 2022 Marketplace risk adjustment receivables recorded in the third quarter of 2023. This was partially offset by increases in non-recurring costs associated with acquisitions, and costs for litigation dating back to 2013. Other operating expenses also include service costs associated with long-term services and supports consultative services we provide in Wisconsin, as noted above.
Current wording
Other operating expenses totaled $25 million in the first quarter of 2025 compared to $38 million in the first quarter of 2024, and the decrease compared with the first quarter of 2024 reflects certain non-recurring costs associated with acquisitions, and costs for litigation incurred in 2024. Other operating expenses also include service costs associated with long-term services and supports consultative services we provide in Wisconsin, as noted above.
Previous wording
Interest expense was $29 million and $27 million in the third quarter of 2024 and 2023, respectively, and $84 million and $82 million for the nine months ended September 30, 2024 and 2023, respectively. The increase is due to borrowings under the Credit Facility occurring in the third quarter of 2024.
Current wording
Interest expense totaled $43 million in the first quarter of 2025 and was $27 million in the first quarter of 2024. The increase is due to borrowings under the Credit Facility (as defined below), the $500 million Term Loan issuance occurring in the first quarter of 2025 (as defined below), and the $750 million 6.250% Notes due 2033 that were issued in November 2024.
Previous wording
Income tax expense amounted to $112 million in the third quarter of 2024, or 25.7% of pretax income, compared with income tax expense of $87 million, or 26.3% of pretax income, in the third quarter of 2023. Income tax expense amounted to $315 million in the nine months ended September 30, 2024, or 25.3% of pretax income, compared with income tax expense of $300 million, or 25.5% of pretax income, in the nine months ended September 30, 2023. The difference in the effective tax rate is due to a decrease in nondeductible expenses, net of an increase in state income taxes, and differences in discrete tax benefits recognized in the respective periods.
Current wording
Income tax expense amounted to $92 million in the first quarter of 2025, or 23.7% of pretax income, compared with income tax expense of $98 million, or 24.5% of pretax income in the first quarter of 2024. The difference in the effective tax rate is due to an increase in tax benefits related to transferable federal tax credits, a decrease in state and local income taxes, and differences in discrete tax benefits recognized in the respective periods.
Previous wording
Virginia Procurement—Medicaid. In the first quarter of 2024, the Virginia Department of Medical Assistance Services (“DMAS”) issued a notice of intent to award which did not include Molina Healthcare of Virginia as an awardee for its Cardinal Care Managed Care (“CCMC”) procurement. We exercised our right to protest that decision. On April 19, 2024, DMAS upheld its notice of intent to award in response to our protest. On April 26, 2024, Molina filed a legal action in Virginia Circuit Court over DMAS’s decision not to award Molina a CCMC contract. In addition, DMAS separately notified us that they were exercising the contractual extension option for the period from July 1, 2024 through June 30, 2025. The noticed CCMC awards are subject to a statutory stay pending the resolution of Molina’s legal action.
Current wording
Virginia Procurement—Medicaid. In April 2024, the Virginia Department of Medical Assistance Services (“DMAS”) issued a notice of intent to award which did not include our Virginia health plan as an awardee for its Cardinal Care Managed Care (“CCMC”) 2.0 procurement. We exercised our right to protest that decision. On April 19, 2024, DMAS upheld its notice of intent to award in response to our protest. On April 26, 2024, Molina filed a legal action in Virginia Circuit Court over DMAS’s decision not to award Molina a CCMC 2.0 contract. The state court action continues, with trial set for September 2-8, 2025. In addition, on April 1, 2025, DMAS notified us that, effective June 30, 2025, it was exercising its right to terminate Molina’s present CCMC contract and Molina’s associated Dual Eligible Special Needs contract, and that DMAS would transition Molina’s members to new plans effective July 1, 2025.
Previous wording
Connecticut Acquisition—Marketplace and Medicare. On July 23, 2024, we announced a definitive agreement to acquire ConnectiCare Holding Company, Inc. (“ConnectiCare”), a wholly owned subsidiary of EmblemHealth, Inc. ConnectiCare is a leading health plan in the state of Connecticut serving members across Marketplace, Medicare, and certain commercial products. The purchase price for the transaction is approximately $350 million, which we intend to fund with cash on hand. The transaction is subject to applicable federal and state regulatory approvals and the satisfaction of other customary closing conditions. We currently expect the transaction to close in the first quarter of 2025.
Current wording
Connecticut Acquisition—Marketplace and Medicare. Effective February 1, 2025, we closed on our acquisition of ConnectiCare Holding Company, Inc. (“ConnectiCare”), a wholly owned subsidiary of EmblemHealth, Inc. ConnectiCare is a leading health plan in the state of Connecticut serving approximately 140,000 members across Marketplace, Medicare, and certain commercial products. The purchase price for the transaction was $350 million.
Previous wording
Florida Procurement—Medicaid. In July 2024, we were notified that the Florida Agency for Healthcare Administration awarded a Medicaid managed care contract to Molina Healthcare of Florida. The contract term is expected to commence on February 1, 2025, and to run through December 31, 2030. We expect to serve approximately 90,000 Medicaid beneficiaries in Miami-Dade and Monroe Counties.
Current wording
Florida Procurement—Medicaid. In July 2024, we were notified that the Florida Agency for Healthcare Administration awarded a Medicaid managed care contract to our Florida health plan. The contract commenced on February 1, 2025 and will run through December 31, 2030. We expect to serve approximately 90,000 Medicaid beneficiaries in Miami-Dade County.
Previous wording
Wisconsin Procurement—Medicaid. In May 2024, we were notified that the Wisconsin Department of Health Services intends to make an award for the purchase of services under the Family Care and Family Care Partnership program in its Geographic Service Region 5 to Molina Healthcare of Wisconsin. The go-live date is expected to be January 1, 2025, and the contract is expected to have a duration of two years, with an option for three two-year extensions. Additionally, we were re-awarded our sole contract position in the self-directed long-term services and supports personal care program.
Current wording
Wisconsin Procurement—Medicaid. In May 2024, the Wisconsin Department of Health Services awarded a contract to provide services under the Family Care and Family Care Partnership program in its Geographic Service Region 5 to our Wisconsin health plan. The contract commenced on January 1, 2025, and is expected to have a duration of two years, with an option for three two-year extensions. Additionally, we were re-awarded our sole contract position in the self-directed long-term services and supports personal care program.
Previous wording
As of September 30, 2024, we served approximately 5.6 million members eligible for Medicaid, Medicare, and other government-sponsored healthcare programs for low-income families and individuals, including Marketplace members, most of whom receive government premium subsidies.
Current wording
As of March 31, 2025, we served approximately 5.8 million members eligible for Medicaid, Medicare, and other government-sponsored healthcare programs for low-income families and individuals, including Marketplace members, most of whom receive government premium subsidies.
Previous wording
We currently have four reportable segments consisting of: 1) Medicaid; 2) Medicare; 3) Marketplace; and 4) Other.
Current wording
We currently have reportable segments consisting of: 1) Medicaid; 2) Medicare; 3) Marketplace; and 4) Other.
Previous wording
The Medicaid, Medicare, and Marketplace segments represent the government-funded or sponsored programs under which we offer managed healthcare services. The Other segment, which is insignificant to our consolidated results of operations, includes long-term services and supports consultative services in Wisconsin.
Current wording
The Medicaid, Medicare, and Marketplace segments represent the government-funded or sponsored programs under which we offer managed healthcare services. The Other segment, which is insignificant to our consolidated results of operations, includes long-term services and supports consultative services in Wisconsin and the commercial portion of the business acquired in connection with the ConnectiCare transaction that closed effective February 1, 2025.
Previous wording
The key metrics used to assess the performance of our Medicaid, Medicare, and Marketplace segments are premium revenue, medical margin and medical care ratio (“MCR”). MCR represents the amount of medical care costs as a percentage of premium revenue. Therefore, the underlying medical margin, or the amount earned by the Medicaid, Medicare, and Marketplace segments after medical costs are deducted from premium revenue, represents the most important measure of earnings reviewed by management, and is used by our chief executive officer to review results, assess performance, and allocate resources. The key metric used to assess the performance of our Other segment is service margin. The service margin is equal to service revenue minus cost of service revenue.
Current wording
The key metrics used to assess the performance of our segments are revenue, margin and medical care ratio (“MCR”). MCR represents the amount of medical care costs as a percentage of premium revenue. Therefore, the underlying margin, or the amount earned by the segments after medical or service costs are deducted from revenue, represents the most important measure of earnings reviewed by management, and is used by our chief executive officer, who is our chief operating decision maker, to review results, assess performance, and allocate resources. Such oversight and decision making includes, among others, pricing, approving capital expenditures, and identifying growth opportunities. We do not report total assets by segment since this is not a metric used to assess segment performance or allocate resources.
Previous wording
The following table sets forth our membership by segment as of the dates indicated:
Current wording
The following table summarizes our membership by segment as of the dates indicated:
Previous wording
The following tables summarize premium revenue, medical margin, and MCR by segment for the periods indicated (dollars in millions):
Current wording
The following table summarizes premium revenue, medical margin, and MCR by segment for the periods indicated (dollars in millions):
Previous wording
The medical margin in our Medicaid program decreased $22 million, or 3%, in the third quarter of 2024 when compared with the third quarter of 2023, and decreased $54 million, or 2%, in the nine months ended September 30, 2024 when compared with the nine months ended September 30, 2023. The decrease in both periods was driven by an increase in the MCR, as discussed below, partially offset by the impact of increased premium revenues and margin associated with the membership growth discussed above.
Current wording
The medical margin in our Medicaid program increased $16 million, or 2%, in the first quarter of 2025 when compared with the first quarter of 2024. The improvement was driven by the increased premium revenues discussed above, partially offset by an increase in the MCR, as described below.
Previous wording
The medical margin for Medicare increased $64 million in the third quarter of 2024, and increased $205 million in the nine months ended September 30, 2024, when compared to the same periods in 2023. The increase in both periods was mainly due to the year-over-year growth in membership and premium revenues combined with the decrease in MCR discussed below.
Current wording
The medical margin in Medicare increased $9 million in the first quarter of 2025, when compared with the first quarter of 2024, mainly due to the year-over-year increase in premium revenues discussed above, and the improved MCR discussed below.
Previous wording
Marketplace premium revenue increased $162 million in the third quarter of 2024 compared to the third quarter of 2023, and increased $356 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, mainly driven by an increase in membership. Our Marketplace membership as of September 30, 2024, amounted to 410,000 members, representing an increase of 134,000 members compared to September 30, 2023, which is in line with our product and pricing strategy to achieve growth, while maintaining target margins in this segment, and membership gained from redeterminations this year.
Current wording
Marketplace premium revenue in the first quarter of 2025 increased $434 million, compared with the first quarter of 2024, due to an expected increase in membership in line with our product and pricing strategy to achieve growth, membership growth associated with the ConnectiCare acquisition, and the impact of membership gained from redeterminations in 2024. Our Marketplace membership as of March 31, 2025 amounted to 662,000 members, representing an increase of 316,000 members compared to March 31, 2024.
Previous wording
The Marketplace medical margin increased $75 million in the third quarter of 2024 when compared with the third quarter of 2023, and increased $116 million in the nine months ended September 30, 2024 when compared with the nine months ended September 30, 2023. The increase in each period is primarily due to the growth in premiums and margin associated with the higher membership and the impact of MCR changes discussed below.
Current wording
The Marketplace medical margin increased $31 million in the first quarter of 2025, when compared with the first quarter of 2024, primarily due to the growth in premiums and margin associated with the higher membership, partially offset by the impact of MCR changes discussed below.
Previous wording
The Other segment includes service revenues and costs associated with long-term services and supports consultative services we provide in Wisconsin, and also includes certain corporate amounts not allocated to the Medicaid, Medicare, or Marketplace segments. Such amounts were immaterial to our consolidated results of operations for the three and nine months ended September 30, 2024 and 2023.
Current wording
The Other segment includes service revenues and costs associated with long-term services and supports consultative services we provide in Wisconsin, the commercial portion of the business acquired in connection with the ConnectiCare transaction that closed effective February 1, 2025, and certain corporate amounts not allocated to the Medicaid, Medicare, or Marketplace segments. Such amounts were immaterial to our consolidated results of operations in the first quarters of 2025 and 2024, respectively.
Previous wording
Our regulated health plan subsidiaries are each subject to applicable state regulations that, among other things, require the maintenance of minimum levels of capital and surplus. We continue to maintain levels of aggregate excess statutory capital and surplus in our regulated health plan subsidiaries that we believe are appropriate. See further discussion under “Regulatory Capital and Dividend Restrictions” below. When available and as permitted by applicable regulations, cash in excess of the capital needs of our regulated health plan subsidiaries is generally paid in the form of dividends to our parent company to be used for general corporate purposes. In the third quarter and the nine months ended September 30, 2024, the parent company received $385 million and $670 million, respectively, in dividends and return of capital from the regulated health plan subsidiaries. See further discussion of dividends below in “Future Sources and Uses of Liquidity—Future Sources.”
Current wording
Our regulated health plan subsidiaries are each subject to applicable state regulations that, among other things, require the maintenance of minimum levels of capital and surplus. We continue to maintain levels of aggregate excess statutory capital and surplus in our regulated health plan subsidiaries that we believe are appropriate. See further discussion under “Regulatory Capital and Dividend Restrictions” below. When available and as permitted by applicable regulations, cash in excess of the capital needs of our regulated health plan subsidiaries is generally paid in the form of dividends to our parent company to be used for general corporate purposes. In the three months ended March 31, 2025, the parent company received $110 million in dividends and return of capital from the regulated health plan subsidiaries. See further discussion of dividends below in “Future Sources and Uses of Liquidity—Future Sources.”
Showing the first 40 of 53 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
•our estimates of amounts owed for minimum medical loss ratio regulations and contractual provisions, administrative cost and profit ceilings, premium stabilization programs, profit-sharing arrangements, and risk adjustment provisions and requirements;
Previous report — wording carried elsewhere
Acquisitions. Connecticut Acquisition—Marketplace and Medicare. On July 23, 2024, we announced a definitive agreement to acquire ConnectiCare Holding Company, Inc. (“ConnectiCare”), a wholly owned subsidiary of EmblemHealth, Inc. ConnectiCare is a leading health plan in the state of Connecticut serving members across Marketplace, Medicare, and certain commercial products. The purchase price for the transaction is approximately $350 million, which we intend to fund with cash on hand. The transaction is subject to applicable federal and state regulatory approvals and the satisfaction of other customary closing conditions. We currently expect the transaction to close in the first quarter of 2025.