MOLINA HEALTHCARE, INC.

Previous wording

•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 wording

•the implementation in 2025 or 2026 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;

Previous wording

•federal or state legislative or regulatory changes, or changes through executive orders, 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 wording

•federal or state legislative or regulatory changes, including changes effected by the One Big Beautiful Bill Act, or changes through executive orders, 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”);

Previous 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;

Current wording

•evolving Marketplace dynamics including issues impacting enrollment, special enrollment periods, member choice, premium subsidies, broker rates, risk adjustment estimates and results, Marketplace plan insolvencies or receiverships, and the potential for disproportionate enrollment of higher acuity members;

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 5.7 million members as of June 30, 2025, located across 22 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 5.6 million members as of September 30, 2025, located across 21 states.

Previous wording

We reported net income of $255 million, or $4.75 per diluted share, for the second quarter of 2025, which reflected the following:

Current wording

We reported net income of $79 million, or $1.51 per diluted share, for the third quarter of 2025, which reflected the following:

Previous wording

•Membership of 5.7 million at June 30, 2025 increased 167,000, or 3.0%, compared with June 30, 2024, primarily due to the growth in the Marketplace segment, including the ConnectiCare acquisition, partially offset by the impact of a modest general contraction in Medicaid;

Current wording

•Membership of 5.6 million at September 30, 2025, which increased 30,000, or 0.5%, compared with September 30, 2024, primarily due to the growth in the Marketplace segment, including the ConnectiCare acquisition, partially offset by the impact of the Virginia contract termination and general contraction in Medicaid;

Previous wording

•Premium revenue of $10.9 billion, which increased 15% compared with the second quarter of 2024, and mainly reflects new contract wins, acquisitions, growth in our current footprint, and rate increases;

Current wording

•Premium revenue of $10.8 billion, which increased 12% compared with the third quarter of 2024, and mainly reflects the ConnectiCare acquisition, rate increases, and growth in our current footprint;

Previous wording

•Consolidated medical care ratio (“MCR”) of 90.4% compared with 88.6% for the second quarter of 2024, reflecting a very challenging medical cost trend environment for each of our segments, but moderated by our effective medical cost management;

Current wording

•Consolidated medical care ratio (“MCR”) of 92.6% compared with 89.2% for the third quarter of 2024, reflects the continuation of a very challenging medical cost trend environment for each of our segments, but especially in Marketplace;

Previous wording

•General and administrative expense (“G&A”) ratio of 6.2%, compared with 7.0% for the second quarter of 2024, reflecting reduced incentive compensation tied to lower expected performance, 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 6.4%, compared with 6.5% for the third quarter of 2024, the continued benefit of fixed cost leverage as we grow our business and operating discipline; and

Previous wording

Net income in the second quarter of 2025 amounted to $255 million, or $4.75 per diluted share, compared with $301 million, or $5.17 per diluted share, in the second quarter of 2024. Net income in the six months ended June 30, 2025 amounted to $553 million, or $10.19 per diluted share, compared with $602 million, or $10.33 per diluted share, in the six months ended June 30, 2024.

Current wording

Net income in the third quarter of 2025 amounted to $79 million, or $1.51 per diluted share, compared with $326 million, or $5.65 per diluted share, in the third quarter of 2024. Net income in the nine months ended September 30, 2025 amounted to $632 million, or $11.79 per diluted share, compared with $928 million, or $15.97 per diluted share, in the nine months ended September 30, 2024.

Previous wording

The decline in net income in the second quarter of 2025 and six months ended June 30, 2025, when compared to the prior year, reflects a decline in operating income for both periods. The decrease in operating income was mainly attributable to an increase in the MCR, higher interest cost and lower investment income, partially offset by the benefit of higher membership and G&A expense efficiencies.

Current wording

The decline in net income in the third quarter of 2025 and nine months ended September 30, 2025 compared to the prior year reflects a decline in operating income for both periods. The decrease in operating income was mainly attributable to an increase in the MCR, higher interest cost and lower investment income, partially offset by the benefit of higher membership and G&A expense efficiencies.

Previous wording

Premium revenue increased $1.4 billion, or 15%, in the second quarter of 2025, when compared with the second quarter of 2024, and increased $2.5 billion, or 13%, in the six months ended June 30, 2025, when compared with the six months ended June 30, 2024. The higher premium revenue reflects new contract wins, acquisitions, growth in our current footprint, and rate increases, partially offset by the impact of lower membership due to redeterminations that continued into the second half of 2024. See further discussion in “Reportable Segments—Segment Financial Performance,” below.

Current wording

Premium revenue increased $1.1 billion, or 12%, in the third quarter of 2025, when compared with the third quarter of 2024, and increased $3.7 billion, or 13%, in the nine months ended September 30, 2025, when compared with the nine months ended September 30, 2024. The higher premium revenue mainly reflects the ConnectiCare acquisition, rate increases, and growth in our current footprint, partially offset by the impact of lower membership in Medicaid. See further discussion in “Reportable Segments—Segment Financial Performance,” below.

Previous wording

The consolidated MCR in the second quarter of 2025 increased to 90.4%, compared with 88.6% in the second quarter of 2024, or 180 basis points, and the consolidated MCR in the six months ended June 30, 2025 increased to 89.8%, compared with 88.6% MCR for the six months ended June 30, 2024, or 120 basis points. The increase in both periods reflects MCR increases in all our segments, reflecting a very challenging medical cost trend environment for each of our segments, but moderated by our consistently effective medical cost management. The consolidated MCR for the six months ended June 30, 2025 is above our long-term target range. See further discussion in “Reportable Segments—Segment Financial Performance,” below.

Current wording

The consolidated MCR in the third quarter of 2025 increased to 92.6%, compared with 89.2% in the third quarter of 2024, or 340 basis points, and the consolidated MCR in the nine months ended September 30, 2025 increased to 90.8%, compared with 88.8% MCR for the nine months ended September 30, 2024, or 200 basis points. The increase in both periods reflects MCR increases in all our segments, reflecting the continuation of a very challenging medical cost trend environment for each of our segments, especially in Marketplace, but moderated by our medical cost management initiatives. The consolidated MCR for the nine months ended September 30, 2025 is above our long-term target range. See further discussion in “Reportable Segments—Segment Financial Performance,” below.

Previous wording

The impact of prior year reserve development in the six months ended June 30, 2025 was not significant, and its impact on earnings was mostly absorbed by minimum MLRs and medical cost corridors.

Current wording

The impact of prior year reserve development in the nine months ended September 30, 2025 was partially 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 3.8% and 3.1% for the second quarter of 2025 and 2024, respectively, and 3.7% and 3.0% for the six months ended June 30, 2025 and 2024, respectively. The current year ratio increases were mainly due to state mix changes in our Medicaid segment.

Current wording

The premium tax ratio (premium tax expense as a percentage of premium revenue plus premium tax revenue) was 4.5% and 5.0% for the third quarter of 2025 and 2024, respectively, and 3.9% and 3.7% for the nine months ended September 30, 2025 and 2024, respectively. The current year ratio changes were mainly due to state mix changes in our Medicaid segment.

Previous wording

Investment income decreased to $106 million in the second quarter of 2025, compared with $115 million in the second quarter of 2024, and decreased to $214 million in the six months ended June 30, 2025, compared with $223 million in the six months ended June 30, 2024. The decrease was mainly attributable to a decline in interest rates, partially offset by an increase in average invested balances in each period.

Current wording

Investment income decreased to $108 million in the third quarter of 2025, compared with $118 million in the third quarter of 2024, and decreased to $322 million in the nine months ended September 30, 2025, compared with $341 million in the nine months ended September 30, 2024. The decrease was mainly attributable to a decline in prevailing interest rates, partially offset by an increase in average invested balances in each period.

Previous wording

Other revenue amounted to $22 million in the second quarter of 2025, compared with $21 million in the second quarter of 2024, and totaled $45 million in the six months ended June 30, 2025, compared with $43 million in the six months ended June 30, 2024. 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 $22 million in the third quarter of 2025, compared with $20 million in the third quarter of 2024, and totaled $67 million in the nine months ended September 30, 2025, compared with $63 million in the nine months ended September 30, 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 6.2% in the second quarter of 2025, compared with 7.0% in the second quarter of 2024. The G&A expense ratio was 6.6% in the six months ended June 30, 2025, compared with 7.1% in the six months ended June 30, 2024. The change in G&A ratios reflects reduced incentive compensation tied to lower expected performance, operating discipline, and the continued benefit of operating leverage as we grow our business.

Current wording

The G&A expense ratio was 6.4% in the third quarter of 2025, compared with 6.5% in the third quarter of 2024. The G&A expense ratio was 6.5% in the nine months ended September 30, 2025, compared with 6.9% in the nine months ended September 30, 2024. The change in G&A ratios reflects reduced incentive compensation tied to lower expected performance, operating discipline, and the continued benefit of operating leverage as we grow our business.

Previous wording

Depreciation and amortization was $58 million in the second quarter of 2025, compared with $46 million in the second quarter of 2024, and was $106 million in the six months ended June 30, 2025, compared with $91 million in the six months ended June 30, 2024. The increase is due to impacts from the ConnectiCare acquisition that closed in the first quarter of 2025.

Current wording

Depreciation and amortization was $45 million in the third quarter of 2025, compared with $47 million in the third quarter of 2024, and was $151 million in the nine months ended September 30, 2025, compared with $138 million in the nine months ended September 30, 2024. The increase in the nine months ended September 30, 2025 is due to impacts from the ConnectiCare acquisition that closed in the first quarter of 2025.

Previous wording

Other operating expenses decreased by $18 million in the second quarter of 2025, compared with the second quarter of 2024, and decreased by $31 million in the six months ended June 30, 2025, compared with the six months ended June 30, 2024. These decreases reflect the impact of 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.

Current wording

Other operating expenses increased by $17 million in the third quarter of 2025, compared with the third quarter of 2024, and decreased by $14 million in the nine months ended September 30, 2025, compared with the nine months ended September 30, 2024. The third quarter changes reflect the impact of non-recurring litigation recoveries recognized in 2024, and the nine month changes reflect the impact of 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 $48 million and $28 million in the second quarter of 2025 and 2024, respectively, and $91 million and $55 million for the six months ended June 30, 2025 and 2024, respectively. The increase is due to borrowings under the Credit Facility (as defined below) and 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.

Current wording

Interest expense was $49 million and $29 million in the third quarter of 2025 and 2024, respectively, and $140 million and $84 million for the nine months ended September 30, 2025 and 2024, respectively. The increase is due to borrowings under the Credit Facility (as defined below), borrowings under the Term Loans (as defined below) occurring in the first and third quarter of 2025, and the issuance of the $750 million 6.250% Notes due 2033 in November 2024.

Previous wording

Income tax expense amounted to $70 million in the second quarter of 2025, or 21.5% of pretax income, compared with income tax expense of $105 million, or 25.8% of pretax income, in the second quarter of 2024. Income tax expense amounted to $162 million in the six months ended June 30, 2025, or 22.7% of pretax income, compared with income tax expense of $203 million, or 25.2% of pretax income, in the six months ended June 30, 2024. The difference in the effective tax rate for both periods is due to an increase in tax benefits related to transferable federal tax credits, decreases in nondeductible expenses and state and local income taxes, and differences in discrete tax benefits recognized in the respective periods.

Current wording

Income tax expense amounted to $9 million in the third quarter of 2025, or 10.1% of pretax income, compared with income tax expense of $112 million, or 25.7% of pretax income, in the third quarter of 2024. Income tax expense amounted to $171 million in the nine months ended September 30, 2025, or 21.3% of pretax income, compared with income tax expense of $315 million, or 25.3% of pretax income, in the nine months ended September 30, 2024. The difference in the effective tax rate for both periods is due to an increase in tax benefits related to transferable federal tax credits, decreases in nondeductible expenses and state and local income taxes, and differences in discrete tax benefits recognized in the respective periods.

Previous 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.

Current wording

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.

Previous wording

As of June 30, 2025, we served approximately 5.7 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 September 30, 2025, 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.

Previous wording

Medicaid premium revenue increased $651 million, or 9%, in the second quarter of 2025, when compared with the second quarter of 2024. Medicaid premium revenue increased $1.3 billion, or 9%, in the six months ended June 30, 2025, when compared with the six months ended June 30, 2024. The increase for both periods was mainly due to revenue from the new contract win in New Mexico, which commenced in July 2024, expansions in Texas, which commenced in September 2024, and premium rate increases, which were partially offset by the impact of lower membership due to redeterminations that continued into the second half of 2024. Also contributing to the overall premium revenue increase is a lower impact of minimum MLRs and medical cost corridors in the second quarter of 2025 and six months ended June 30, 2025, when compared to the prior year.

Current wording

Medicaid premium revenue increased $347 million, or 5%, in the third quarter of 2025, when compared with the third quarter of 2024. Medicaid premium revenue increased $1.6 billion, or 7%, in the nine months ended September 30, 2025, when compared with the nine months ended September 30, 2024. The increase in the third quarter was mainly due to premium rate increases, which were partially offset by the impact of lower membership due to redeterminations that continued into the second half of 2024, a general market contraction in 2025, and expiration of the Virginia contract. Also contributing to the premium revenue increase for the nine month period is revenue from contract wins in New Mexico (July 2024) and Texas ABD (September 2024), and a lower impact of minimum MLRs and medical cost corridors, when compared to the prior year.

Previous wording

The medical margin in our Medicaid program increased $14 million, or 2%, in the second quarter of 2025 when compared with the second quarter of 2024, and increased $30 million, or 2%, in the six months ended June 30, 2025 when compared with the six months ended June 30, 2024. The change was driven by the increased premium revenues discussed above, partially offset by an increase in the MCR, as described below.

Current wording

The medical margin in our Medicaid program decreased $91 million, or 12%, in the third quarter of 2025 when compared with the third quarter of 2024, and decreased $61 million, or 3%, in the nine months ended September 30, 2025 when compared with the nine months ended September 30, 2024. The changes for both periods were driven by an increase in the MCR, as described below, partially offset by the increased premium revenues discussed above.

Previous wording

The Medicaid MCR increased 50 basis points to 91.3% in the second quarter of 2025, from 90.8% in the second quarter of 2024, and increased 60 basis points to 90.8% in the six months ended June 30, 2025, from 90.2% in the six months ended June 30, 2024. The increase in both periods was driven by higher than expected medical costs from acuity shifts, changes in product mix and an increase in utilization among our continuing population from the second half of 2024 that has continued into 2025, including high-cost drugs and behavioral health services, as well as broader utilization pressure in inpatient and outpatient settings, partially offset by premium rate increases. The Medicaid MCR for the second quarter of 2025 is above our long-term target range.

Current wording

The Medicaid MCR increased 150 basis points to 92.0% in the third quarter of 2025, from 90.5% in the third quarter of 2024, and increased 90 basis points to 91.2% in the nine months ended September 30, 2025, from 90.3% in the nine months ended September 30, 2024. The increase in both periods was driven by higher than expected medical costs from acuity shifts, changes in product mix and an increase in utilization among our continuing population from the second half of 2024 that has continued into 2025. The increased utilization includes behavioral health services, high-cost drugs, long-term services and supports (LTSS) and broader utilization pressure in inpatient and outpatient settings, partially offset by premium rate increases. The Medicaid MCR for the third quarter and nine months ended 2025 is higher than we expected and is above our long-term target range.

Previous wording

Medicare premium revenue increased $167 million, or 12%, in the second quarter of 2025 compared to the second quarter of 2024, and increased $193 million, or 7%, in the six months ended June 30, 2025 compared to the six months ended June 30, 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 wording

Medicare premium revenue increased $243 million, or 18%, in the third quarter of 2025 compared to the third quarter of 2024, and increased $436 million, or 10%, in the nine months ended September 30, 2025 compared to the nine months ended September 30, 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.

Previous wording

The medical margin for Medicare decreased $56 million in the second quarter of 2025, and decreased $47 million in the six months ended June 30, 2025, when compared to the same periods in 2024. The decrease in both periods was mainly due to the increase in MCR discussed below, partially offset by the year-over-year increase in premium revenues discussed above.

Current wording

The medical margin for Medicare decreased $39 million in the third quarter of 2025, and decreased $86 million in the nine months ended September 30, 2025, when compared to the same periods in 2024. The decrease in both periods was mainly due to the increase in MCR discussed below, partially offset by the year-over-year increase in premium revenues discussed above.

Previous wording

The Medicare MCR increased to 90.0% in the second quarter of 2025, or 510 basis points, compared to the second quarter of 2024, and increased to 89.2% in the six months ended June 30, 2025, or 240 basis points, compared to the six months ended June 30, 2024. The increase in each period resulted mainly from higher-than-expected utilization among our high-acuity member populations, particularly for LTSS benefits and high-cost pharmacy drugs, partially offset by pricing and benefit adjustments implemented for 2025 and the exit from MAPD in thirteen states. The Medicare MCR for the second quarter of 2025 is above our long-term target range.

Current wording

The Medicare MCR increased to 93.6% in the third quarter of 2025, or 400 basis points, compared to the third quarter of 2024, and increased to 90.7% in the nine months ended September 30, 2025, or 300 basis points, compared to the nine months ended September 30, 2024. The increase in both periods resulted mainly from higher-than-expected utilization among our high-acuity duals populations, particularly for LTSS benefits and high-cost pharmacy drugs, partially offset by pricing and benefit adjustments implemented for 2025 and the exit from MAPD in thirteen states. The Medicare MCR for the third quarter and nine months ended 2025 is above our long-term target range.

Previous wording

Marketplace premium revenue increased $573 million in the second quarter of 2025 compared to the second quarter of 2024, and increased $1.0 billion in the six months ended June 30, 2025 compared to the six months ended June 30, 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 June 30, 2025, amounted to 690,000 members, representing an increase of 304,000 members compared to June 30, 2024.

Current wording

Marketplace premium revenue increased $538 million in the third quarter of 2025 compared to the third quarter of 2024, and increased $1.5 billion in the nine months ended September 30, 2025 compared to the nine months ended September 30, 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 September 30, 2025, amounted to 713,000 members, representing an increase of 303,000 members compared to September 30, 2024.

Previous wording

The Marketplace medical margin decreased $3 million in the second quarter of 2025 when compared with the second quarter of 2024, and increased $28 million in the six months ended June 30, 2025 when compared with the six months ended June 30, 2024. The changes in each period were impacted by 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 decreased $126 million in the third quarter of 2025 when compared with the third quarter of 2024, and decreased $98 million in the nine months ended September 30, 2025 when compared with the nine months ended September 30, 2024. The changes in each period were impacted by the growth in premiums and margin associated with the higher membership, and the impact of MCR changes discussed below.

Previous wording

The Marketplace MCR increased to 85.4% in the second quarter of 2025, or 1,380 basis points, compared to 71.6% in the second quarter of 2024, and increased to 83.7% in the six months ended June 30, 2025, or 1,130 basis points, compared to 72.4% in the six months ended June 30, 2024. The increase in MCR for both periods was higher than expected, reflecting higher utilization relative to the risk adjustment revenue that we priced for among our continuing population and Special Enrollment Period members, prior year member reconciliations, and the impact of higher initial MCRs related to the ConnectiCare acquisition. Market indicators suggest that the overall risk pool is also significantly elevated.

Current wording

The Marketplace MCR increased to 95.6% in the third quarter of 2025, or 2,260 basis points, compared to 73.0% in the third quarter of 2024, and increased to 87.9% in the nine months ended September 30, 2025, or 1,530 basis points, compared to 72.6% in the nine months ended September 30, 2024. The increase in MCR for both periods was higher than expected, reflecting higher utilization relative to the risk adjustment revenue that we priced for among our continuing population and Special Enrollment Period members. The higher trend across the total Marketplace population mitigates the risk adjustment hedge we would have expected to realize. The increase in MCR also reflects the impact from higher initial MCRs related to the ConnectiCare acquisition and the impact of membership losses due to prior year member reconciliations and various program integrity initiatives. The program integrity initiatives caused a disconnect between premium and medical costs because members were disenrolled, but we were still required to cover the medical cost.

Previous 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 for the three and six months ended June 30, 2025 and 2024.

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 for the three and nine months ended September 30, 2025 and 2024.

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 three and six months ended June 30, 2025, the parent company received $260 million and $370 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 and nine months ended September 30, 2025, the parent company received $278 million and $648 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.”

Previous wording

Parent company liquidity requirements generally consist of payment of administrative costs not directly incurred by our regulated operations, including, but not limited to, staffing costs, lease payments, branding and certain information technology services; capital contributions paid to our regulated health plan subsidiaries, including funding for newer health plans; capital expenditures; debt service; funding for common stock purchases, acquisitions and other growth-related activities; and federal tax payments. In the three and six months ended June 30, 2025, the parent company contributed capital in the aggregate amount of $90 million and $129 million, respectively, to our regulated health plan subsidiaries to satisfy statutory capital and surplus requirements and to fund our Connecticut health plans acquired in the ConnectiCare acquisition and our New Mexico health plan. Our parent company normally meets its liquidity requirements from administrative services fees earned under administrative services agreements; dividends received from our regulated subsidiaries; federal tax payments collected from the regulated subsidiaries; proceeds received from the issuance of debt and equity securities; and cash flows from investing activities, including investment income and sales of investments.

Current wording

Parent company liquidity requirements generally consist of payment of administrative costs not directly incurred by our regulated operations, including, but not limited to, staffing costs, lease payments, branding and certain information technology services; capital contributions paid to our regulated health plan subsidiaries, including funding for newer health plans; capital expenditures; debt service; funding for common stock purchases, acquisitions and other growth-related activities; and federal tax payments. In the three and nine months ended September 30, 2025, the parent company contributed capital in the aggregate amount of $55 million and $184 million, respectively, to our regulated health plan subsidiaries to satisfy statutory capital and surplus requirements mainly to fund our Connecticut health plans acquired in the ConnectiCare acquisition and, to a lesser extent, our New Mexico health plan. Our parent company normally meets its liquidity requirements from administrative services fees earned under administrative services agreements; dividends received from our regulated subsidiaries; federal tax payments collected from the regulated subsidiaries; proceeds received from the issuance of debt and equity securities; and cash flows from investing activities, including investment income and sales of investments.

Previous wording

Cash, cash equivalents and investments at the parent company amounted to approximately $100 million and $445 million as of June 30, 2025, and December 31, 2024, respectively. The decrease for the six months ended June 30, 2025 was primarily due to the purchase of approximately 1.7 million shares of our stock for $500 million in the first quarter of 2025, funding the ConnectiCare transaction for $350 million, and capital contributions to regulated health plan subsidiaries, partially offset by the timing of corporate payments, dividends received from regulated health plan subsidiaries and $450 million from net borrowing activity under the Credit Facility and Term Loan.

Current wording

Cash, cash equivalents and investments at the parent company amounted to approximately $108 million and $445 million as of September 30, 2025, and December 31, 2024, respectively. The decrease for the nine months ended September 30, 2025 was primarily due to the purchase of approximately 2.8 million shares of our stock for $500 million in the third quarter of 2025, approximately 1.7 million shares of our stock for $500 million in the first quarter of 2025, funding the ConnectiCare transaction for $350 million, and capital contributions to regulated health plan subsidiaries, partially offset by $740 million from net borrowing activity under the Credit Facility and Term Loans, dividends received from regulated health plan subsidiaries and the timing of corporate payments.

Previous wording

Net cash used in operations for the six months ended June 30, 2025 was $112 million, compared with $5 million in the six months ended June 30, 2024. The change in cash flow mainly results from timing differences in settlement of government agency receivables and payables, including minimum MLR and medical cost corridor settlements.

Current wording

Net cash used in operations for the nine months ended September 30, 2025 was $237 million, compared with $868 million provided in the nine months ended September 30, 2024. The change in cash flow mainly results from timing differences in settlement of government agency receivables and payables, including settlements for Medicaid minimum MLR and medical cost corridors and Marketplace risk adjustment payables, tax payments and a lower net income in the nine months ended September 30, 2025.

Previous wording

Net cash provided by investing activities was $5 million in the six months ended June 30, 2025, compared with $435 million used in the six months ended June 30, 2024, an increase in cash flow of $440 million. This change in cash flow reflects the net impact of proceeds and purchases of investments, which amounted to net proceeds of $296 million in the six months ended June 30, 2025 and net purchases of $88 million in the six months ended June 30, 2024. Net cash used in business combinations amounted to $245 million in the six months ended June 30, 2025, related to the ConnectiCare acquisition, compared to $295 million in net cash used in the six months ended June 30, 2024, related to the Bright acquisition.

Current wording

Net cash provided by investing activities was $82 million in the nine months ended September 30, 2025, compared with $483 million used in the nine months ended September 30, 2024, an increase in cash flow of $565 million. This change in cash flow reflects the net impact of proceeds and purchases of investments, which amounted to net proceeds of $410 million in the nine months ended September 30, 2025 and net purchases of $118 million in the nine months ended September 30, 2024. Net cash used in business combinations amounted to $245 million in the nine months ended September 30, 2025, related to the ConnectiCare acquisition, compared to $295 million in net cash used related to the Bright acquisition and $49 million for final purchase consideration for MyChoice Wisconsin in the nine months ended September 30, 2024.

Previous wording

Net cash used in financing activities was $42 million in the six months ended June 30, 2025, compared with $50 million used in the six months ended June 30, 2024, an increase in cash flow of $8 million. In the six months ended June 30, 2025, financing activity included common stock purchases of $500 million and $650 million in combined borrowings under the Credit Facility and Term Loan, partially offset by $200 million in repayment under the Credit Facility and Term Loan. In addition, in the six months ended June 30, 2025 and 2024, financing cash outflows included $36 million and $56 million, respectively, for common stock withheld to settle employee tax obligations.

Current wording

Net cash used in financing activities was $262 million in the nine months ended September 30, 2025, compared with $414 million used in the nine months ended September 30, 2024, an increase in cash flow of $152 million. In the nine months ended September 30, 2025, financing activity included common stock purchases of $1.0 billion and $360 million in repayment under the Credit Facility and Term Loans, partially offset by $1.1 billion in combined borrowings under the Credit Facility and Term Loans. In the nine months ended September 30, 2024, financing activity included common stock purchases of $500 million and $150 million in repayment under the Credit Facility, partially offset by $300 million in borrowings under the Credit Facility. In addition, in the nine months ended September 30, 2025 and 2024, financing cash outflows included $37 million and $57 million, respectively, for common stock withheld to settle employee tax obligations.