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MOLINA HEALTHCARE, INC.

MOH
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Business Summary

Molina Healthcare, Inc. operates as a managed healthcare services provider under the Medicaid and Medicare programs and through the state insurance marketplaces, serving approximately 5.5 million members as of December 31, 2025, located across 21 states . The company was founded in 1980 as a provider organization serving low-income families in Southern California and reincorporated in Delaware in 2002 . The industry is characterized by government-funded healthcare programs that are jointly funded by federal and state governments, with states having significant flexibility to structure their own programs subject to federal laws and regulations . The approximate average federal medical assistance percentage across all jurisdictions is 60% and varies inversely with average personal income in the state . Most states have contracted with managed care plans to provide Medicaid services to beneficiaries, seeking to increase budget predictability, constrain spending, improve access to care and value, and meet other objectives .

The company's primary competitors in the Medicaid managed care industry include Centene Corporation, CVS Health Corporation, Elevance Health, Inc., UnitedHealth Group Inc., and large not-for-profit healthcare organizations . In the Medicare market, primary competitors include CVS Health Corporation, Humana, Inc., and UnitedHealth Group Inc. . The company's primary competitor for low-income Marketplace membership is Centene Corporation . Molina has achieved a 90% re-procurement win rate for Medicaid requests for proposal representing $14 billion in retained revenue and an 80% new contract win rate worth $20 billion in premium , and has completed acquisitions totaling more than $10 billion of revenue during the period from 2019 to 2025 .

The company generates revenue primarily from health insurance premiums received from state Medicaid agencies and the federal government under fixed per-member per-month rates that vary by state, line of business, demographics, and health risk factors . Premium revenue is recognized in the month that members are entitled to receive healthcare services, and premiums collected in advance are deferred . The company also earns premium tax revenue, investment income, and other revenue including service revenue associated with long-term services and supports consultative services in Wisconsin . The business model is based on assuming the associated medical and administrative cost risks in exchange for these fixed premium payments, with profitability dependent on accurately predicting and managing medical care costs .

The company has four reportable segments: Medicaid, Medicare, Marketplace, and Other . The Medicaid segment provides managed healthcare services under state Medicaid programs including Temporary Assistance for Needy Families, Medicaid Aged Blind or Disabled, Children's Health Insurance Program, Medicaid Expansion, and Long-Term Services and Supports . Medicaid premium revenue constituted 75% of consolidated premium revenue in the year ended December 31, 2025 , totaling $32.240 billion for the year. The Medicare segment provides services under Medicare Advantage-Part D, Dual Eligible Special Needs Plans, Highly-Integrated Dual Special Needs Plans, Fully-Integrated Dual Special Needs Plans, Coordination Only D-SNP, Chronic Special Needs Plan, and Medicare-Medicaid Plans . Medicare premium revenue was $6.235 billion for the year. The Marketplace segment offers Affordable Care Act-compliant health insurance plans on the Federally Facilitated Marketplace and State Based Marketplaces , generating $4.487 billion in premium revenue for the year. The Other segment, which is insignificant to consolidated results, includes long-term services and supports consultative services in Wisconsin and the commercial portion of the business acquired in connection with the ConnectiCare transaction .

The Marketplace segment offers plans in many of the states where the company offers Medicaid health plans, allowing Medicaid members to stay with their providers as they transition between Medicaid and the Marketplace . Plans are categorized by metal tiers (Platinum, Gold, Silver, or Bronze) which determine how beneficiaries and the plan share cost . The company's Medicare segment includes contracts with CMS under the Medicare Advantage program to provide benefits above original Medicare, including cost-sharing and enhanced prescription drug benefits under Part D that are targeted towards low-income beneficiaries . The company also participates in Medicare-Medicaid Plans which provide for coordination of care and deliver services in a more efficient manner, with certain states having undertaken demonstration programs to integrate Medicare and Medicaid services for dual-eligible individuals .

In 2025, the company closed its acquisition of ConnectiCare Holding Company, Inc. effective February 1, 2025, for a purchase price of $350 million in cash, serving approximately 140,000 members across Marketplace, Medicare, and certain commercial products . The company completed the private offering of $850 million aggregate principal amount of 6.500% senior notes due 2031, using net proceeds for repayment of $740 million in existing term loan debt and for general corporate purposes. The company also refinanced the existing revolving credit facility with a $1.25 billion facility with a five-year term ending on November 20, 2030 . In the first quarter of 2025, the company purchased approximately 1,679,000 shares for $500 million (average cost of $297.83 per share ), and in the third quarter of 2025, purchased approximately 2,849,000 shares for $500 million (average cost of $175.50 per share ). The company's regulated health plans paid $985 million in total dividends to the parent company in 2025 .

Total revenue for the year ended December 31, 2025 was $45.426 billion , compared to $40.650 billion in 2024, representing an increase of 12% . Premium revenue increased to $43.052 billion from $38.627 billion in 2024, an increase of 11% . Net income was $472 million or $8.92 per diluted share , compared to $1.179 billion or $20.42 per diluted share in 2024. The consolidated medical care ratio increased to 91.7% from 89.1% in 2024, reflecting a challenging medical cost trend environment in all segments. The general and administrative expense ratio was 6.6% compared to 6.7% in 2024. Pre-tax margin was 1.3% compared to 3.9% in 2024.

Business Outlook

The company's long-term premium revenue growth target remains at 11% to 13% , and the company is on pace to surpass the $50 billion premium revenue mark in 2027 . The long-term net income growth target is 11% to 13% . The company expects its Medicaid enrollment to be flat in 2026 compared to 2025 , with modest contraction in the current footprint as some states continue to review membership eligibility to be offset by the implementation of the new Florida Kids contract expected to commence starting in the fourth quarter of 2026 . The company expects its Medicare enrollment to decrease by approximately 12% in 2026 , to a total of 230,000 members by the end of the year, including 80,000 Medicare Advantage-Part D members , due to strategic positioning. The company expects its Marketplace enrollment to decrease to a total of approximately 220,000 members by the end of the year, representing an estimated Marketplace premium revenue decrease of approximately 50% in 2026 , in an effort towards restoring target margins.

The One Big Beautiful Bill Act signed into law in July 2025 contains changes to the Medicaid and Marketplace programs that are expected to reduce enrollment in state Medicaid programs . The company currently estimates the reduction in enrollment will be in the range of 15% to 20% by 2029 on 1.2 million members in the Medicaid Expansion population, with any acuity shifts expected to be modest and gradual . An estimated two thirds of the company's Expansion members already work in some capacity . The law also reduces revenues that states can raise through provider taxes to finance their share of Medicaid spending and limits payments to Medicaid providers to 100 percent of the mandated Medicare rate for Expansion states and 110 percent of the Medicare rate for non-Expansion states , with these changes scheduled to begin in 2028 and expected to take 5 to 15 years to be fully implemented .

The company's growth strategy includes organic growth through leveraging the existing health plan portfolio and winning new territories, as well as inorganic growth through accretive acquisitions . In 2025, the company reported strong performance on Medicaid state procurements, with newly reported RFP successes and acquisitions representing nearly $9 billion of incremental annual premium revenue. The company's proven record of RFP success makes management confident in the ability to retain current revenue and to pursue most new state opportunities with a continued high win rate . The company remains opportunistic about deploying capital to accretive acquisitions, noting that the current challenging operating environment has been a catalyst for many smaller and less diverse health plans to consider their strategic options .

The company is promoting strong medical and general and administrative cost management to drive attractive and sustainable margins . The company is advancing capabilities to drive medical cost efficiencies with a focus on high-acuity populations, including care management, value-based contracting, payment integrity, and centers of excellence for behavioral health, pharmacy, and Long-Term Services and Supports . As part of operating enhancements, the company is making appreciable investments in deploying artificial intelligence tools to enhance effectiveness and create efficiency . The general and administrative expense ratio decreased to 6.6% in 2025 from 6.7% in 2024 , reflecting operating discipline, the continued benefit of operating leverage as the business grows, and reduced incentive compensation tied to lower actual and expected performance .

The company continues to invest in advanced technologies, including AI, to enhance operational efficiency, improve member experience, and support clinical functions . These technologies are increasingly integrated into the company's information systems and digital platforms to automate administrative processes, streamline claims adjudication, and personalize member engagement . The company's use of AI is governed by internal oversight mechanisms designed to ensure clear insight into AI usage throughout the business and to ensure responsible and ethical deployment . The company is committed to maintaining data integrity, implementing robust governance frameworks, and complying with applicable laws and regulations related to AI usage .

In April 2025, the board of directors authorized the purchase of up to $1 billion of the company's common stock, extending through December 31, 2026 , superseding the stock purchase program previously approved in October 2024 . As of February 10, 2026, $500 million remained available to purchase common stock under this program through December 31, 2026 . The company's capital allocation strategy includes returning excess capital to shareholders in the form of targeted share repurchase programs . The company does not currently pay cash dividends on its common stock and intends to retain any future earnings to fund projected business operations , though it intends to periodically evaluate its cash position to determine whether to pay a cash dividend in the future .

The company faces significant headwinds from the current operating environment, with environmental forces influencing growth and margins described as largely unfavorable in the short term . Medicaid enrollment has declined due to eligibility redetermination, and the remaining higher-risk population mix and higher utilization has led to elevated cost trends that have significantly outpaced rates in 2024 and 2025 . Medicaid will continue to be challenged, as rate changes typically lag changes in cost trends . The integration of Medicaid and Medicare for dual-eligible members in many states poses both an opportunity and a threat . The expiration of subsidies in Marketplace in 2025 will lead to a reduction in membership and result in an adverse acuity shift in the overall market risk pool . Program integrity initiatives will also be a contributing factor to Marketplace membership reduction .

The company identified that the MAPD product does not align with its strategic shift to focus exclusively on dual eligible members in Medicare and intends to exit this product for 2027 . The MAPD contracts represented approximately 117,000 members and approximately $1.566 billion , or 25% of Medicare segment premium revenue in 2025 . The company expects 2026 premium revenue from MAPD to be approximately $1 billion . The company expects an estimated pre-tax impairment charge of approximately $93 million , attributable to intangible assets associated with the MAPD product, to be addressed in the first quarter of 2026 .

Risk Factors

The Medicaid rates paid to the company by states may be insufficient to cover rising medical care costs, as premium revenues consist of fixed monthly payments per member and rate increases are most typically implemented by states on only an annual basis . The company's Marketplace business has been volatile and unpredictable, subject to annual programmatic changes that are difficult to price for actuarially, with the non-renewal of Marketplace premium subsidies starting in 2026 potentially negatively impacting enrollment . The company's health plans operate with very low profit margins, and small changes in operating performance or slight changes to accounting estimates could have a disproportionate impact on reported net income; for example, if the overall medical care ratio of 91.7% for the year ended December 31, 2025 had been one percentage point higher, net income per diluted share would have been approximately $2.72 rather than $8.92, a difference of $6.20 . The company faces risks related to the concentration of its business in California, New York, Texas, and Washington, where aggregate Medicaid premium revenue was $17.3 billion , or approximately 54% of total Medicaid premium revenue , in the year ended December 31, 2025. The One Big Beautiful Bill Act is expected to drive a 15% to 20% reduction on 1.2 million members in the company's Medicaid Expansion membership and a further medical cost acuity shift during the next two to three years .

Management Priorities

Management's message emphasizes confidence in executing the strategic plan despite significant environmental challenges presented in the near term of rapidly escalating medical care costs and utilization . The company has achieved 18% revenue growth from 2019 to 2025 , a 90% re-procurement win rate for Medicaid requests for proposal representing $14 billion in retained revenue , and an 80% new contract win rate worth $20 billion in premium . The overall strategy is generally unchanged, but near-term growth opportunities have declined slightly compared to prior years ; the long-term premium revenue growth target remains at 11% to 13% , and the company is on pace to surpass the $50 billion premium revenue mark in 2027 . The long-term net income growth target is 11% to 13% . Management emphasizes that the current challenging operating environment has been a catalyst for many smaller and less diverse health plans to consider their strategic options , and the company remains opportunistic about deploying capital to accretive acquisitions . The company is focused on continuing to maintain a strong capital foundation and retaining enough flexibility to execute on all three pillars of its capital allocation strategy .

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Overview
  2. [2] Item 1, Business — Overview
  3. [3] Item 1, Business — Overview
  4. [4] Item 1, Business — Our Business — Medicaid — Overview
  5. [5] Item 1, Business — Our Business — Medicaid — Overview
  6. [6] Item 1, Business — Our Business — Medicaid — Overview
  7. [7] Item 1, Business — Our Business — Medicaid — Overview
  8. [8] Item 1, Business — Competitive Conditions and Environment
  9. [9] Item 1, Business — Competitive Conditions and Environment
  10. [10] Item 1, Business — Competitive Conditions and Environment
  11. [11] Item 1, Business — Strategy
  12. [12] Item 1, Business — Strategy
  13. [13] Item 1, Business — Strategy
  14. [14] Item 1, Business — Our Business — Medicaid — Basis for Premium Rates
  15. [15] Item 8, Note 2 — Significant Accounting Policies — Premium Revenue Recognition
  16. [16] Item 7, MD&A — Consolidated Results — Other Revenue
  17. [17] Item 1, Business — Our Business — Medicaid — Basis for Premium Rates
  18. [18] Item 1, Business — Our Segments
  19. [19] Item 1, Business — Our Business — Medicaid — Overview
  20. [20] Item 1, Business — Our Business — Medicaid — Status of Significant Contracts
  21. [21] Item 1, Business — Segment Premium Revenue
  22. [22] Item 1, Business — Our Business — Medicare — Overview
  23. [23] Item 1, Business — Segment Premium Revenue
  24. [24] Item 1, Business — Our Business — Marketplace — Overview
  25. [25] Item 1, Business — Segment Premium Revenue
  26. [26] Item 1, Business — Our Segments
  27. [27] Item 1, Business — Our Business — Marketplace — Overview
  28. [28] Item 1, Business — Our Business — Marketplace — Overview
  29. [29] Item 1, Business — Our Business — Medicare — Overview
  30. [30] Item 1, Business — Our Business — Medicare — Overview
  31. [31] Item 1, Business — Key Developments — Connecticut Acquisition
  32. [32] Item 1, Business — Key Developments — Connecticut Acquisition
  33. [33] Item 1, Business — Capital Management
  34. [34] Item 1, Business — Capital Management
  35. [35] Item 1, Business — Capital Management
  36. [36] Item 1, Business — Capital Management
  37. [37] Item 1, Business — Capital Management
  38. [38] Item 1, Business — Capital Management
  39. [39] Item 1, Business — Capital Management
  40. [40] Item 1, Business — Capital Management
  41. [41] Item 1, Business — Capital Management
  42. [42] Item 1, Business — Capital Management
  43. [43] Item 1, Business — Capital Management
  44. [44] Item 7, MD&A — Liquidity, Financial Condition and Capital Resources — Liquidity
  45. [45] Item 7, MD&A — Financial Results Summary
  46. [46] Item 7, MD&A — Financial Results Summary
  47. [47] Item 7, MD&A — 2025 Highlights
  48. [48] Item 7, MD&A — Financial Results Summary
  49. [49] Item 7, MD&A — Financial Results Summary
  50. [50] Item 7, MD&A — 2025 Highlights
  51. [51] Item 7, MD&A — Financial Results Summary
  52. [52] Item 7, MD&A — Financial Results Summary
  53. [53] Item 7, MD&A — Financial Results Summary
  54. [54] Item 7, MD&A — Financial Results Summary
  55. [55] Item 7, MD&A — Financial Results Summary
  56. [56] Item 7, MD&A — Financial Results Summary
  57. [57] Item 7, MD&A — Financial Results Summary
  58. [58] Item 7, MD&A — Financial Results Summary
  59. [59] Item 7, MD&A — Financial Results Summary
  60. [60] Item 7, MD&A — Financial Results Summary
  61. [61] Item 1, Business — Strategy
  62. [62] Item 1, Business — Strategy
  63. [63] Item 1, Business — Strategy
  64. [64] Item 1, Business — Our Business — Medicaid — Overview
  65. [65] Item 1, Business — Our Business — Medicaid — Overview
  66. [66] Item 1, Business — Our Business — Medicare — Overview
  67. [67] Item 1, Business — Our Business — Medicare — Overview
  68. [68] Item 1, Business — Our Business — Medicare — Overview
  69. [69] Item 1, Business — Our Business — Marketplace — Overview
  70. [70] Item 1, Business — Our Business — Marketplace — Overview
  71. [71] Item 1, Business — Trends and Uncertainties — Legislative Developments — One Big Beautiful Bill Act
  72. [72] Item 1, Business — Trends and Uncertainties — Legislative Developments — One Big Beautiful Bill Act
  73. [73] Item 1, Business — Trends and Uncertainties — Legislative Developments — One Big Beautiful Bill Act
  74. [74] Item 1, Business — Trends and Uncertainties — Legislative Developments — One Big Beautiful Bill Act
  75. [75] Item 1, Business — Trends and Uncertainties — Legislative Developments — One Big Beautiful Bill Act
  76. [76] Item 1, Business — Trends and Uncertainties — Legislative Developments — One Big Beautiful Bill Act
  77. [77] Item 1, Business — Strategy
  78. [78] Item 1, Business — Key Developments
  79. [79] Item 1, Business — Strategy
  80. [80] Item 1, Business — Strategy
  81. [81] Item 1, Business — Strategy
  82. [82] Item 1, Business — Strategy
  83. [83] Item 1, Business — Strategy
  84. [84] Item 7, MD&A — Consolidated Results — General and Administrative Expenses
  85. [85] Item 7, MD&A — Consolidated Results — General and Administrative Expenses
  86. [86] Item 1, Business — Information Technology
  87. [87] Item 1, Business — Information Technology
  88. [88] Item 1, Business — Information Technology
  89. [89] Item 1, Business — Information Technology
  90. [90] Item 7, MD&A — Future Sources and Uses of Liquidity — Future Uses — Common Stock Purchases
  91. [91] Item 7, MD&A — Future Sources and Uses of Liquidity — Future Uses — Common Stock Purchases
  92. [92] Item 8, Note 13 — Stockholders' Equity — Stock Purchase Programs
  93. [93] Item 7, MD&A — Future Sources and Uses of Liquidity — Future Uses — Common Stock Purchases
  94. [94] Item 7, MD&A — Future Sources and Uses of Liquidity — Future Uses — Common Stock Purchases
  95. [95] Item 1, Business — Strategy
  96. [96] Item 5, Market for Registrant's Common Equity — Stock Trading Symbol and Dividends
  97. [97] Item 5, Market for Registrant's Common Equity — Stock Trading Symbol and Dividends
  98. [98] Item 1, Business — Strategy
  99. [99] Item 1, Business — Strategy
  100. [100] Item 1, Business — Strategy
  101. [101] Item 1, Business — Strategy
  102. [102] Item 1, Business — Strategy
  103. [103] Item 1, Business — Strategy
  104. [104] Item 1, Business — Our Business — Medicare — MAPD Exit
  105. [105] Item 1, Business — Our Business — Medicare — MAPD Exit
  106. [106] Item 1, Business — Our Business — Medicare — MAPD Exit
  107. [107] Item 1, Business — Our Business — Medicare — MAPD Exit
  108. [108] Item 1, Business — Our Business — Medicare — MAPD Exit
  109. [109] Item 8, Note 1 — Organization and Basis of Presentation
  110. [110] Item 8, Note 1 — Organization and Basis of Presentation
  111. [111] Item 1A, Risk Factors — Risks Related to Our Business — The Medicaid rates paid to us by states may be insufficient
  112. [112] Item 1A, Risk Factors — Risks Related to Our Business — Our Marketplace business has been volatile and unpredictable
  113. [113] Item 1A, Risk Factors — Risks Related to Our Business — Our health plans operate with very low profit margins
  114. [114] Item 1A, Risk Factors — Risks Related to Our Business — If we lose contracts that constitute a significant amount of our premium revenue
  115. [115] Item 1A, Risk Factors — Risks Related to Our Business — If we lose contracts that constitute a significant amount of our premium revenue
  116. [116] Item 1, Business — Trends and Uncertainties — Legislative Developments — One Big Beautiful Bill Act
  117. [117] Item 1, Business — Strategy
  118. [118] Item 1, Business — Strategy
  119. [119] Item 1, Business — Strategy
  120. [120] Item 1, Business — Strategy
  121. [121] Item 1, Business — Strategy
  122. [122] Item 1, Business — Strategy
  123. [123] Item 1, Business — Strategy
  124. [124] Item 1, Business — Strategy
  125. [125] Item 1, Business — Strategy
  126. [126] Item 1, Business — Strategy
  127. [127] Item 1, Business — Strategy
  128. [128] Item 1, Business — Strategy
  129. [129] Item 7, MD&A — Financial Results Summary
  130. [130] Item 7, MD&A — Financial Results Summary
  131. [131] Item 7, MD&A — Financial Results Summary
  132. [132] Item 7, MD&A — Financial Results Summary
  133. [133] Item 7, MD&A — Financial Results Summary
  134. [134] Item 7, MD&A — Financial Results Summary
  135. [135] Item 7, MD&A — Financial Results Summary
  136. [136] Item 7, MD&A — Financial Results Summary
  137. [137] Item 7, MD&A — Financial Results Summary
  138. [138] Item 7, MD&A — Financial Results Summary
  139. [139] Item 7, MD&A — Financial Results Summary
  140. [140] Item 7, MD&A — Financial Results Summary
  141. [141] Item 7, MD&A — Financial Results Summary
  142. [142] Item 7, MD&A — Financial Results Summary
  143. [143] Item 7, MD&A — Consolidated Results — Interest Expense
  144. [144] Item 7, MD&A — Consolidated Results — Interest Expense
  145. [145] Item 7, MD&A — Consolidated Results — Income Taxes
  146. [146] Item 7, MD&A — Consolidated Results — Income Taxes
  147. [147] Item 7, MD&A — Consolidated Results — Income Taxes
  148. [148] Item 7, MD&A — Consolidated Results — Income Taxes
  149. [149] Item 7, MD&A — Consolidated Results — Income Taxes
  150. [150] Item 8, Consolidated Balance Sheets
  151. [151] Item 8, Consolidated Balance Sheets
  152. [152] Item 8, Consolidated Balance Sheets
  153. [153] Item 8, Consolidated Balance Sheets
  154. [154] Item 8, Consolidated Balance Sheets
  155. [155] Item 8, Consolidated Balance Sheets
  156. [156] Item 7, MD&A — Reportable Segments — Segment Financial Performance
  157. [157] Item 7, MD&A — Reportable Segments — Segment Financial Performance
  158. [158] Item 7, MD&A — Reportable Segments — Segment Financial Performance
  159. [159] Item 7, MD&A — Reportable Segments — Segment Financial Performance
  160. [160] Item 7, MD&A — Reportable Segments — Segment Financial Performance
  161. [161] Item 7, MD&A — Reportable Segments — Segment Financial Performance
  162. [162] Item 7, MD&A — Reportable Segments — Segment Financial Performance
  163. [163] Item 7, MD&A — Reportable Segments — Segment Financial Performance
  164. [164] Item 7, MD&A — Reportable Segments — Segment Financial Performance

Analysis on 6/9/2026