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Analysis

Molina Healthcare Posts Mixed Earnings for 2019

By Jack O'Brien  
   February 10, 2020

The Long Beach, California–based insurer missed on revenues but boosted its year-end net income year-over-year.

Molina Healthcare saw its year-end premium revenues decline by more than $1 billion, according to the insurer's latest earnings report released Monday afternoon.

The company reported premium revenues of $16.2 billion at the end of 2019, down from $17.6 billion at the end of 2018. Additionally, the company's total revenue fell from $18.8 billion to $16.8 billion over the course of 2019.

The Long Beach, California–based insurer did see its net income for 2019 rise by $30 million, but its pre-tax income fell by $27 million as well. 

In another bright spot, Molina's diluted earnings per share (EPS) rose from $10.61 at the end of 2018 to $11.47 at the end of 2019.

C-SUITE PERSPECTIVE: 

"We are pleased with our fourth quarter and full year results. We improved our Medicaid and Medicare margins and achieved exceptional Marketplace margins. Overall, we delivered 4.4 percent after-tax margins and earnings per share growth of 8 percent," Joe Zubretsky, CEO of Molina Healthcare, said in a statement. "Going forward, 2020 represents an important year in our pivot to growth strategy with a return to top-line growth. Each of our three business lines are well positioned to grow in 2020 and beyond."

During Q4 2019, Molina's cash and investments rose just over $200 million, totaling $997 million.

For 2020, Molina projects its premium revenue will be near $17.4 billion, its EPS will be between $11.20 to $11.70, and its total membership will be around 3.4 million.

Related: Revenues, Income, and EPS Fall for Molina Healthcare

At the start of 2020, WFPL reported that Molina is aiming to win a Medicaid contract from the state of Kentucky that had been put on hold by Passport Health Plan, a nonprofit insurer, almost one year earlier.

Related: Molina Healthcare Pursues Passport's West End Site Along With State Contract

In early January, Molina announced that it had entered a definitive agreement to purchase NextLevel Health Partners Inc., a Chicago-based Medicaid managed care organization. 

Upon completion of the deal, the insurer will serve NextLevel Health Partners' 50,000 members in northern Illinois.

Related: Molina Healthcare to Buy Chicago-Based Medicaid MCO

Operating cash flows for Molina at the end of 2019 totaled $427 million, higher than cash flows as the end of 2018 due to "normal fluctuations in timing of premium receipts."

ADDITIONAL MOLINA Q3 EARNINGS REPORT HIGHLIGHTS:  

  • The insurer's net income margin was 3.9% for Q4 2019, down from 4.3% in Q4 2018.
  • The company's medical care ratio rose from 85.1% in Q4 2018 to 86% in Q4 2019.
  • For Q4, the company received $305 million in dividends from health plan subsidiaries.

For complete financial information, review Molina's filing with the Securities and Exchange Commission.

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.

Photo credit: KIEV, UKRAINE - Dec 18, 2018: Molina Healthcare company logo seen displayed on smartphone - Image / Editorial credit: IgorGolovniov / Shutterstock.com


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