Molina Healthcare, Inc. (NYSE: MOH):
- Full year 2015 net income per diluted
share of $2.57, up nearly 100% over 2014.
- Full year 2015 total revenue of $14.1
billion, up 46% over 2014.
- Aggregate membership up 35% over
2014.
- Excluding a contract settlement charge
of $0.16 per diluted share, diluted net income per share for the
fourth quarter of 2015 would have been $0.67 compared with $0.69
for the fourth quarter of 2014.
Molina Healthcare, Inc. (NYSE: MOH) today reported its financial
results for the fourth quarter of 2015.
“The fourth quarter of 2015 capped off a very strong year for
Molina Healthcare. Net income more than doubled compared with
2014, and we are making progress toward our goal of a 1.5% to 2%
net income margin by the end of 2017,” said J. Mario Molina M.D.,
chief executive officer of Molina Healthcare, Inc. “The
in-market ‘tuck-in’ acquisitions already announced give us strong
momentum going into 2016 and complement the already strong revenue
growth we experienced over the past two years. I want to thank
all of our employees for a great year.”
2016 Business Outlook and Investor Meeting
As has been the Company’s past practice, it will discuss its
2016 business outlook and strategy at its Investor Day Conference
webcast and presentation to be held on February 11, 2016, at the Le
Parker Meridien Hotel in New York City from 12:30 p.m. to 4:30 p.m.
Eastern Time. The Company will webcast the presentations offered by
its management team, which will be followed by question-and-answer
sessions. A 30-day online replay of the Investor Day meeting will
be available approximately one hour following the conclusion of the
live webcast. A link to this webcast can be found on the Company’s
website at molinahealthcare.com.
Overview of 2015 Financial Results, Continuing
Operations
Earnings per diluted share nearly doubled in 2015 when compared
with 2014, while net income more than doubled. Substantial
increases in revenue, along with improved operating efficiency,
were responsible for the Company’s improved performance. The
Company’s after-tax margin increased to 1.0% in 2015 from 0.6% in
2014.
Strong enrollment growth combined with a 4% increase in premium
revenue per member generated over $4 billion, or 46% more premium
revenue in 2015 compared with 2014.
Enrollment growth was primarily due to increased Medicaid
Expansion, Marketplace and integrated Medicare-Medicaid Plan (MMP)
enrollment, and the start-up of the Puerto Rico health plan in
April 2015.
Medical care costs as a percent of premium revenue (the “medical
care ratio”) decreased to 89.0% in 2015, from 89.5% in 2014.
General and administrative expenses as a percentage of total
revenue (the “general and administrative expense ratio”) increased
slightly to 8.2% in 2015, from 7.9% in 2014, primarily as a result
of dramatic growth in the Company’s Marketplace membership.
Excluding Marketplace broker and exchange fees from both years, the
general and administrative expense ratio decreased to 7.5% in 2015
from 7.8% in 2014.
Other items affecting premium revenue in 2015 included the
Affordable Care Act health insurer fee (HIF). During 2015, the
Company secured full reimbursement for its expenses under the HIF.
Additionally, as the Company has previously disclosed, it has been
unable to recognize certain quality related revenue at its Texas
health plan because it does not have historical information, clear
definitions, and clarity around minimum standards. The Company
recognized no such revenue in either the fourth quarter of 2015, or
the year as a whole.
Fourth Quarter Developments
Fourth quarter results were favorable for the reasons explained
above. The following items are included in results for the fourth
quarter of 2015:
- During the quarter, the Company
recorded a contract settlement charge of approximately $15 million
($0.16 per diluted share) as a result of its termination of a
hospital management agreement.
- During the fourth quarter of 2015, the
Company recognized approximately $6 million ($0.07 per diluted
share) of interest expense related to $700 million of senior notes
due 2022 issued in November.
- General and administrative expense for
the fourth quarter 2015 includes approximately $3 million ($0.03
per diluted share) in transaction costs for business
acquisitions.
Conference Call
The Company’s management will host a conference call and webcast
to discuss its fourth quarter and year-end results at 5:00 p.m.
Eastern time on Monday, February 8, 2016. The number to call for
the interactive teleconference is (212) 271-4657. A telephonic
replay of the conference call will be available from 7:00 p.m.
Eastern time on Monday, February 8, 2016, through 6:00 p.m. on
Tuesday, February 9, 2016, by dialing (800) 633-8284 and entering
confirmation number 21802135. A live audio broadcast of Molina
Healthcare’s conference call will be available on the Company’s
website, molinahealthcare.com. A 30-day online replay will be
available approximately an hour following the conclusion of the
live broadcast.
About Molina Healthcare
Molina Healthcare, Inc., a FORTUNE 500 company, provides managed
health care services under the Medicaid and Medicare programs and
through the state insurance marketplaces. Through our locally
operated health plans in 11 states across the nation and in the
Commonwealth of Puerto Rico, Molina currently serves approximately
3.5 million members. Dr. C. David Molina founded our company in
1980 as a provider organization serving low-income families in
Southern California. Today, we continue his mission of providing
high quality and cost-effective health care to those who need it
most. For more information about Molina Healthcare, please visit
our website at molinahealthcare.com.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995: This earnings release contains
"forward-looking statements" regarding the Company’s plans,
expectations, and anticipated future events. Actual results could
differ materially due to numerous known and unknown risks and
uncertainties. Those known risks and uncertainties include, but are
not limited, to the following:
- uncertainties and evolving market and
provider economics associated with the implementation of the
Affordable Care Act, the Medicaid expansion, the insurance
marketplaces, the effect of various implementing regulations, and
uncertainties regarding the Medicare-Medicaid dual eligible
demonstration programs in California, Illinois, Michigan, Ohio,
South Carolina, and Texas;
- management of our medical costs,
including seasonal flu patterns and rates of utilization that are
consistent with our expectations, and our ability to reduce over
time the high medical costs commonly associated with new patient
populations;
- federal or state medical cost
expenditure floors, administrative cost and profit ceilings,
premium stabilization programs, profit sharing arrangements, and
conflicting interpretations thereof;
- the interpretation and implementation
of at-risk premium rules regarding the achievement of certain
quality measures;
- cyber-attacks or other privacy or data
security incidents resulting in an inadvertent unauthorized
disclosure of protected health information;
- the success of our new health plan in
Puerto Rico, including the successful resolution of the Puerto Rico
debt crisis and the payment of all amounts due under our Medicaid
contract;
- specialty drugs or generic drugs that
are exorbitantly priced but not factored into the calculation of
our capitated rates;
- significant budget pressures on state
governments and their potential inability to maintain current
rates, to implement expected rate increases, or to maintain
existing benefit packages or membership eligibility thresholds or
criteria, including the resolution of the Illinois budget impasse
and continued payment of our Illinois health plan;
- the accurate estimation of incurred but
not reported or paid medical costs across our health plans;
- retroactive adjustments to premium
revenue or accounting estimates which require adjustment based upon
subsequent developments;
- efforts by states to recoup previously
paid amounts;
- the success of our efforts to retain
existing government contracts and to obtain new government
contracts in connection with state requests for proposals (RFPs) in
both existing and new states;
- the continuation and renewal of the
government contracts of both our health plans and Molina Medicaid
Solutions and the terms under which such contracts are
renewed;
- complications, member confusion, or
enrollment backlogs related to the annual renewal of Medicaid
coverage;
- government audits and reviews, and any
fine, enrollment freeze, or monitoring program that may result
therefrom;
- changes with respect to our provider
contracts and the loss of providers;
- approval by state regulators of
dividends and distributions by our health plan subsidiaries;
- changes in funding under our contracts
as a result of regulatory changes, programmatic adjustments, or
other reforms;
- high dollar claims related to
catastrophic illness;
- the favorable resolution of litigation,
arbitration, or administrative proceedings;
- the relatively small number of states
in which we operate health plans;
- the effect on our Los Angeles County
subcontract of Centene’s acquisition of Health Net;
- 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
liquidity needs, including the interest expense and other costs
associated with such financing;
- the failure of a state in which we
operate to renew its federal Medicaid waiver;
- changes generally affecting the managed
care or Medicaid management information systems industries;
- increases in government surcharges,
taxes, and assessments;
- newly emergent viruses or widespread
epidemics, including the Zika virus, and associated public
alarm;
- changes in general economic conditions,
including unemployment rates;
- the sufficiency of our funds, on hand
to pay the amounts due upon conversion of our outstanding
notes;
- increasing competition and
consolidation in the Medicaid industry;
and numerous other risk factors, including those discussed in
the Company’s periodic reports and filings with the Securities and
Exchange Commission. These reports can be accessed under the
investor relations tab of the Company’s website or on the SEC’s
website at sec.gov. Given these risks and uncertainties, we can
give no assurances that the Company’s forward-looking statements
will prove to be accurate, or that any other results or events
projected or contemplated by the Company’s forward-looking
statements will in fact occur, and we caution investors not to
place undue reliance on these statements. All forward-looking
statements in this release represent the Company’s judgment as of
February 8, 2016, and we disclaim any obligation to update any
forward-looking statements to conform the statement to actual
results or changes in the Company’s expectations.
MOLINA HEALTHCARE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF
INCOME
Three Months Ended Year Ended December
31, December 31, 2015 2014
2015 2014 (Dollar amounts in
millions, except net income per share) Revenue: Premium revenue
$ 3,488 $ 2,599 $ 13,140 $ 9,023 Service revenue 106 54 252 210
Premium tax revenue 104 91 393 294 Health insurer fee revenue 61 52
264 120 Investment income 6 2 18 8 Other revenue — 4
5 12 Total revenue 3,765 2,802 14,072
9,667 Operating expenses: Medical care costs 3,110
2,322 11,691 8,076 Cost of service revenue 90 39 193 157 General
and administrative expenses 317 205 1,147 765 Premium tax expenses
104 91 393 294 Health insurer fee expenses 40 23 157 89
Depreciation and amortization 28 25 104 93
Total operating expenses 3,689 2,705 13,685
9,474 Operating income 76 97 387
193 Other expenses, net: Interest expense 22 15 67 57 Other
(income) expense, net (2 ) — (2 ) 1 Total other
expenses, net 20 15 65 58 Income from
continuing operations before income tax expense 56 82 322 135
Income tax expense 26 48 179 73 Income
from continuing operations 30 34 143 62
Net income $ 30 $ 34 $ 143 $ 62
Diluted net income per share: (1) Income from continuing operations
$ 0.51 $ 0.69 $ 2.57 $ 1.30 Loss from discontinued operations —
— — (0.01 ) Diluted net income per share $
0.51 $ 0.69 $ 2.57 $ 1.29
Diluted weighted average shares outstanding 57.7 48.9
55.6 48.3
Operating Statistics, Continuing
Operations: (1) Medical care ratio (2) 89.2 % 89.4 % 89.0 %
89.5 % Service revenue ratio (3) 84.7 % 72.6 % 76.4 % 74.6 %
General and administrative expense ratio (4) 8.4 % 7.3 % 8.2 % 7.9
% Premium tax ratio (2) 2.9 % 3.4 % 2.9 % 3.2 % Effective tax rate
47.0 % 58.6 % 55.5 % 53.8 % Net profit margin, continuing
operations (4) 0.8 % 1.2 % 1.0 % 0.6 % ____________ (1) Source data
for calculations in thousands. (2) Medical care ratio represents
medical care costs as a percentage of premium revenue; premium tax
ratio represents premium tax expenses as a percentage of premium
revenue plus premium tax revenue. Medical care costs include costs
incurred for providing long term services and supports (LTSS). (3)
Service revenue ratio represents cost of service revenue as a
percentage of service revenue. (4) Computed as a percentage of
total revenue.
MOLINA HEALTHCARE, INC.
UNAUDITED CONSOLIDATED BALANCE
SHEETS
December 31, 2015 2014
(Amounts in millions,except per-share data)
ASSETS Current assets: Cash and cash equivalents $ 2,329 $
1,539 Investments 1,801 1,019 Receivables 597 596 Income taxes
refundable 13 — Prepaid expenses and other current assets 192 49
Derivative asset 374 — Total current assets 5,306
3,203 Property, equipment, and capitalized software, net 393 341
Deferred contract costs 81 54 Intangible assets, net 122 89
Goodwill 519 272 Restricted investments 109 102 Derivative asset —
329 Deferred income taxes 18 15 Other assets 28 30 $
6,576 $ 4,435
LIABILITIES AND STOCKHOLDERS’
EQUITY Current liabilities: Medical claims and benefits payable
$ 1,582 $ 1,201 Amounts due government agencies 834 527 Accounts
payable and accrued liabilities 360 242 Deferred revenue 223 196
Income taxes payable — 9 Current portion of long-term debt 449 —
Derivative liability 374 — Total current liabilities
3,822 2,175 Senior notes 962 690 Lease financing obligations 198
157 Lease financing obligations - related party — 40 Derivative
liability — 329 Other long-term liabilities 37 34
Total liabilities 5,019 3,425 Stockholders’ equity:
Common stock, $0.001 par value; 150 shares authorized; outstanding:
56 shares at December 31, 2015 and 50 shares at December 31, 2014 —
— Preferred stock, $0.001 par value; 20 shares authorized, no
shares issued and outstanding — — Additional paid-in capital 803
396 Accumulated other comprehensive loss (4 ) (1 ) Retained
earnings 758 615 Total stockholders’ equity 1,557
1,010 $ 6,576 $ 4,435 ____________
Note: Certain 2014 amounts have been reclassified to conform to the
2015 presentation. Specifically, current and non-current deferred
issuance costs are now reported as direct deductions from “Current
portion of long-term debt,” and “Senior notes,” respectively.
Additionally, the aggregate amount of deferred income taxes are now
reported as non-current. Both reclassifications are a result of
recently adopted accounting pronouncements.
MOLINA HEALTHCARE, INC.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS,
CONTINUING AND DISCONTINUED
OPERATIONS
Three Months Ended Year Ended December
31, December 31, 2015 2014
2015 2014 (Amounts in millions)
Operating activities: Net income $ 30 $ 34 $ 143 $ 62 Adjustments
to reconcile net income to net cash provided by operating
activities: Depreciation and amortization 33 35 126 134 Deferred
income taxes 5 9 (7 ) (2 ) Share-based compensation 7 6 23 22
Amortization of convertible senior notes and lease financing
obligations 8 7 30 27 Other, net 6 3 19 7 Changes in operating
assets and liabilities: Receivables 79 (171 ) 56 (298 ) Prepaid
expenses and other current assets 28 32 (35 ) (20 ) Medical claims
and benefits payable 20 77 379 531 Amounts due government agencies
(146 ) 129 307 470 Accounts payable and accrued liabilities 48 37
82 11 Deferred revenue 153 5 24 74 Income taxes (52 ) 17 (22
) 42 Net cash provided by operating activities 219
220 1,125 1,060 Investing activities:
Purchases of investments (612 ) (337 ) (1,923 ) (953 ) Proceeds
from sales and maturities of investments 263 159 1,126 633
Purchases of property, equipment, and capitalized software (31 )
(43 ) (132 ) (115 ) Increase in restricted investments (1 ) (10 )
(6 ) (34 ) Net cash paid in business combinations (373 ) (36 ) (450
) (44 ) Other, net (1 ) (8 ) (35 ) (23 ) Net cash used in investing
activities (755 ) (275 ) (1,420 ) (536 ) Financing
activities: Proceeds from senior notes offerings, net of issuance
costs 689 — 689 123 Proceeds from common stock offering, net of
issuance costs — — 373 — Contingent consideration liabilities
settled — — — (50 ) Proceeds from employee stock plans 10 6 18 14
Principal payments on convertible senior notes — (10 ) — (10 )
Other, net 2 — 5 2 Net cash provided by
(used in) financing activities 701 (4 ) 1,085 79
Net increase (decrease) in cash and cash equivalents 165 (59
) 790 603 Cash and cash equivalents at beginning of period 2,164
1,598 1,539 936 Cash and cash
equivalents at end of period $ 2,329 $ 1,539 $ 2,329
$ 1,539
MOLINA HEALTHCARE, INC.UNAUDITED
NON-GAAP FINANCIAL MEASURES
The Company uses two non-GAAP financial measures as supplemental
metrics in evaluating its financial performance, making financing
and business decisions, and forecasting and planning for future
periods. For these reasons, management believes such measures are
useful supplemental measures to investors in comparing the
Company’s performance to the performance of other public companies
in the health care industry. These non-GAAP financial measures
should be considered as supplements to, and not as substitutes for
or superior to, GAAP measures.
The first of these non-GAAP measures is earnings before
interest, taxes, depreciation and amortization (EBITDA). The
following table reconciles net income, which the Company believes
to be the most comparable GAAP measure, to EBITDA.
Three Months Ended Year
Ended December 31, December 31, 2015
2014 2015 2014
(Amounts in millions) Net income $ 30 $ 34 $ 143 $ 62
Adjustments: Depreciation, and amortization of intangible assets
and capitalized software 33 30 120 114 Interest expense 22 15 67 57
Income tax expense 26 48 179 72 EBITDA $ 111
$ 127 $ 509 $ 305
The second of these non-GAAP measures is adjusted net income,
continuing operations (including adjusted net income per diluted
share). The following table reconciles net income from continuing
operations, which the Company believes to be the most comparable
GAAP measure, to adjusted net income, continuing operations. The
source data for per diluted share calculations below is in
thousands.
Three Months Ended December 31,
Year Ended December 31, 2015
2014 2015 2014 (In millions,
except per diluted share amounts) Amount Per
share Amount Per share Amount Per share
Amount Per share Net income, continuing operations $
30 $ 0.51 $ 34 $ 0.69 $ 143 $ 2.57 $ 62 $ 1.30 Adjustments, net of
tax: Amortization of convertible senior notes and lease financing
obligations 5 0.08 4 0.09 19 0.34 17 0.36 Amortization of
intangible assets 3 0.06 3 0.06 11
0.20 13 0.27 Adjusted net income, continuing
operations (1) $ 38 $ 0.65 $ 41 $ 0.84
$ 173 $ 3.11 $ 92 $ 1.93
________________________ (1) Beginning in the first quarter of
2015, the Company revised its calculation of adjusted net income,
continuing operations. The Company no longer subtracts
“depreciation, and amortization of capitalized software” and
“share-based compensation” from net income, continuing operations
to arrive at adjusted net income, continuing operations. The
Company made this change to better reflect the way in which it
evaluates its financial performance, makes financing and business
decisions, and forecasts and plans for future periods. All periods
presented conform to this presentation.
MOLINA HEALTHCARE, INC.
UNAUDITED HEALTH PLANS SEGMENT
MEMBERSHIP, CONTINUING OPERATIONS
As of December 31, 2015
2014 2013 Ending Membership by
Health Plan: California 620,000 531,000 368,000 Florida 440,000
164,000 89,000 Illinois 98,000 100,000 4,000 Michigan 328,000
242,000 213,000 New Mexico 231,000 212,000 168,000 Ohio 327,000
347,000 255,000 Puerto Rico (1) 348,000 — — South Carolina 99,000
118,000 — Texas 260,000 245,000 252,000 Utah 102,000 83,000 86,000
Washington 582,000 497,000 403,000 Wisconsin 98,000 84,000
93,000 3,533,000 2,623,000 1,931,000
Ending
Membership by Program: Temporary Assistance for Needy Families
(TANF), CHIP(2) 2,312,000 1,809,000 1,603,000 Medicaid Expansion(3)
557,000 385,000 — Aged, Blind or Disabled (ABD) 366,000 347,000
289,000 Marketplace(3) 205,000 15,000 — Medicare-Medicaid Plan
(MMP) - Integrated(4) 51,000 18,000 — Medicare Special Needs Plans
42,000 49,000 39,000 3,533,000 2,623,000
1,931,000 _______________________ (1) The Puerto Rico health
plan began serving members effective April 1, 2015. (2) CHIP stands
for Children’s Health Insurance Program. (3) Medicaid Expansion
membership phased in, and Marketplace became available for
consumers to access coverage, beginning January 1, 2014. (4) MMP
members who receive both Medicaid and Medicare coverage from the
Company. The Company began serving members under this program in
the second quarter of 2014.
MOLINA HEALTHCARE, INC.
UNAUDITED SELECTED HEALTH PLANS SEGMENT
FINANCIAL DATA,
CONTINUING OPERATIONS
(In millions, except percentages and
per-member per-month amounts)
Three Months Ended December 31, 2015 Member
Months(1)
Premium Revenue Medical Care
Costs MCR(2)
MedicalMargin
Total PMPM Total
PMPM California 1.8 $ 563 $ 309.31 $ 474 $ 260.44 84.2 % $
89 Florida 1.2 329 277.71 318 268.98 96.9 11 Illinois 0.3 85 287.88
79 266.91 92.7 6 Michigan 1.0 329 334.44 282 287.00 85.8 47 New
Mexico 0.7 304 438.82 263 379.10 86.4 41 Ohio 1.0 500 501.11 437
436.77 87.2 63 Puerto Rico 1.1 192 184.79 159 153.04 82.8 33 South
Carolina 0.3 78 261.07 69 229.48 87.9 9 Texas 0.7 543 693.06 496
633.77 91.4 47 Utah 0.4 89 290.05 77 251.55 86.7 12 Washington 1.7
416 241.28 376 217.77 90.3 40 Wisconsin 0.3 55 186.57 53 182.41
97.8 2 Other(3) — 5 — 27 — — (22 ) 10.5
$ 3,488 $ 334.62 $ 3,110 $ 298.43 89.2 % $ 378
Three Months Ended December 31, 2014
Member
Months(1)
Premium Revenue Medical Care Costs
MCR(2)
MedicalMargin
Total PMPM Total PMPM California 1.6 $
463 $ 291.27 $ 379 $ 238.49 81.9 % $ 84 Florida 0.4 126 348.60 129
356.76 102.3 (3 ) Illinois 0.2 84 353.71 78 323.76 91.5 6 Michigan
0.7 213 294.14 185 254.41 86.5 28 New Mexico 0.7 299 456.40 294
448.99 98.4 5 Ohio 1.1 492 475.15 426 412.02 86.7 66 Puerto Rico —
— — — — — — South Carolina 0.4 93 263.97 73 208.10 78.8 20 Texas
0.8 339 458.42 299 404.88 88.3 40 Utah 0.2 76 300.28 69 277.44 92.4
7 Washington 1.4 364 246.91 342 232.08 94.0 22 Wisconsin 0.2 38
148.99 36 139.75 93.8 2 Other(3) — 12 — 12 — —
— 7.7 $ 2,599 $ 338.52 $ 2,322 $ 302.60
89.4 % $ 277 ____________ (1) A member month is defined as
the aggregate of each month’s ending membership for the period
presented. (2) The MCR represents medical costs as a percentage of
premium revenue. Source data in thousands. (3) “Other” medical care
costs include primarily medically related administrative costs at
the parent company, and direct delivery costs.
MOLINA HEALTHCARE, INC.
UNAUDITED SELECTED HEALTH PLANS SEGMENT
FINANCIAL DATA,
CONTINUING OPERATIONS
(In millions, except percentages and
per-member per-month amounts)
Year Ended December 31, 2015 Member
Months(1)
Premium Revenue Medical Care
Costs MCR(2)
MedicalMargin
Total PMPM Total
PMPM California 7.1 $ 2,101 $ 296.93 $ 1,823 $ 257.67 86.8 %
$ 278 Florida 4.1 1,197 289.38 1,081 261.49 90.4 116 Illinois 1.2
397 328.93 367 303.72 92.3 30 Michigan 3.4 1,067 317.15 903 268.27
84.6 164 New Mexico 2.8 1,237 446.27 1,106 398.98 89.4 131 Ohio 4.1
2,034 499.34 1,718 421.61 84.4 316 Puerto Rico 3.2 567 178.31 505
158.80 89.1 62 South Carolina 1.3 348 267.25 278 213.30 79.8 70
Texas 3.1 1,961 621.25 1,809 573.32 92.3 152 Utah 1.2 331 286.22
300 259.32 90.6 31 Washington 6.6 1,602 242.36 1,470 222.36 91.7
132 Wisconsin 1.2 261 213.48 215 176.01 82.4 46 Other(3) —
37 — 116 — — (79 ) 39.3 $ 13,140 $
334.71 $ 11,691 $ 297.81 89.0 % $ 1,449
Year Ended December 31, 2014 Member
Months(1)
Premium Revenue Medical Care Costs
MCR(2)
MedicalMargin
Total PMPM Total PMPM California 5.6 $
1,523 $ 270.51 $ 1,269 $ 225.37 83.3 % $ 254 Florida 1.1 439 397.79
419 379.95 95.5 20 Illinois 0.3 153 498.48 141 456.88 91.7 12
Michigan 2.8 781 278.68 661 235.81 84.6 120 New Mexico 2.5 1,076
435.17 996 402.92 92.6 80 Ohio 3.7 1,553 425.47 1,335 365.87 86.0
218 Puerto Rico — — — — — — — South Carolina 1.5 381 260.72 323
220.89 84.7 58 Texas 3.0 1,318 442.32 1,197 401.81 90.8 121 Utah
1.0 310 310.64 285 286.43 92.2 25 Washington 5.5 1,305 236.27 1,219
220.75 93.4 86 Wisconsin 1.0 156 150.87 136 130.91 86.8 20 Other(3)
— 28 — 95 — — (67 ) 28.0 $ 9,023
$ 322.68 $ 8,076 $ 288.84 89.5 % $ 947 ____________
(1) A member month is defined as the aggregate of each month’s
ending membership for the period presented. (2) The MCR represents
medical costs as a percentage of premium revenue. Source data in
thousands. (3) “Other” medical care costs include primarily
medically related administrative costs at the parent company, and
direct delivery costs.
MOLINA HEALTHCARE, INC.
UNAUDITED SELECTED HEALTH PLANS SEGMENT
FINANCIAL DATA,
CONTINUING OPERATIONS
(In millions, except percentages and
per-member per-month amounts)
Three Months Ended December 31, 2015 (1)
Member
Months(2)
Premium Revenue Medical Care
Costs MCR(3)
MedicalMargin
Total PMPM Total
PMPM TANF and CHIP 6.9 $ 1,203 $ 175.96 $ 1,092 $ 159.83
90.8 % $ 111 Medicaid Expansion 1.7 637 386.27 503 305.28 79.0 134
ABD 1.1 1,059 967.72 995 910.11 94.0 64 Marketplace 0.6 126 223.57
111 194.80 87.1 15 MMP 0.1 330 2,160.91 290 1,905.00 88.2 40
Medicare 0.1 133 1,076.00 119 954.40 88.7 14
10.5 $ 3,488 $ 334.62 $ 3,110 $ 298.43 89.2 %
$ 378
Year Ended December 31, 2015 (1)
Member
Months(2)
Premium Revenue Medical Care Costs
MCR(3)
MedicalMargin
Total PMPM Total PMPM TANF and CHIP
25.5 $ 4,483 $ 175.64 $ 4,122 $ 161.50 92.0 % $ 361 Medicaid
Expansion 5.9 2,291 391.62 1,828 312.58 79.8 463 ABD 4.3 4,122
966.37 3,784 887.27 91.8 338 Marketplace 2.6 651 251.96 481 185.85
73.8 170 MMP 0.5 1,063 2,033.76 974 1,863.93 91.6 89 Medicare 0.5
530 1,038.15 502 982.50 94.6 28 39.3 $
13,140 $ 334.71 $ 11,691 $ 297.81 89.0 % $ 1,449
_______________________ (1) Three and twelve months ended December
31, 2014 data not presented due to lack of comparability. (2) A
member month is defined as the aggregate of each month’s ending
membership for the period presented. (3) The MCR represents medical
costs as a percentage of premium revenue. Source data in thousands.
MOLINA HEALTHCARE, INC.
UNAUDITED SELECTED HEALTH PLANS SEGMENT
FINANCIAL DATA,
CONTINUING OPERATIONS
(In millions, except percentages and
per-member per-month amounts)
The following tables provide the details
of the Company’s medical care costs from continuing operations for
the periods indicated:
Three Months Ended December 31, 2015
2014 Amount PMPM
% of
Total
Amount PMPM % of
Total
Fee for service $ 2,297 $ 220.34 73.9 % $ 1,644 $ 214.14 70.8 %
Pharmacy 449 43.08 14.4 354 46.12 15.3 Capitation 257 24.69 8.3 211
27.60 9.1 Direct delivery 43 4.14 1.4 26 3.42 1.1 Other 64
6.18 2.0 87 11.32 3.7 $ 3,110
$ 298.43 100.0 % $ 2,322 $ 302.60 100.0
%
Year Ended December 31, 2015
2014 Amount PMPM % of
Total
Amount PMPM % of
Total
Fee for service $ 8,572 $ 218.35 73.3 % $ 5,673 $ 202.87 70.2 %
Pharmacy 1,610 41.01 13.8 1,273 45.54 15.8 Capitation 982 25.02 8.4
748 26.77 9.3 Direct delivery 128 3.26 1.1 96 3.44 1.2 Other 399
10.17 3.4 286 10.22 3.5 $
11,691 $ 297.81 100.0 % $ 8,076 $ 288.84
100.0 %
The following table provides the details
of the Company’s medical claims and benefits payable as of the
dates indicated:
December 31, 2015 2014
Fee-for-service claims incurred but not paid (IBNP) $ 1,191 $ 871
Pharmacy payable 88 71 Capitation payable 37 28 Other (1) 266
231 $ 1,582 $ 1,201 ______________________ (1)
“Other” medical claims and benefits payable include amounts payable
to certain providers for which the Company acts as an intermediary
on behalf of various state agencies without assuming financial
risk. Such receipts and payments do not impact the Company’s
consolidated statements of income. As of December 31, 2015 and
2014, the Company had recorded non-risk provider payables of
approximately $167 million and $119 million, respectively.
MOLINA HEALTHCARE, INC.UNAUDITED
CHANGE IN MEDICAL CLAIMS AND BENEFITS PAYABLE(Dollars in
millions, except per-member amounts)
The Company’s claims liability includes a
provision for adverse claims deviation based on historical
experience and other factors including, but not limited to,
variations in claims payment patterns, changes in utilization and
cost trends, known outbreaks of disease, and large claims. The
Company’s reserving methodology is consistently applied across all
periods presented. The amounts displayed for “Components of medical
care costs related to: Prior period” represent the amount by which
the Company’s original estimate of claims and benefits payable at
the beginning of the period were more than the actual amount of the
liability based on information (principally the payment of claims)
developed since that liability was first reported. The following
table presents the components of the change in medical claims and
benefits payable from continuing and discontinued operations
combined for the periods indicated:
Year Ended December 31, 2015
2014 Medical claims and benefits payable, beginning
balance $ 1,201 $ 670 Components of medical care costs related to:
Current period 11,832 8,123 Prior period (141 ) (46 ) Total medical
care costs 11,691 8,077 Change in non-risk
provider payables 48 (32 ) Payments for medical care costs
related to: Current period 10,448 7,064 Prior period 910 450
Total paid 11,358 7,514 Medical claims and
benefits payable, ending balance $ 1,582 $ 1,201
Benefit from prior period as a percentage of: Balance at
beginning of period 11.8 % 6.9 % Premium revenue, trailing twelve
months 1.1 % 0.5 % Medical care costs, trailing twelve months 1.2 %
0.6 % Fee-For-Service Claims Data: Days in claims payable,
fee for service 48 49 Number of members at end of year 3,533,000
2,623,000 Number of claims in inventory at end of year 380,800
307,700 Billed charges of claims in inventory at end of year $ 816
$ 719 Claims in inventory per member at end of year 0.11 0.12
Billed charges of claims in inventory per member at end of year $
230.91 $ 273.92 Number of claims received during the year
40,173,300 27,597,000 Billed charges of claims received during the
year $ 46,211 $ 30,316
MOLINA HEALTHCARE, INC.
HEALTH INSURER FEE DETAILS BY HEALTH
PLAN
(In millions)
HIF Reimbursement Revenue, Gross(1) Year
Ended December 31, 2015 Recognized
Necessary
forFullReimbursement
Q1 2015 Q2 2015 Q3
2015 Q4 2015 Total
2015 HIF: California $ — $ 17 $ 6 $ 8 $ 31 $ 31 Florida 2 2
2 2 8 8 Illinois 1 1 1 1 4 4 Michigan — — 21 7 28 28 New Mexico 7 8
8 7 30 30 Ohio 12 12 12 12 48 48 South Carolina 3 3 3 3 12 12 Texas
6 6 6 5 23 23 Utah — — 4 2 6 6 Washington 11 11 6 9 37 37 Wisconsin
1 1 1 2 5 5 Subtotal, Medicaid
43 61 70 58 232 232 Marketplace — — 1 1 2 2 Medicare 6 4
4 5 19 19 49 65 75 64 253 $ 253
2014
HIF: California — 12 — — 12 Michigan — — 7 — 7 Utah — —
1 — 1 $ 49 $ 77 $ 83
$ 64 $ 273
Recognized in: Health
insurer fee revenue $ 48 $ 74 $ 81 $ 61 $ 264 Premium tax revenue 1
3 2 3 9 $ 49 $ 77
$ 83 $ 64 $ 273 _____________ (1) Amounts in
the table include the Company’s estimate of the full economic
impact of the excise tax including premium tax and the income tax
effect.
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Molina Healthcare, Inc.Juan José Orellana, 562-435-3666, ext.
111143Investor Relations
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