Molina Healthcare, Inc. (NYSE: MOH):
- Net income per diluted share for the
quarter of $0.76.
- Adjusted net income per diluted share
for the quarter of $0.85.
- Net income per diluted share for the
quarter up 31% over second quarter 2016.
- Adjusted net income per diluted share
for the quarter up 27% over second quarter 2016.
- Total revenue for the quarter of $4.5
billion, up 26% over third quarter 2015.
- Aggregate membership up 22% over third
quarter 2015.
Molina Healthcare, Inc. (NYSE: MOH) today reported its financial
results for the third quarter of 2016.
“Our third quarter results demonstrate continuing improvement in
our overall business,” said J. Mario Molina, M.D., chief executive
officer of Molina Healthcare, Inc. “Although these results
highlight the need for programmatic adjustments to the Affordable
Care Act’s health insurance Marketplaces, Molina Healthcare’s
combination of product and geographic diversification, quality
focused medical care, and efficient operations continues to deliver
value to our members, our government partners, and our
investors.”
Update on Financial
Performance
Third Quarter 2016 Compared With Second Quarter 2016
Third quarter 2016 financial performance improved significantly
when compared with the second quarter of 2016. Earnings per diluted
share increased to $0.76 in the third quarter of 2016 from $0.58 in
the second quarter. Adjusted earnings per diluted share increased
to $0.85 in the third quarter of 2016 from $0.67 in the second
quarter.
Higher profitability in the third quarter of 2016, when compared
with the second quarter of 2016, was primarily the result of:
- Improved profitability among
products other than the Marketplace, partially offset by lower
profitability for the Marketplace product. Excluding
adjustments related to 2015 dates of service, the medical care
ratio for all products combined (excluding Marketplace) declined to
89.6% in the third quarter from 90.3% in the second quarter. The
medical care ratio for the Marketplace program (also excluding
adjustments related to 2015 dates of service) increased to 89.0% in
the third quarter from 79.7% in the second quarter. Although third
quarter results for the Marketplace business were lower than
anticipated, we believe that Marketplace performance for full year
2016 dates of service will be approximately breakeven. We continue
to record substantial liabilities for Marketplace risk transfer
payments. We estimate that such payments reduced our Marketplace
premium revenue by approximately 25% for the nine months ended
September 30, 2016. We have recommended that the risk transfer
formula be modified so that payments between health plans are
allocated based solely upon medical costs, rather than upon
premiums. Such a change would have lowered the percentage of
premium revenue returned as a result of risk transfer from 25% to
20% for the nine months ended September 30, 2016. We believe that
the methodology used to calculate Marketplace risk transfer
payments penalizes comparatively efficient and affordable health
plans and, as a result, those purchasing affordable Marketplace
policies ultimately pay higher premiums.
- Improved administrative
efficiency. Our general and administrative expense ratio fell
to 7.6% in the third quarter of 2016 from 8.1% in the second
quarter.
- Lower effective tax rate. The
benefit of approximately $5 million in discrete items reduced our
effective tax rate to 54.0% in the third quarter of 2016, from
59.8% in the second quarter.
Net Income per Share Guidance
Our net income per share guidance for fiscal year 2016 remains
unchanged. As previously disclosed, we expect the following
factors, among others, to affect our financial performance in the
rest of 2016:
- The ultimate savings to be realized
from various cost savings initiatives and the speed at which such
savings will be realized.
- Medicaid rate increases (excluding
Medicaid Expansion) of approximately 3.0% in California (effective
July 1, 2016); approximately 2.5% in Puerto Rico (effective July 1,
2016); approximately 3.0% in Texas (effective September 1, 2016);
and approximately 4.0% in Florida (effective September 1, 2016).
All rate changes are consistent with our previous
expectations.
- Medicaid Expansion rate decreases of
approximately 11.0% in California (effective July 1, 2016) and
approximately 2.0% in Ohio (effective July 1, 2016). All rate
changes are consistent with our previous expectations.
- The implementation of a medical care
ratio floor of 86.0% for the South Carolina Medicaid program
effective July 1, 2016.
- Declining margins for our Marketplace
business during the second half of 2016 due to normal membership
attrition; the addition of higher cost members through the special
enrollment process; higher costs as members reach the limits of the
cost-sharing provisions of their insurance coverage; and increasing
utilization as members become more engaged with our care
networks.
Conference Call
Management will host a conference call and webcast to discuss
Molina Healthcare's third quarter results at 5:00 p.m. Eastern time
on Thursday, October 27, 2016. The number to call for the
interactive teleconference is (212) 231-2903. A telephonic replay
of the conference call will be available from 7:00 p.m. Eastern
time on Thursday, October 27, 2016, through 6:00 p.m. Eastern Time
on Friday, October 28, 2016, by dialing (800) 633-8284 and entering
confirmation number 21818529. A live audio broadcast of Molina
Healthcare’s conference call will be available on our 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 12 states across the nation and in the
Commonwealth of Puerto Rico, Molina currently serves approximately
4.2 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 our 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:
- the success of our profit improvement
and cost-cutting initiatives;
- uncertainties and evolving market and
provider economics associated with the implementation of the
Affordable Care Act (the “ACA”), 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 our ability to reduce over time the high medical costs
commonly associated with new patient populations;
- our ability to predict with a
reasonable degree of accuracy utilization rates, including
utilization rates in new plans, geographies, and programs where we
have less experience with patient and provider populations, and
also including utilization rates associated with seasonal flu
patterns or other newly emergent diseases;
- our ability to manage growth, including
maintaining and creating adequate internal systems and controls
relating to authorizations, approvals, provider payments, and the
overall success of our care management initiatives;
- our ability to consummate and realize
benefits from proposed acquisitions, including the pending
Aetna-Humana Medicare Advantage divestiture transaction;
- our receipt of adequate premium rates
to support increasing pharmacy costs, including costs associated
with specialty drugs and costs resulting from formulary changes
that allow the option of higher-priced non-generic drugs;
- our ability to operate profitably in an
environment where the trend in premium rate increases lags behind
the trend in increasing medical costs;
- the interpretation and implementation
of federal or state medical cost expenditure floors, administrative
cost and profit ceilings, premium stabilization programs, profit
sharing arrangements, and risk adjustment provisions;
- our estimates of amounts owed for such
cost expenditure floors, administrative cost and profit ceilings,
premium stabilization programs, profit-sharing arrangements, and
risk adjustment provisions, including but not limited to cost-plus
reimbursement for retroactively eligible members in New Mexico, the
Medicaid expansion cost corridors in New Mexico and Washington, and
any other retroactive adjustment to revenue where methodologies and
procedures are subject to interpretation, or are at least partially
dependent upon information about the health status of state or
federal program participants who are not Molina members;
- the interpretation and implementation
of at-risk premium rules regarding the achievement of certain
quality measures, and our ability to recognize revenue amounts
associated therewith;
- the interpretation and implementation
of state contract performance requirements regarding the
achievement of certain quality measures, and our ability to avoid
liquidated damages associated therewith;
- cyber-attacks or other privacy or data
security incidents resulting in an inadvertent unauthorized
disclosure of protected health information;
- the success of our health plan in
Puerto Rico, including the resolution of the Puerto Rico debt
crisis, payment of all amounts due under our Medicaid contract, the
effect of the newly enacted PROMESA law, and our efforts to better
manage the health care costs of our Puerto Rico health plan;
- 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 all amounts due to our Illinois health
plan;
- the accurate estimation of incurred but
not reported or paid medical costs across our health plans;
- subsequent adjustments to reported
premium revenue based upon subsequent developments or new
information, including changes to estimated amounts payable or
receivable related to Marketplace risk adjustment/risk transfer,
risk corridors, and reinsurance;
- 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 our health plans, Molina Medicaid
Solutions, and Pathways, 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 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, including but not limited to the
deductibility of certain compensation costs;
- newly emergent viruses or widespread
epidemics, including the Zika virus, public catastrophes or
terrorist attacks, 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
our periodic reports and filings with the Securities and Exchange
Commission. These reports can be accessed under the investor
relations tab of our website or on the SEC’s website at
sec.gov. Given these risks and
uncertainties, we can give no assurances that our forward-looking
statements will prove to be accurate, or that any other results or
events projected or contemplated by our 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 our judgment as of October 27, 2016, and we
disclaim any obligation to update any forward-looking statements to
conform the statement to actual results or changes in our
expectations.
MOLINA HEALTHCARE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF
INCOME
Three Months Ended September 30, Nine Months Ended
September 30, 2016 2015 2016
2015 (Dollar amounts in millions, except
net income per share) Revenue: Premium revenue $ 4,191 $ 3,377
$ 12,215 $ 9,652 Service revenue 133 47 408 146 Premium tax revenue
127 99 345 289 Health insurer fee revenue 85 81 251 203 Investment
income 9 5 25 12 Other revenue 1 2 4 5
Total revenue 4,546 3,611 13,248 10,307
Operating expenses: Medical care costs 3,748 3,016 10,930 8,581
Cost of service revenue 119 34 362 103 General and administrative
expenses 343 287 1,034 830 Premium tax expenses 127 99 345 289
Health insurer fee expenses 55 36 163 117 Depreciation and
amortization 36 26 102 76 Total
operating expenses 4,428 3,498 12,936 9,996
Operating income 118 113 312 311 Interest expense 26
15 76 45 Income before income tax expense 92
98 236 266 Income tax expense 50 52 137 153
Net income $ 42 $ 46 $ 99 $ 113
Diluted net income per share $ 0.76 $ 0.77 $
1.77 $ 2.07 Diluted weighted average shares
outstanding 56.1 60.0 56.2 54.7
Operating Statistics: Medical care ratio (1) 89.4 % 89.3 %
89.5 % 88.9 % General and administrative expense ratio (2) 7.6 %
8.0 % 7.8 % 8.1 % Premium tax ratio (1) 2.9 % 2.8 % 2.7 % 2.9 %
Effective tax rate 54.0 % 52.6 % 58.0 % 57.3 % Net profit margin
(2) 0.9 % 1.3 % 0.7 % 1.1 %
____________
(1)
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.
(2)
Computed as a percentage of total
revenue.
MOLINA HEALTHCARE, INC.
UNAUDITED CONSOLIDATED BALANCE
SHEETS
September 30, December 31, 2016
2015 (Unaudited) (Amounts in
millions,except per-share data) ASSETS Current
assets: Cash and cash equivalents $ 2,842 $ 2,329 Investments 1,735
1,801 Receivables 1,053 597 Income taxes refundable — 13 Prepaid
expenses and other current assets 169 192 Derivative asset 314
374 Total current assets 6,113 5,306 Property,
equipment, and capitalized software, net 450 393 Deferred contract
costs 83 81 Intangible assets, net 149 122 Goodwill 619 519
Restricted investments 116 109 Deferred income taxes — 18 Other
assets 40 28 $ 7,570 $ 6,576
LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities:
Medical claims and benefits payable $ 1,871 $ 1,685 Amounts due
government agencies 1,232 729 Accounts payable and accrued
liabilities 383 362 Deferred revenue 380 223 Income taxes payable
19 — Current portion of long-term debt 466 449 Derivative liability
314 374 Total current liabilities 4,665 3,822 Senior
notes 971 962 Lease financing obligations 198 198 Deferred income
taxes 6 — Other long-term liabilities 39 37 Total
liabilities 5,879 5,019 Stockholders’ equity: Common
stock, $0.001 par value; 150 shares authorized; outstanding: 57
shares at September 30, 2016 and 56 shares at December 31, 2015 — —
Preferred stock, $0.001 par value; 20 shares authorized, no shares
issued and outstanding — — Additional paid-in capital 831 803
Accumulated other comprehensive gain (loss) 3 (4 ) Retained
earnings 857 758 Total stockholders’ equity 1,691
1,557 $ 7,570 $ 6,576
MOLINA HEALTHCARE, INC.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
Three Months EndedSeptember
30,
Nine Months EndedSeptember
30,
2016 2015 2016
2015 (Amounts in millions) Operating activities: Net
income $ 42 $ 46 $ 99 $ 113 Adjustments to reconcile net income to
net cash provided by operating activities: Depreciation and
amortization 46 31 135 93 Deferred income taxes (19 ) (19 ) 20 (12
) Share-based compensation 8 7 24 16 Amortization of convertible
senior notes and lease financing obligations 8 7 23 22 Other, net 3
4 14 13 Changes in operating assets and liabilities: Receivables
(12 ) 12 (427 ) (23 ) Prepaid expenses and other assets 27 34 (116
) (63 ) Medical claims and benefits payable 86 67 168 359 Amounts
due government agencies (6 ) 155 503 453 Accounts payable and
accrued liabilities (146 ) (124 ) 1 34 Deferred revenue 276 9 157
(129 ) Income taxes 42 29 32 30 Net
cash provided by operating activities 355 258 633
906 Investing activities: Purchases of investments
(470 ) (318 ) (1,444 ) (1,311 ) Proceeds from sales and maturities
of investments 700 322 1,512 863 Purchases of property, equipment,
and capitalized software (41 ) (35 ) (143 ) (101 ) Change in
restricted investments (1 ) 9 4 (5 ) Net cash paid in business
combinations (40 ) (69 ) (48 ) (77 ) Other, net (6 ) (17 ) (12 )
(34 ) Net cash provided by (used in) investing activities 142
(108 ) (131 ) (665 ) Financing activities: Proceeds from
common stock offering, net of issuance costs — — — 373 Proceeds
from employee stock plans — — 10 8 Other, net — — 1
3 Net cash provided by financing activities —
— 11 384 Net increase in cash and cash
equivalents 497 150 513 625 Cash and cash equivalents at beginning
of period 2,345 2,014 2,329 1,539 Cash
and cash equivalents at end of period $ 2,842 $ 2,164
$ 2,842 $ 2,164
MOLINA HEALTHCARE, INC.UNAUDITED
NON-GAAP FINANCIAL MEASURES
We use two non-GAAP financial measures as supplemental metrics
in evaluating our 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 our
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). We believe
that EBITDA is particularly helpful in assessing our ability to
meet the cash demands of our operating units. The following table
reconciles net income, which we believe to be the most comparable
GAAP measure, to EBITDA.
Three Months Ended September 30,
Nine Months Ended September 30, 2016
2015 2016 2015 (Amounts in
millions) Net income $ 42 $ 46 $ 99 $ 113 Adjustments:
Depreciation, and amortization of intangible assets and capitalized
software 42 29 118 87 Interest expense 26 15 76 45 Income tax
expense 50 52 137 153 EBITDA $ 160 $
142 $ 430 $ 398
The second of these non-GAAP measures is adjusted net income
(including adjusted net income per diluted share). We believe that
adjusted net income per diluted share is very helpful in assessing
our financial performance exclusive of the non-cash impact of the
amortization of purchased intangibles. The following table
reconciles net income, which we believe to be the most comparable
GAAP measure, to adjusted net income.
Three Months Ended September 30,
Nine Months Ended September 30, 2016
2015 2016 2015 (In millions,
except per diluted share amounts) Amount
Per share Amount Per share
Amount Per share Amount
Per share Net income $ 42 $ 0.76 $ 46 $ 0.77 $ 99 $
1.77 $ 113 $ 2.07 Adjustment, net of tax: Amortization of
intangible assets 5 0.09 2 0.04 15
0.26 8 0.15 Adjusted net income $ 47 $
0.85 $ 48 $ 0.81 $ 114 $ 2.03 $
121 $ 2.22
MOLINA HEALTHCARE, INC.UNAUDITED
HEALTH PLANS SEGMENT MEMBERSHIP
September 30, December 31, September
30, 2016 2015 2015 Ending Membership by
Health Plan: California 683,000 620,000 611,000 Florida 563,000
440,000 349,000 Illinois 195,000 98,000 101,000 Michigan 387,000
328,000 340,000 New Mexico 253,000 231,000 231,000 New York (1)
37,000 — — Ohio 339,000 327,000 344,000 Puerto Rico 331,000 348,000
356,000 South Carolina 109,000 99,000 102,000 Texas 352,000 260,000
263,000 Utah 150,000 102,000 102,000 Washington 716,000 582,000
568,000 Wisconsin 131,000 98,000 103,000 4,246,000
3,533,000 3,470,000
Ending Membership by
Program: Temporary Assistance for Needy Families (TANF) and
Children's Health Insurance Program (CHIP) 2,529,000 2,312,000
2,249,000 Medicaid Expansion 658,000 557,000 540,000 Marketplace
568,000 205,000 226,000 Aged, Blind or Disabled (ABD) 395,000
366,000 359,000 Medicare-Medicaid Plan (MMP) - Integrated 51,000
51,000 56,000 Medicare Special Needs Plans 45,000 42,000
40,000 4,246,000 3,533,000 3,470,000
____________
(1)
The New York health plan was acquired on
August 1, 2016.
MOLINA HEALTHCARE, INC.
UNAUDITED SELECTED HEALTH PLANS SEGMENT
FINANCIAL DATA
(In millions, except percentages and
per-member per-month amounts)
Three Months Ended September 30, 2016 Member
Months(1)
Premium Revenue Medical Care
Costs MCR(2)
MedicalMargin
Total PMPM Total
PMPM California 2.1 $ 612 $ 298.05 $ 523 $ 254.11 85.3 % $
89 Florida 1.6 494 297.24 462 277.79 93.5 32 Illinois 0.6 163
275.26 145 244.86 89.0 18 Michigan 1.2 387 334.25 337 290.16 86.8
50 New Mexico 0.8 338 440.12 304 396.35 90.1 34 New York(3) 0.1 32
427.40 30 403.71 94.5 2 Ohio 1.0 501 491.51 424 415.87 84.6 77
Puerto Rico 1.0 184 183.46 167 167.44 91.3 17 South Carolina 0.3
102 312.28 94 285.97 91.6 8 Texas 1.1 597 559.98 525 493.07 88.1 72
Utah 0.4 106 236.31 104 230.53 97.6 2 Washington 2.1 569 265.48 521
243.49 91.7 48 Wisconsin 0.4 103 262.32 90 231.86 88.4 13 Other(4)
— 3 — 22 — — (19 ) 12.7 $ 4,191
$ 329.88 $ 3,748 $ 295.01 89.4 % $ 443
Three Months Ended September 30, 2015 Member
Months(1)
Premium Revenue Medical Care Costs
MCR(2)
MedicalMargin
Total PMPM Total PMPM California 1.9 $
524 $ 288.45 $ 438 $ 241.09 83.6 % $ 86 Florida 0.9 300 299.33 265
264.39 88.3 35 Illinois 0.3 106 347.34 100 327.61 94.3 6 Michigan
0.9 281 330.00 236 276.61 83.8 45 New Mexico 0.7 297 421.76 275
390.26 92.5 22
New York(3)
— — — — — — — Ohio 1.0 510 498.36 436 425.98 85.5 74 Puerto Rico
1.0 181 170.91 162 152.69 89.3 19 South Carolina 0.3 86 264.37 68
211.76 80.1 18 Texas 0.8 524 661.69 493 622.84 94.1 31 Utah 0.3 85
276.72 77 250.50 90.5 8 Washington 1.7 400 238.03 371 221.14 92.9
29 Wisconsin 0.3 71 232.32 57 184.94 79.6 14 Other(4) — 12
— 38 — — (26 ) 10.1 $ 3,377 $ 332.05 $
3,016 $ 296.49 89.3 % $ 361
____________
(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.
(3)
The New York health plan was acquired on
August 1, 2016.
(4)
“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
(In millions, except percentages and
per-member per-month amounts)
Nine Months Ended September 30, 2016 Member
Months(1)
Premium Revenue Medical Care
Costs MCR(2)
MedicalMargin
Total PMPM Total
PMPM California 6.1 $ 1,707 $ 280.21 $ 1,485 $ 243.64 86.9 %
$ 222 Florida 5.0 1,447 288.74 1,301 259.60 89.9 146 Illinois 1.8
466 266.11 414 236.39 88.8 52 Michigan 3.6 1,143 322.08 1,018
286.77 89.0 125 New Mexico 2.3 1,016 447.07 905 398.22 89.1 111
New York(3)
0.1 32 427.40 30 403.71 94.5 2 Ohio 3.0 1,472 484.82 1,306 430.14
88.7 166 Puerto Rico 3.0 535 176.44 516 170.46 96.6 19 South
Carolina 0.9 273 288.93 232 245.13 84.8 41 Texas 3.3 1,852 570.65
1,599 492.79 86.4 253 Utah 1.3 330 246.78 312 233.14 94.5 18
Washington 6.2 1,634 261.91 1,479 237.15 90.5 155 Wisconsin 1.2 299
252.45 278 235.25 93.2 21
Other(4)
— 9 — 55 — — (46 ) 37.8 $ 12,215
$ 323.44 $ 10,930 $ 289.41 89.5 % $ 1,285
Nine Months Ended September 30, 2015 Member
Months(1)
Premium Revenue Medical Care Costs
MCR(2)
MedicalMargin
Total PMPM Total PMPM California 5.3 $
1,538 $ 292.64 $ 1,349 $ 256.71 87.7 % $ 189 Florida 2.9 868 294.05
763 258.49 87.9 105 Illinois 0.9 312 342.27 288 315.68 92.2 24
Michigan 2.4 738 310.01 621 260.53 84.0 117 New Mexico 2.1 933
448.75 843 405.60 90.4 90
New York(3)
— — — — — — — Ohio 3.1 1,534 498.76 1,281 416.69 83.5 253 Puerto
Rico 2.1 375 175.17 346 161.60 92.3 29 South Carolina 1.0 270
269.11 209 208.45 77.5 61 Texas 2.4 1,418 597.53 1,313 553.35 92.6
105 Utah 0.8 242 284.83 223 262.14 92.0 19 Washington 4.9 1,186
242.75 1,094 223.99 92.3 92 Wisconsin 0.9 206 221.97 162 173.99
78.4 44
Other(4)
— 32 — 89 — — (57 ) 28.8 $ 9,652
$ 334.74 $ 8,581 $ 297.58 88.9 % $ 1,071
____________
(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.
(3)
The New York health plan was acquired on
August 1, 2016.
(4)
“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
(In millions, except percentages and
per-member per-month amounts)
Three Months Ended September 30, 2016 Member
Months(1)
Premium Revenue Medical Care
Costs MCR(2)
MedicalMargin
Total PMPM Total
PMPM TANF and CHIP 7.6 $ 1,373 $ 180.74 $ 1,246 $ 164.04
90.8 % $ 127 Medicaid Expansion 2.0 763 386.98 642 325.68 84.2 121
Marketplace 1.7 399 238.86 352 210.38 88.1 47 ABD 1.1 1,186
1,008.28 1,094 929.93 92.2 92 MMP 0.2 334 2,165.26 280 1,818.75
84.0 54 Medicare 0.1 136 1,019.19 134 1,003.85
98.5 2 12.7 $ 4,191 $ 329.88 $ 3,748 $ 295.01
89.4 % $ 443
Three Months Ended September 30, 2015
Member
Months(1)
Premium Revenue Medical Care Costs
MCR(2)
MedicalMargin
Total PMPM Total PMPM TANF and CHIP 6.6
$ 1,139 $ 171.16 $ 1,070 $ 160.85 94.0 % $ 69 Medicaid Expansion
1.5 565 366.80 458 297.16 81.0 107 Marketplace 0.6 170 262.74 124
192.21 73.2 46 ABD 1.1 1,070 1,017.68 979 931.11 91.5 91 MMP 0.2
310 1,975.10 271 1,718.13 87.0 39 Medicare 0.1 123
1,002.50 114 930.43 92.8 9 10.1 $ 3,377 $
332.05 $ 3,016 $ 296.49 89.3 % $ 361
Nine Months
Ended September 30, 2016 Member
Months(1)
Premium Revenue Medical Care Costs
MCR(2)
MedicalMargin
Total PMPM Total PMPM TANF and CHIP
22.5 $ 3,999 $ 177.60 $ 3,646 $ 161.93 91.2 % $ 353 Medicaid
Expansion 5.8 2,184 376.98 1,850 319.38 84.7 334 Marketplace 5.1
1,181 231.69 1,009 197.77 85.4 172 ABD 3.5 3,466 987.20 3,173
903.85 91.6 293 MMP 0.5 989 2,160.14 867 1,894.38 87.7 122 Medicare
0.4 396 1,015.14 385 986.40 97.2 11 37.8
$ 12,215 $ 323.44 $ 10,930 $ 289.41 89.5 % $
1,285
Nine Months Ended September 30, 2015
Member
Months(1)
Premium Revenue Medical Care Costs
MCR(2)
MedicalMargin
Total PMPM Total PMPM TANF and CHIP
18.6 $ 3,280 $ 175.52 $ 3,030 $ 162.16 92.4 % $ 250 Medicaid
Expansion 4.2 1,654 393.71 1,325 315.33 80.1 329 Marketplace 2.0
525 259.97 370 183.33 70.5 155 ABD 3.2 3,063 965.91 2,789 879.27
91.0 274 MMP 0.4 733 1,981.40 684 1,847.03 93.2 49 Medicare 0.4
397 1,026.00 383 991.53 96.6 14 28.8 $
9,652 $ 334.74 $ 8,581 $ 297.58 88.9 % $ 1,071
____________
(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.
MOLINA HEALTHCARE, INC.
UNAUDITED SELECTED HEALTH PLANS SEGMENT
FINANCIAL DATA
(In millions, except percentages and
per-member per-month amounts)
The following tables provide the details
of our medical care costs for the periods indicated:
Three Months Ended September 30, 2016
2015 Amount PMPM
% of
Total
Amount PMPM % of
Total
Fee for service $ 2,799 $ 220.29 74.7 % $ 2,224 $ 218.69 73.8 %
Pharmacy 567 44.65 15.1 418 41.07 13.9 Capitation 302 23.83 8.1 260
25.57 8.6 Direct delivery 21 1.66 0.5 31 2.97 1.0 Other 59
4.58 1.6 83 8.19 2.7 $ 3,748
$ 295.01 100.0 % $ 3,016 $ 296.49 100.0
%
Nine Months Ended September 30, 2016
2015 Amount PMPM % of
Total
Amount PMPM % of
Total
Fee for service $ 8,156 $ 215.96 74.6 % $ 6,275 $ 217.63 73.1 %
Pharmacy 1,621 42.93 14.8 1,161 40.26 13.5 Capitation 901 23.86 8.3
725 25.13 8.5 Direct delivery 55 1.46 0.5 85 2.94 1.0 Other 197
5.20 1.8 335 11.62 3.9 $
10,930 $ 289.41 100.0 % $ 8,581 $ 297.58
100.0 %
The following table provides the details
of our medical claims and benefits payable as of the dates
indicated:
September 30, December 31,
2016 2015 Fee-for-service claims incurred but not
paid (IBNP) $ 1,333 $ 1,191 Pharmacy payable 114 88 Capitation
payable 27 140 Other (1) 397 266 $ 1,871 $
1,685
____________
(1)
“Other” medical claims and benefits
payable include amounts payable to certain providers for which we
act as an intermediary on behalf of various state agencies without
assuming financial risk. Such receipts and payments do not impact
our consolidated statements of income. As of September 30, 2016 and
December 31, 2015, we had recorded non-risk provider payables
of approximately $237 million and $167 million, respectively.
MOLINA HEALTHCARE, INC.UNAUDITED
CHANGE IN MEDICAL CLAIMS AND BENEFITS PAYABLE(Dollars in
millions, except per-member amounts)
Our 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. Our 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 our 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 for the periods
indicated:
Year Ended Nine Months Ended
September 30, December 31, 2016
2015 2015 Medical claims and benefits payable,
beginning balance $ 1,685 $ 1,201 $ 1,201 Components of medical
care costs related to: Current period 11,120 8,724 11,935 Prior
period (190 ) (143 ) (141 ) Total medical care costs 10,930
8,581 11,794 Change in non-risk provider
payables 70 42 48 Payments for medical care
costs related to: Current period 9,536 7,372 10,448 Prior period
1,278 892 910 Total paid 10,814 8,264
11,358 Medical claims and benefits payable, ending
balance $ 1,871 $ 1,560 $ 1,685 Benefit
from prior period as a percentage of: Balance at beginning of
period 11.3 % 11.9 % 11.8 % Premium revenue, trailing twelve months
1.2 % 1.2 % 1.1 % Medical care costs, trailing twelve months 1.3 %
1.3 % 1.2 % Fee-For-Service Claims Data: Days in claims
payable, fee for service 47 49 48 Number of members at end of
period 4,246,000 3,470,000 3,533,000 Number of claims in inventory
at end of period 580,200 408,100 380,800 Billed charges of claims
in inventory at end of period $ 1,346 $ 908 $ 816 Claims in
inventory per member at end of period 0.14 0.12 0.11 Billed charges
of claims in inventory per member at end of period $ 316.89 $
261.73 $ 230.91 Number of claims received during the period
39,683,800 29,084,100 40,173,300 Billed charges of claims received
during the period $ 48,017 $ 33,517 $ 46,211
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version on businesswire.com: http://www.businesswire.com/news/home/20161027006765/en/
Molina Healthcare, Inc.Juan José Orellana, 562-435-3666, ext.
111143Investor Relations
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