SEC Filings

Molina's Georgia And Texas Medicaid Contracts Now Aim For Late 2027 Or 2028

Procurement protests have pushed back two awarded state contracts, while a Marketplace risk-adjustment estimate lifted the quarter's margin.

Molina Healthcare, which runs Medicaid, Medicare and marketplace health plans, now expects its Georgia and Texas Medicaid contracts to start in late 2027 or in 2028, according to its quarterly report filed Thursday. The company blames ongoing procurement protests for the delay.

Two awards, pushed back

Georgia's contract was originally scheduled to start on July 1, 2025. The state issued its notice of intent to award in December 2024, and Molina's Georgia plan was the top scorer, noticed for one of four statewide contracts.

In Texas, Molina was notified in the first quarter of 2024 of the state's intent to award it the STAR & CHIP contract, covering children's and low-income family coverage. Both programs are existing Molina contracts, and the award was meant to expand its footprint and market share. The expected start is now also late 2027 or 2028.

The prior quarter's 10-Q carried no Georgia or Texas procurement entries.

A Marketplace reserve estimate helps the margin

Molina's Marketplace medical care ratio, the share of premiums spent on care, fell to 92.5% in the third quarter from 95.6% a year earlier. The filing attributes the drop mainly to favorable changes in risk-adjustment estimates, partly offset by unfavorable member mix and federal program integrity efforts.

Marketplace premiums fell to $642 million from $1,197 million, as the company deliberately shrinks that book. The Medicaid ratio rose to 93.0% from 92.0%. Net income was $38 million, or $0.73 per diluted share, against $79 million a year earlier.

Operating cash flow for the first nine months was $629 million, versus $237 million used a year earlier, mainly because government receivable and payable settlements were smaller.

Shrinking one book, waiting on another

Molina served about 4.9 million members at September 30, with Medicaid at 4,372,000. It expects further Marketplace cuts for 2027 that would reduce premiums by $1 billion from 2026, and plans to exit its traditional Medicare Advantage product for 2027, which produced a $93 million impairment in the first quarter.

Near-term Medicaid growth comes from elsewhere. The Florida Kids contract began October 1, and full-year guidance includes a loss of $1.50 per share from it in the fourth quarter. Wisconsin and Illinois Medicaid contracts are expected to begin January 1, 2027.

Molina's market value stood at $11.2 billion on Thursday morning, and it reaffirmed 2026 guidance of about $42 billion in premium revenue and adjusted earnings of at least $5.25 per share.