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News   Press Releases

Molina Healthcare Reports Fourth Quarter and Year-End 2015 Results

MOH | February 8, 2016

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)    

Medical
Margin

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)

Medical
Margin

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)    

Medical
Margin

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)

Medical
Margin

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)    

Medical
Margin

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)

Medical
Margin

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 for
Full
Reimbursement

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.

Molina Healthcare, Inc.
Juan José Orellana, 562-435-3666, ext. 111143
Investor Relations

Copyright Business Wire 2016
Business Wire
February 8, 2016 - 4:15 PM EST

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