Molina Healthcare expects new state Medicaid contracts to offset any losses it sees as states resume Medicaid redeterminations.<\/p>\n

The majority of Molina\u2019s membership rests in Medicaid, which grew 5.8% year-over-year to 4.8 million members during the first quarter. Molina has gained 800,000 Medicaid members since the start of the COVID-19 pandemic, Chief Financial Officer Mark Keim said during the company’s first-quarter earnings call Thursday.\u00a0<\/p>\n

The company expects to lose 400,000 members as states restart redeterminations<\/a>, which will translate to a $1.6 billion revenue decline. The company anticipates recording $532.8 million of the loss this year and the rest in 2024, he said.\u00a0<\/p>\n

States paused checking Medicaid members\u2019 eligibility during the public health emergency in exchange for increased federal funding. Congress authorized states to begin redetermining individuals\u2019 eligibility this month.\u00a0<\/p>\n

Like other insurers<\/a>, Molina expects healthier customers to lose Medicaid coverage during the process. But the company does not expect changes in its Medicaid members\u2019 healthcare expenses to affect profits, CEO Joe Zubretsky said during the call. States\u2019 risk-sharing corridors and willingness to renegotiate managed care rates will protect the company\u2019s balance sheet if the costs of caring for its Medicaid enrollees rise, he said.\u00a0<\/p>\n

\u201cIn early discussions with many states, they\u2019re willing to have discussions about retrospective and prospective rate adjustments,\u201d Zubretsky said. \u201cThey\u2019re willing to have them on-cycle and off-cycle. The conversations have been very productive.\u201d \u00a0<\/p>\n

On Thursday, the insurer said first-quarter net income increased 24.4% to $321 million, or $5.52 per share. Revenue grew 4.8% to $8.1 billion, driven by new state contracts to administer Medicaid programs in Indiana, Iowa and Nebraska. The company\u2019s membership grew 3.5% to 5.2 million members.<\/p>\n

Molina raised\u00a0its adjusted earnings guidance to at least $20.25 per share in 2023, compared with its previous estimate\u00a0of\u00a0$19.75 per share.<\/p>\n

Executives said the company did not plan to profit from switching members to its marketplace plans and is focused on decreasing its exchange footprint to 5% of its membership because those members’\u00a0 healthcare costs tend to be more variable than its other lines of business. During the quarter, Molina\u2019s marketplace enrollment declined 27% to 271,000 members.<\/p>\n

\u201cWe didn\u2019t put any upside on retaining members during redeterminations in our marketplace outlook, so anything we pick up through redeterminations is an upside,\u201d Zubretsky said.\u00a0<\/p>\n

The company does not expect to be affected by the Centers for Medicaid and Medicare Services\u2019 changes to the Medicare Advantage program, he said. Molina grew its Medicare Advantage membership 8.7% to 161,000, slightly above the industry average of 7%.\u00a0<\/p>\n

Because half of its members are in Medicare-Medicaid Plans\u2013a sunsetting pilot program launched by the CMS Innovation Center\u2013they are unaffected by r egulators\u2019 rate adjustment<\/a>s and modifications of the star ratings program, he said. The other half are those dually eligible for Medicare and Medicaid who are enrolled in special needs products, he said.<\/p>\n

\u201cOur D-SNP book of products is competitive and replete with value-added benefits, and so if we have to remove some benefits to keep our products at $0 premium and competitive, we can do so,\u201d Zubretsky said. \u201cWe\u2019re positioned for another good year in Medicare.\u201d\u00a0<\/p>\n

Like other carriers, the company reported a decline in the reserves it holds to pay members\u2019 healthcare bills, a metric known as days claims payable. Molina Healthcare\u2019s days claims payable decreased by three days to 48. The drop in its claims reserve was primarily due to more Medicare and Medicaid enrollees seeking outpatient care, Zubretsky said.<\/p>\n

Molina grew its number of marketplace members enrolled in Bronze metal-level plans, which carry a higher deductible and whose healthcare expenses are likely to be reported in the back half of the year, he said.\u00a0<\/p>\n

Patients\u2019 healthcare use remains in line\u00a0with what the insurer expected, with inpatient stays and COVID-19, flu and Respiratory Syncytial Virus cases down year-over-year, he said. The declines in utilization health insurers are reporting contrast with what big health systems such as Dallas, Texas-based Tenet Healthcare<\/a>, King of Prussia, Pennsylvania-based Universal Health Services and Nashville, Tennessee-based HCA Healthcare have said.\u00a0<\/p>\n

\u201cCOVID has gone from an almost completely inpatient to almost completely lab phenomenon,\u201d Zubretsky said. \u201cYou trade one inpatient to one lab test. It\u2019s changed dramatically year-over-year.\u201d \u00a0<\/p>\n

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