QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
ITEM NUMBER | Page | |||||||
PART I | ||||||||
1. | ||||||||
2. | ||||||||
3. | ||||||||
4. | ||||||||
PART II | ||||||||
1. | ||||||||
1A. | ||||||||
2. | ||||||||
3. | Defaults Upon Senior Securities | Not Applicable. | ||||||
4. | Mine Safety Disclosures | Not Applicable. | ||||||
5. | ||||||||
6. | ||||||||
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(In millions, except per-share amounts) (Unaudited) | |||||||||||
Revenue: | |||||||||||
Premium revenue | $ | $ | |||||||||
Premium tax revenue | |||||||||||
Investment income | |||||||||||
Other revenue | |||||||||||
Total revenue | |||||||||||
Operating expenses: | |||||||||||
Medical care costs | |||||||||||
General and administrative expenses | |||||||||||
Premium tax expenses | |||||||||||
Depreciation and amortization | |||||||||||
Other | |||||||||||
Total operating expenses | |||||||||||
Operating income | |||||||||||
Interest expense | |||||||||||
Income before income tax expense | |||||||||||
Income tax expense | |||||||||||
Net income | $ | $ | |||||||||
Net income per share - Basic | $ | $ | |||||||||
Net income per share - Diluted | $ | $ | |||||||||
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(In millions) (Unaudited) | |||||||||||
Net income | $ | $ | |||||||||
Other comprehensive (loss) gain: | |||||||||||
Unrealized investment (loss) gain | ( | ||||||||||
Less: effect of income taxes | ( | ||||||||||
Other comprehensive (loss) gain, net of tax | ( | ||||||||||
Comprehensive income | $ | $ | |||||||||
March 31, 2024 | December 31, 2023 | ||||||||||
(Dollars in millions, except per-share amounts) | |||||||||||
(Unaudited) | |||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Investments | |||||||||||
Receivables | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property, equipment, and capitalized software, net | |||||||||||
Goodwill, and intangible assets, net | |||||||||||
Restricted investments | |||||||||||
Deferred income taxes, net | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Medical claims and benefits payable | $ | $ | |||||||||
Amounts due government agencies | |||||||||||
Accounts payable, accrued liabilities and other | |||||||||||
Deferred revenue | |||||||||||
Total current liabilities | |||||||||||
Long-term debt | |||||||||||
Finance lease liabilities | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Stockholders’ equity: | |||||||||||
Common stock, $ | |||||||||||
Preferred stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Retained earnings | |||||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ | |||||||||
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Total | |||||||||||||||||||||||||||||||
Outstanding | Amount | ||||||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||
Balance at December 31, 2023 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive loss, net | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Share-based compensation | — | ( | — | — | ( | ||||||||||||||||||||||||||||||
Balance at March 31, 2024 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Total | |||||||||||||||||||||||||||||||
Outstanding | Amount | ||||||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||
Other comprehensive income, net | — | — | — | — | |||||||||||||||||||||||||||||||
Share-based compensation | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Balance at March 31, 2023 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(In millions) (Unaudited) | |||||||||||
Operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Deferred income taxes | |||||||||||
Share-based compensation | |||||||||||
Other, net | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Receivables | ( | ( | |||||||||
Prepaid expenses and other current assets | |||||||||||
Medical claims and benefits payable | ( | ||||||||||
Amounts due government agencies | |||||||||||
Accounts payable, accrued liabilities and other | ( | ( | |||||||||
Deferred revenue | ( | ||||||||||
Income taxes | |||||||||||
Net cash provided by operating activities | |||||||||||
Investing activities: | |||||||||||
Purchases of investments | ( | ( | |||||||||
Proceeds from sales and maturities of investments | |||||||||||
Net cash paid in business combinations | ( | ||||||||||
Purchases of property, equipment and capitalized software | ( | ( | |||||||||
Other, net | |||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Financing activities: | |||||||||||
Common stock withheld to settle employee tax obligations | ( | ( | |||||||||
Other, net | ( | ( | |||||||||
Net cash used in financing activities | ( | ( | |||||||||
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents | ( | ||||||||||
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period | |||||||||||
Cash, cash equivalents, and restricted cash and cash equivalents at end of period | $ | $ | |||||||||
March 31, | |||||||||||
2024 | 2023 | ||||||||||
(In millions) | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash and cash equivalents | |||||||||||
Total cash, cash equivalents, and restricted cash and cash equivalents presented in the consolidated statements of cash flows | $ | $ | |||||||||
March 31, 2024 | December 31, 2023 | ||||||||||
(In millions) | |||||||||||
Government receivables | $ | $ | |||||||||
Pharmacy rebate receivables | |||||||||||
Other | |||||||||||
Total receivables | $ | $ | |||||||||
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(In millions, except net income per share) | |||||||||||
Numerator: | |||||||||||
Net income | $ | $ | |||||||||
Denominator: | |||||||||||
Shares outstanding at the beginning of the period | |||||||||||
Weighted-average number of shares issued: | |||||||||||
Stock-based compensation | |||||||||||
Denominator for basic net income per share | |||||||||||
Effect of dilutive securities: (1) | |||||||||||
Stock-based compensation | |||||||||||
Denominator for diluted net income per share | |||||||||||
Net income per share - Basic (2) | $ | $ | |||||||||
Net income per share - Diluted (2) | $ | $ | |||||||||
Fair value of consideration transferred: | |||||
Cash | $ | ||||
Contingent consideration | |||||
Total | $ |
Assets acquired: | |||||
Current assets | $ | ||||
Goodwill | |||||
Intangible assets | |||||
Other long-term assets | |||||
Liabilities assumed: | |||||
Medical claims and benefits payable | ( | ||||
Amounts due government agencies | ( | ||||
Accounts payable, accrued and other long-term liabilities | ( | ||||
Fair value of net assets acquired | $ |
Fair Value | Life | ||||||||||
(In millions) | (Years) | ||||||||||
Contract rights - member list | $ | ||||||||||
Trade name | |||||||||||
Provider network | |||||||||||
$ | |||||||||||
Observable Inputs | Directly or Indirectly Observable Inputs | Unobservable Inputs | |||||||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Corporate debt securities | $ | $ | $ | $ | |||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||
Municipal securities | |||||||||||||||||||||||
U.S. Treasury notes | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total assets | $ | $ | $ | $ | |||||||||||||||||||
Observable Inputs | Directly or Indirectly Observable Inputs | Unobservable Inputs | |||||||||||||||||||||
Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Corporate debt securities | $ | $ | $ | $ | |||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||
Municipal securities | |||||||||||||||||||||||
U.S. Treasury notes | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total assets | $ | $ | $ | $ | |||||||||||||||||||
March 31, 2024 | December 31, 2023 | ||||||||||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
$ | $ | $ | $ | ||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
March 31, 2024 | |||||||||||||||||||||||
Amortized Cost | Gross Unrealized | Estimated Fair Value | |||||||||||||||||||||
Gains | Losses | ||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Corporate debt securities | $ | $ | $ | $ | |||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||
Municipal securities | |||||||||||||||||||||||
U.S. Treasury notes | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
December 31, 2023 | |||||||||||||||||||||||
Amortized Cost | Gross Unrealized | Estimated Fair Value | |||||||||||||||||||||
Gains | Losses | ||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Corporate debt securities | $ | $ | $ | $ | |||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||
Municipal securities | |||||||||||||||||||||||
U.S. Treasury notes | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total | $ | $ | $ | $ | |||||||||||||||||||
Amortized Cost | Estimated Fair Value | ||||||||||
(In millions) | |||||||||||
Due in one year or less | $ | $ | |||||||||
Due after one year through five years | |||||||||||
Due after five years through ten years | |||||||||||
Due after ten years | |||||||||||
Total | $ | $ | |||||||||
In a Continuous Loss Position for Less than 12 Months | In a Continuous Loss Position for 12 Months or More | ||||||||||||||||||||||||||||||||||
Estimated Fair Value | Unrealized Losses | Total Number of Positions | Estimated Fair Value | Unrealized Losses | Total Number of Positions | ||||||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||||||||
Corporate debt securities | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||||||||||||||
Municipal securities | |||||||||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
In a Continuous Loss Position for Less than 12 Months | In a Continuous Loss Position for 12 Months or More | ||||||||||||||||||||||||||||||||||
Estimated Fair Value | Unrealized Losses | Total Number of Positions | Estimated Fair Value | Unrealized Losses | Total Number of Positions | ||||||||||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||||||||||||||
Corporate debt securities | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Mortgage-backed securities | |||||||||||||||||||||||||||||||||||
Asset-backed securities | |||||||||||||||||||||||||||||||||||
Municipal securities | |||||||||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
March 31, 2024 | December 31, 2023 | ||||||||||
(In millions) | |||||||||||
Claims incurred but not paid (“IBNP”) | $ | $ | |||||||||
Pharmacy payable | |||||||||||
Capitation payable | |||||||||||
Other | |||||||||||
Total | $ | $ | |||||||||
Three Months Ended March 31, 2024 | |||||||||||||||||||||||
Medicaid | Medicare | Marketplace | Consolidated | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Medical claims and benefits payable, beginning balance | $ | $ | $ | $ | |||||||||||||||||||
Components of medical care costs related to: | |||||||||||||||||||||||
Current year | |||||||||||||||||||||||
Prior years | ( | ( | ( | ( | |||||||||||||||||||
Total medical care costs | |||||||||||||||||||||||
Payments for medical care costs related to: | |||||||||||||||||||||||
Current year | |||||||||||||||||||||||
Prior years | |||||||||||||||||||||||
Total paid | |||||||||||||||||||||||
Acquired balances, net of post-acquisition adjustments | |||||||||||||||||||||||
Change in non-risk and other payables | ( | ( | ( | ||||||||||||||||||||
Medical claims and benefits payable, ending balance | $ | $ | $ | $ | |||||||||||||||||||
Three Months Ended March 31, 2023 | |||||||||||||||||||||||
Medicaid | Medicare | Marketplace | Consolidated | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Medical claims and benefits payable, beginning balance | $ | $ | $ | $ | |||||||||||||||||||
Components of medical care costs related to: | |||||||||||||||||||||||
Current year | |||||||||||||||||||||||
Prior years | ( | ( | ( | ( | |||||||||||||||||||
Total medical care costs | |||||||||||||||||||||||
Payments for medical care costs related to: | |||||||||||||||||||||||
Current year | |||||||||||||||||||||||
Prior years | |||||||||||||||||||||||
Total paid | |||||||||||||||||||||||
Acquired balances, net of post-acquisition adjustments | |||||||||||||||||||||||
Change in non-risk and other provider payables | |||||||||||||||||||||||
Medical claims and benefits payable, ending balance | $ | $ | $ | $ | |||||||||||||||||||
March 31, 2024 | December 31, 2023 | ||||||||||
(In millions) | |||||||||||
Non-current long-term debt: | |||||||||||
$ | $ | ||||||||||
Deferred debt issuance costs | ( | ( | |||||||||
Total | $ | $ | |||||||||
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(In millions) | |||||||||||
Total revenue: | |||||||||||
Medicaid | $ | $ | |||||||||
Medicare | |||||||||||
Marketplace | |||||||||||
Other | |||||||||||
Consolidated | $ | $ | |||||||||
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(In millions) | |||||||||||
Margin: | |||||||||||
Medicaid | $ | $ | |||||||||
Medicare | |||||||||||
Marketplace | |||||||||||
Other | |||||||||||
Total margin | |||||||||||
Add: other operating revenues (1) | |||||||||||
Less: other operating expenses (2) | ( | ( | |||||||||
Operating income | |||||||||||
Less: interest expense | |||||||||||
Income before income tax expense | $ | $ | |||||||||
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(In millions, except per-share amounts) | |||||||||||
Premium revenue | $ | 9,504 | $ | 7,885 | |||||||
Less: medical care costs | 8,414 | 6,871 | |||||||||
Medical margin | 1,090 | 1,014 | |||||||||
MCR (1) | 88.5 | % | 87.1 | % | |||||||
Other revenues: | |||||||||||
Premium tax revenue | 297 | 172 | |||||||||
Investment income | 108 | 71 | |||||||||
Other revenue | 22 | 21 | |||||||||
General and administrative expenses | 711 | 591 | |||||||||
G&A ratio (2) | 7.2 | % | 7.2 | % | |||||||
Premium tax expenses | 297 | 172 | |||||||||
Depreciation and amortization | 45 | 44 | |||||||||
Other | 38 | 16 | |||||||||
Operating income | 426 | 455 | |||||||||
Interest expense | 27 | 28 | |||||||||
Income before income tax expense | 399 | 427 | |||||||||
Income tax expense | 98 | 106 | |||||||||
Net income | $ | 301 | $ | 321 | |||||||
Net income per share – Diluted | $ | 5.17 | $ | 5.52 | |||||||
Diluted weighted average shares outstanding | 58.3 | 58.0 | |||||||||
Other Key Statistics | |||||||||||
Ending Membership | 5.7 | 5.3 | |||||||||
Effective income tax rate | 24.5 | % | 25.0 | % | |||||||
After-tax margin (3) | 3.0 | % | 3.9 | % | |||||||
March 31, | December 31, | March 31, | |||||||||||||||
2024 | 2023 | 2023 | |||||||||||||||
Medicaid | 5,123,000 | 4,542,000 | 4,834,000 | ||||||||||||||
Medicare | 258,000 | 172,000 | 161,000 | ||||||||||||||
Marketplace | 346,000 | 281,000 | 271,000 | ||||||||||||||
Total | 5,727,000 | 4,995,000 | 5,266,000 | ||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||||||||||||||
Premium Revenue | Medical Margin | MCR | Premium Revenue | Medical Margin | MCR | ||||||||||||||||||||||||||||||
Medicaid | $ | 7,492 | $ | 775 | 89.7 | % | $ | 6,349 | $ | 734 | 88.4 | % | |||||||||||||||||||||||
Medicare | 1,442 | 163 | 88.7 | 1,046 | 126 | 88.0 | |||||||||||||||||||||||||||||
Marketplace | 570 | 152 | 73.3 | 490 | 154 | 68.6 | |||||||||||||||||||||||||||||
Total | $ | 9,504 | $ | 1,090 | 88.5 | % | $ | 7,885 | $ | 1,014 | 87.1 | % | |||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||
2024 | 2023 | Change | |||||||||||||||
(In millions) | |||||||||||||||||
Net cash provided by operating activities | $ | 214 | $ | 916 | $ | (702) | |||||||||||
Net cash used in investing activities | (488) | (302) | (186) | ||||||||||||||
Net cash used in financing activities | (62) | (65) | 3 | ||||||||||||||
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents | $ | (336) | $ | 549 | $ | (885) | |||||||||||
Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) | ||||||||||||||||||||
January 1 - January 31 | 1,000 | $ | 361.31 | — | $ | 750,000,000 | |||||||||||||||||
February 1 - February 29 | — | $ | — | — | $ | 750,000,000 | |||||||||||||||||
March 1 - March 31 | 143,000 | $ | 387.21 | — | $ | 750,000,000 | |||||||||||||||||
Total | 144,000 | $ | 387.09 | — | |||||||||||||||||||
Exhibit No. | Title | Method of Filing | ||||||||||||
31.1 | Filed herewith. | |||||||||||||
31.2 | Filed herewith. | |||||||||||||
32.1 | Filed herewith. | |||||||||||||
32.2 | Filed herewith. | |||||||||||||
101.INS | Inline XBRL Taxonomy Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document. | Filed herewith. | ||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document. | Filed herewith. | ||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | Filed herewith. | ||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | Filed herewith. | ||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | Filed herewith. | ||||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | Filed herewith. | ||||||||||||
104 | Cover Page Interactive Data file (formatted as Inline XBRL and embedded within Exhibit 101) | Filed herewith. |
MOLINA HEALTHCARE, INC. | |||||||||||
(Registrant) | |||||||||||
Dated: | April 25, 2024 | /s/ JOSEPH M. ZUBRETSKY | |||||||||
Joseph M. Zubretsky | |||||||||||
Chief Executive Officer | |||||||||||
(Principal Executive Officer) | |||||||||||
Dated: | April 25, 2024 | /s/ MARK L. KEIM | |||||||||
Mark L. Keim | |||||||||||
Chief Financial Officer and Treasurer | |||||||||||
(Principal Financial Officer) |
Dated: April 25, 2024 | /s/ Joseph M. Zubretsky | |||||||
Joseph M. Zubretsky | ||||||||
Chief Executive Officer, President and Director | ||||||||
(Principal Executive Officer) |
Dated: April 25, 2024 | /s/ Mark L. Keim | |||||||
Mark L. Keim | ||||||||
Chief Financial Officer and Treasurer | ||||||||
(Principal Financial Officer) |
Dated: April 25, 2024 | /s/ Joseph M. Zubretsky | |||||||
Joseph M. Zubretsky | ||||||||
Chief Executive Officer, President and Director | ||||||||
(Principal Executive Officer) |
Dated: April 25, 2024 | /s/ Mark L. Keim | |||||||
Mark L. Keim | ||||||||
Chief Financial Officer and Treasurer | ||||||||
(Principal Financial Officer) |
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CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 31, 2024 |
Mar. 31, 2023 |
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Revenue: | ||
Premium revenue | $ 9,504 | $ 7,885 |
Premium tax revenue | 297 | 172 |
Investment income | 108 | 71 |
Other revenue | 22 | 21 |
Total revenue | 9,931 | 8,149 |
Operating expenses: | ||
Medical care costs | 8,414 | 6,871 |
General and administrative expenses | 711 | 591 |
Premium tax expenses | 297 | 172 |
Depreciation and amortization | 45 | 44 |
Other | 38 | 16 |
Total operating expenses | 9,505 | 7,694 |
Operating income | 426 | 455 |
Interest expense | 27 | 28 |
Income before income tax expense | 399 | 427 |
Income tax expense | 98 | 106 |
Net income | $ 301 | $ 321 |
Net income per share: | ||
Net income per share - Basic (in dollars per share) | $ 5.21 | $ 5.58 |
Net income per share - Diluted (in dollars per share) | $ 5.17 | $ 5.52 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 301 | $ 321 |
Other comprehensive (loss) gain: | ||
Unrealized investment (loss) gain | (5) | 46 |
Less: effect of income taxes | (2) | 11 |
Other comprehensive (loss) gain, net of tax | (3) | 35 |
Comprehensive income | $ 298 | $ 356 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares outstanding (in shares) | 59,000,000 | 58,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Organization and Basis of Presentation |
3 Months Ended |
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Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Organization and Operations Molina Healthcare, Inc. provides managed healthcare services under the Medicaid and Medicare programs, and through the state insurance marketplaces (the “Marketplace”). We currently have four reportable segments consisting of: 1) Medicaid; 2) Medicare; 3) Marketplace; and 4) Other. Our reportable segments are consistent with how we currently manage the business and view the markets we serve. As of March 31, 2024, we served approximately 5.7 million members eligible for government-sponsored healthcare programs, located across 21 states. Our state Medicaid contracts typically have terms of to five years, contain renewal options exercisable by the state Medicaid agency, and allow either the state or the health plan to terminate the contract with or without cause. Such contracts are subject to risk of loss in states that issue requests for proposal (“RFP”) open to competitive bidding by other health plans. If one of our health plans is not a successful responsive bidder to a state RFP, its contract may not be renewed. In addition to contract renewal, our state Medicaid contracts may be periodically amended to include or exclude certain health benefits (such as pharmacy services, behavioral health services, or long-term care services); populations such as the aged, blind or disabled (“ABD”); and regions or service areas. In Medicare, we enter into Medicare Advantage-Part D contracts with the Centers for Medicare and Medicaid Services (“CMS”) annually, and for dual-eligible programs, we enter into contracts with CMS, in partnership with each state’s department of health and human services. Such contracts typically have terms of to three years. In Marketplace, we enter into contracts with CMS, which end on December 31 of each year, and must be renewed annually. Recent Developments Florida Procurement—Medicaid. In April 2024, we were notified that the Florida Agency for Health Care Administration issued a notice of invitation to negotiate which did not include Molina Healthcare of Florida as an awardee. We are exercising our right to protest the decision. Michigan Procurement—Medicaid. In April 2024, we announced that the Michigan Department of Health and Human Services intends to award a Comprehensive Health Care Program contract to Molina Healthcare of Michigan. We were awarded the contract in six service regions. The go-live date for the new Medicaid contract is expected to be October 1, 2024. The new contract is expected to have a duration of five years, with three, one-year optional extensions. Texas Procurement—Medicaid. In March 2024, we were notified of the Texas Health and Human Services Commission’s intent to award us a contract for TANF and CHIP (known as the STAR & CHIP programs, and both existing contracts for Molina), expanding our footprint and expecting to grow our market share. The start of operations for the new contract is expected to begin in the third quarter of 2025. Mississippi Procurement—Medicaid. In the first quarter of 2024, Mississippi Division of Medicaid signaled its intention to further extend the existing contracts for at least part of the state fiscal year that will begin on July 1, 2024. We now expect the new four-year contract to commence between September 1, 2024 and July 1, 2025. Virginia Procurement—Medicaid. In the first quarter of 2024, the Virginia Department of Medical Assistance Services (“DMAS”) issued a notice of intent to award which did not include Molina Healthcare of Virginia as an awardee for its Cardinal Care Managed Care (“CCMC”) procurement. We exercised our right to protest that decision. On April 19, 2024, DMAS upheld its notice of intent to award in response to our protest. Molina intends to file a legal action in Virginia District Court over DMAS’s decision not to award Molina a CCMC contract. In addition, DMAS separately notified us that they were exercising the contractual extension option for the period from July 1, 2024 through June 30, 2025. Despite the extension, subject to a 90-day advance notice obligation, DMAS retains its right to terminate the contract for convenience in order to transition members to the new CCMC contracts. California Acquisition—Medicare. Effective January 1, 2024, we closed on our acquisition of 100% of the issued and outstanding capital stock of Brand New Day and Central Health Plan of California (“Bright Health Medicare”), which added approximately 109,000 members. California Procurement—Medicaid. Our new contract with the California Department of Health Care Services commenced on January 1, 2024, which enables us to continue servicing Medi-Cal members in most of our existing counties and expand our footprint in Los Angeles County. Nebraska Procurement—Medicaid. Our new contract with the Nebraska Department of Health and Human Services commenced on January 1, 2024, which added approximately 111,000 members. Consolidation and Interim Financial Information The consolidated financial statements include the accounts of Molina Healthcare, Inc. and its subsidiaries. In the opinion of management, these financial statements reflect all normal recurring adjustments, which are considered necessary for a fair presentation of the results as of the dates and for the interim periods presented. All significant intercompany balances and transactions have been eliminated. The consolidated results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results for the entire year ending December 31, 2024. The unaudited consolidated interim financial statements have been prepared under the assumption that users of the interim financial data have either read or have access to our audited consolidated financial statements for the fiscal year ended December 31, 2023. Accordingly, certain disclosures that would substantially duplicate the disclosures contained in our December 31, 2023, audited consolidated financial statements have been omitted. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Estimates also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
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Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies | Significant Accounting Policies Cash and Cash Equivalents Cash and cash equivalents consist of cash and short-term, highly liquid investments that are both readily convertible into known amounts of cash and have a maturity of three months or less on the date of purchase. The following table provides a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents reported within the accompanying consolidated balance sheets that sum to the total of the same such amounts presented in the accompanying consolidated statements of cash flows. The restricted cash and cash equivalents presented below are included in “Restricted investments” in the accompanying consolidated balance sheets.
Receivables Receivables consist primarily of premium amounts due from government agencies, which are subject to potential retroactive adjustments. We apply the current expected credit loss model to measure expected credits losses on our receivables based on available information about past events and reasonable and supportable forecasts. Because substantially all of our receivable amounts are readily determinable and substantially all of our creditors are governmental authorities, our allowance for credit losses is insignificant. Any amounts determined to be uncollectible are charged to expense when such determination is made.
Premium Revenue Recognition and Amounts Due Government Agencies Premium revenue is generated from our contracts with state and federal agencies, in connection with our participation in the Medicaid, Medicare, and Marketplace programs. Premium revenue is generally received based on per member per month (“PMPM”) rates established in advance of the periods covered. These premium revenues are recognized in the month that members are entitled to receive healthcare services, and premiums collected in advance are deferred. Many of our contracts contain provisions that may adjust or limit revenue or profit, as described below. Consequently, we recognize premium revenue as it is earned under such provisions. Liabilities accrued for premiums to be returned under such provisions are reported in the aggregate as “Amounts due government agencies,” in the accompanying consolidated balance sheets. State Medicaid programs and the federal Medicare program periodically adjust premium rates, including certain components of premium revenue that are subject to accounting estimates and are described below, and in our 2023 Annual Report on Form 10-K, Note 2, “Significant Accounting Policies,” under “Premium Revenue Recognition and Amounts Due Government Agencies,” and “Quality Incentives.” Minimum MLR, Medical Cost Corridors and Profit Sharing. A portion of our Medicaid premium revenue may be returned if certain minimum amounts are not spent on defined medical care costs as a percentage of premium revenue, or minimum medical loss ratio (“Minimum MLR”). Under certain medical cost corridor provisions, the health plans may receive additional premiums if amounts spent on medical care costs exceed a defined maximum threshold. This includes remaining risk corridors that were enacted by various states in 2020 in response to the reduced demand for medical services stemming from COVID-19. Our contracts with certain states contain profit sharing provisions under which we refund amounts to the states if our health plans generate profit above a certain specified percentage. In some cases, we are limited in the amount of administrative costs that we may deduct in calculating the refund, if any. We recorded aggregate liabilities under the terms of such contract provisions of $1,443 million and $1,344 million at March 31, 2024 and December 31, 2023, respectively, to amounts due government agencies. The Affordable Care Act (“ACA”) established a Minimum MLR of 85% for Medicare. Federal regulations define what constitutes medical costs and premium revenue. If the Minimum MLR is not met, we may be required to pay rebates to the federal government. Our dual-eligible plans may also be subject to state-specific Minimum MLRs, medical cost corridors, and profit-sharing provisions. We recognize estimated rebates as an adjustment to premium revenue in our consolidated statements of income. We recorded a liability under the terms of such contract provisions of $49 million and $64 million at March 31, 2024 and December 31, 2023, respectively, to amounts due government agencies. The ACA established a Minimum MLR of 80% for the Marketplace. If the Minimum MLR is not met, we may be required to pay rebates to our Marketplace policyholders. The Marketplace risk adjustment program discussed below is taken into consideration when computing the Minimum MLR. We recognize estimated rebates under the Minimum MLR as an adjustment to premium revenue in our consolidated statements of income. The amounts were insignificant at March 31, 2024 and December 31, 2023. Risk Adjustment. Our Medicare premiums are subject to retroactive increase or decrease based on the health status of our Medicare members (as measured by member risk score). We estimate our members’ risk scores and the related amount of Medicare revenue that will ultimately be realized for the periods presented based on our knowledge of our members’ health status, risk scores and CMS practices. We also estimate amounts owed to CMS for Part D settlements. We recorded a liability under the terms of such contract provisions of $91 million and $66 million at March 31, 2024 and December 31, 2023, respectively, to amounts due government agencies. Under this program for our Marketplace business, our health plans’ composite risk scores are compared with the overall average risk score for the relevant state and market pool. Generally, our health plans will make a risk adjustment payment into the pool if their composite risk scores are below the average risk score (risk adjustment payable), and will receive a risk adjustment payment from the pool if their composite risk scores are above the average risk score (risk adjustment receivable). We estimate our ultimate premium based on insurance policy year-to-date experience, and recognize estimated premiums relating to the risk adjustment program as an adjustment to premium revenue in our consolidated statements of income. As of March 31, 2024, Marketplace risk adjustment payables amounted to $267 million and related receivables amounted to $296 million, for a net receivable of $29 million. As of December 31, 2023, Marketplace risk adjustment payables amounted to $201 million and related receivables amounted to $241 million, for a net receivable of $40 million. Premium Deficiency Reserve on Loss Contracts We assess the profitability of our contracts to determine if it is probable that a loss will be incurred in the future by reviewing current results and forecasts. For purposes of this assessment, contracts are grouped in a manner consistent with our method of acquiring, servicing and measuring the profitability of such contracts. A premium deficiency reserve (“PDR”) is recognized if anticipated future medical care and administrative costs exceed anticipated future premium revenue, investment income and reinsurance recoveries. Once established, a PDR is reduced over the contract period as an offset to actual losses. Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, investments, receivables, and restricted investments. Our investments and a portion of our cash equivalents are managed by professional portfolio managers operating under documented investment guidelines. Our portfolio managers must obtain our prior approval before selling investments where the loss position of those investments exceeds certain levels. Our investments consist primarily of investment-grade debt securities with final maturities of less than 15 years, or less than 15 years average life for structured securities. Restricted investments are invested principally in cash, cash equivalents, U.S. Treasury securities, and corporate debt securities. Concentration of credit risk with respect to accounts receivable is limited because our payors consist principally of the federal government, and governments of each state in which our health plan subsidiaries operate. Income Taxes The provision for income taxes is determined using an estimated annual effective tax rate, which generally differs from the U.S. federal statutory rate primarily because of state taxes and nondeductible expenses such as certain compensation and other general and administrative expenses. The effective tax rate may be subject to fluctuations during the year as new information is obtained. Such information may affect the assumptions used to estimate the annual effective tax rate, including projected pretax earnings, the mix of pretax earnings in the various tax jurisdictions in which we operate, valuation allowances against deferred tax assets, the recognition or the reversal of the recognition of tax benefits related to uncertain tax positions, and changes in or the interpretation of tax laws in jurisdictions where we conduct business. We recognize deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities, along with net operating loss and tax credit carryovers. Recent Accounting Pronouncements Recent accounting pronouncements issued by the Financial Accounting Standards Board (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (“SEC”) did not have, nor does management expect such pronouncements to have, a significant impact on our present or future consolidated financial statements.
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Net Income Per Share |
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Net Income Per Share | Net Income Per Share The following table sets forth the calculation of basic and diluted net income per share:
______________________________ (1) The dilutive effect of all potentially dilutive common shares is calculated using the treasury stock method. (2) Source data for calculations in thousands.
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Business Combinations |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations | Business Combinations Bright Health Medicare. On January 1, 2024, we closed on our acquisition of Bright Health Medicare for $441 million in cash, consistent with our strategy to grow in our existing markets. For this transaction, we applied the acquisition method of accounting, where the total purchase price was preliminarily allocated to the tangible and intangible assets acquired and liabilities assumed, based on their fair values as of the acquisition date. We expect to complete the final determination of the purchase price allocation as soon as practicable, but no later than one year following the acquisition’s closing date in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations. Measurement period adjustments will be recorded in the period in which they are determined, as if they had been completed at the acquisition date. The pro forma effects of this acquisition for prior periods were not material to our consolidated results of operations. Acquisition costs amounted to $1 million in the aggregate for the period ended March 31, 2024, and were recorded as “General and administrative expenses” in the accompanying consolidated statements of income. The acquisition-date fair value of the consideration transferred consisted of the following, in millions:
The contingent consideration arrangement allows the seller to earn up to $100 million for the satisfaction of certain conditions within the stock purchase agreement by the fourth quarter of 2024. The fair value of the contingent consideration arrangement at the acquisition date was $86 million. This fair value measurement is based on inputs not observable in the market and thus represents a Level 3 measurement. We estimated the fair value using a probability-weighted scenario approach focused on existing and expected membership. On the acquisition date, we placed the $100 million into a third-party escrow and recorded a receivable of $14 million in relation to the fair value measurement. As of March 31, 2024, there were no significant changes in the assumptions for the outcome of the contingencies. The valuation of the assets acquired and liabilities assumed has not yet been finalized because the acquisition closed at the beginning of the quarter. Further, the finalization of purchase price adjustments as provided in the stock purchase agreement is expected to occur in the second half of 2024. As a result, provisional estimates have been recorded and are subject to change, primarily for accounts that include the use of estimates, such as medical claims and benefits payable, receivables, amounts due government agencies, certain acquired intangible assets, and certain tax assets and liabilities. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Such assets include synergies we expect to achieve as a result of the transaction, such as the use of our existing infrastructure to support the added membership, and future economic benefits arising from the assembled workforce. All of the goodwill was assigned to the Medicare segment and is deductible for income tax purposes. The following table summarizes the provisional fair values assigned to assets acquired and liabilities assumed, in millions.
The table below presents intangible assets acquired, by major class, for the Bright Health Medicare acquisition. The weighted-average amortization period, in the aggregate, is 11.1 years.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements We consider the carrying amounts of current assets and current liabilities to approximate their fair values because of the relatively short period of time between the origination of these instruments and their expected realization or payment. For our financial instruments measured at fair value on a recurring basis, we prioritize the inputs used in measuring fair value according to the three-tier fair value hierarchy. For a description of the methods and assumptions used to: a) estimate the fair value; and b) determine the classification according to the fair value hierarchy for each financial instrument, refer to our 2023 Annual Report on Form 10-K, Note 5, “Fair Value Measurements.” Our financial instruments measured at fair value on a recurring basis at March 31, 2024, were as follows:
Our financial instruments measured at fair value on a recurring basis at December 31, 2023, were as follows:
Fair Value Measurements – Disclosure Only The carrying amounts and estimated fair values of our notes payable are classified as Level 2 financial instruments. Fair value for these securities is determined using a market approach based on quoted market prices for similar securities in active markets or quoted prices for identical securities in inactive markets.
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Investments |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments Available-for-Sale We consider all of our investments classified as current assets to be available-for-sale. The following tables summarize our current investments as of the dates indicated:
The contractual maturities of our current investments as of March 31, 2024 are summarized below:
In the three months ended March 31, 2024, and 2023, maturities and redemptions of available-for-sale securities amounted to $188 million and $118 million, respectively, and sales amounted to $23 million and $253 million, respectively. Gross realized gains and losses from sales of available-for-sale securities are calculated under the specific identification method and are included in investment income. Gross realized investment gains were insignificant for the three months ended March 31, 2024, and 2023. Gross realized investment losses amounted to $2 million and $10 million in three months ended March 31, 2024 and 2023, respectively, and were reclassified into earnings from other comprehensive income on a net-of-tax basis. We have determined that unrealized losses at March 31, 2024, and December 31, 2023, primarily resulted from fluctuating interest rates, rather than a deterioration of the creditworthiness of the issuers. Therefore, we determined that an allowance for credit losses was not necessary. So long as we maintain the intent and ability to hold these securities to maturity, we are unlikely to experience realized losses. In the event that we dispose of these securities before maturity, we expect that realized losses, if any, will be insignificant. The following table segregates those available-for-sale investments that have been in a continuous loss position for less than 12 months, and those that have been in a continuous loss position for 12 months or more as of March 31, 2024:
The following table segregates those available-for-sale investments that have been in a continuous loss position for less than 12 months, and those that have been in a continuous loss position for 12 months or more as of December 31, 2023:
Restricted Investments Held-to-Maturity Pursuant to the regulations governing our state health plan subsidiaries, we maintain statutory deposits and deposits required by government authorities primarily in cash, cash equivalents, U.S. Treasury securities, and corporate debt securities. We also maintain restricted investments as protection against the insolvency of certain capitated providers. The use of these funds is limited as required by regulations in the various states in which we operate, or as needed in the event of insolvency of capitated providers. Therefore, such investments are reported as “Restricted investments” in the accompanying consolidated balance sheets. We have the ability to hold these restricted investments until maturity and, as a result, we would not expect the value of these investments to decline significantly due to a sudden change in market interest rates. Our held-to-maturity restricted investments are carried at amortized cost, which approximates fair value. Such investments amounted to $261 million at March 31, 2024, of which $197 million will mature in one year or less, $59 million will mature in one through five years, and $5 million will mature after five years.
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Medical Claims and Benefits Payable |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Medical Claims and Benefits Payable | Medical Claims and Benefits Payable The following table provides the details of our medical claims and benefits payable as of the dates indicated:
“Other” medical claims and benefits payable mainly includes amounts payable to certain providers for which we act as an intermediary on behalf of various government agencies without assuming financial risk. Such receipts and payments do not impact our consolidated statements of income. Non-risk provider payables amounted to $353 million and $481 million as of March 31, 2024, and December 31, 2023, respectively. The following tables present the components of the change in our medical claims and benefits payable for the periods indicated. The amounts presented for “Components of medical care costs related to: Prior years” represent the amount by which our original estimate of medical claims and benefits payable at the beginning of the year varied from the actual liabilities, based on information (principally the payment of claims) developed since those liabilities were first reported.
Our estimates of medical claims and benefits payable recorded at December 31, 2023, and 2022 developed favorably by approximately $334 million and $298 million as of March 31, 2024, and 2023, respectively. The favorable prior year development recognized in the three months ended March 31, 2024 was primarily due to lower than expected utilization of medical services by our members and improved operating performance, mainly in the Medicaid segment. Consequently, the ultimate costs recognized in 2024, as claims payments were processed, were lower than our estimates in 2023.
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The following table summarizes our outstanding debt obligations, all of which are non-current as of the dates reported below:
Credit Agreement We are party to a credit agreement (the “Credit Agreement”) which includes a revolving credit facility (“Credit Facility”) of $1.0 billion, among other provisions. The Credit Agreement has a term of five years, and all amounts outstanding will be due and payable on June 8, 2025. Borrowings under the Credit Agreement bear interest based, at our election, on a base rate or other defined rate, plus in each case, the applicable margin. In addition to interest payable on the principal amount of indebtedness outstanding from time to time under the Credit Agreement, we are required to pay a quarterly commitment fee. We have other relationships, including financial advisory and banking, with some parties to the Credit Agreement. The Credit Agreement contains customary non-financial and financial covenants. As of March 31, 2024, we were in compliance with all financial and non-financial covenants under the Credit Agreement. As of March 31, 2024, no amounts were outstanding under the Credit Facility. Senior Notes Our senior notes are described below. Each of these notes are senior unsecured obligations of the parent corporation, Molina Healthcare, Inc., and rank equally in right of payment with all existing and future senior debt, and senior to all existing and future subordinated debt of Molina Healthcare, Inc. In addition, each of the indentures governing the senior notes contain customary non-financial covenants and change of control provisions. As of March 31, 2024, we were in compliance with all non-financial covenants in the indentures governing the senior notes. The indentures governing the senior notes contain cross-default provisions that are triggered upon default by us or any of our subsidiaries on any indebtedness in excess of the amount specified in the applicable indenture. 4.375% Notes due 2028. We have $800 million aggregate principal amount of senior notes (the “4.375% Notes”) outstanding as of March 31, 2024, which are due June 15, 2028, unless earlier redeemed. Interest, at a rate of 4.375% per annum, is payable semiannually in arrears on June 15 and December 15. 3.875% Notes due 2030. We have $650 million aggregate principal amount of senior notes (the “3.875% Notes due 2030”) outstanding as of March 31, 2024, which are due November 15, 2030, unless earlier redeemed. Interest, at a rate of 3.875% per annum, is payable semiannually in arrears on May 15 and November 15. 3.875% Notes due 2032. We have $750 million aggregate principal amount of senior notes (the “3.875% Notes due 2032”) outstanding as of March 31, 2024, which are due May 15, 2032, unless earlier redeemed. Interest, at a rate of 3.875% per annum, is payable semiannually in arrears on May 15 and November 15.
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments | Segments We currently have four reportable segments consisting of: 1) Medicaid; 2) Medicare; 3) Marketplace; and 4) Other. Our reportable segments are consistent with how we currently manage the business and view the markets we serve. The Medicaid, Medicare, and Marketplace segments represent the government-funded or sponsored programs under which we offer managed healthcare services. The Other segment, which is insignificant to our consolidated results of operations, includes long-term services and supports consultative services in Wisconsin. The key metrics used to assess the performance of our Medicaid, Medicare, and Marketplace segments are premium revenue, medical margin and medical care ratio (“MCR”). MCR represents the amount of medical care costs as a percentage of premium revenue. Therefore, the underlying medical margin, or the amount earned by the Medicaid, Medicare, and Marketplace segments after medical costs are deducted from premium revenue, represents the most important measure of earnings reviewed by management, and is used by our chief executive officer to review results, assess performance, and allocate resources. The key metric used to assess the performance of our Other segment is service margin. The service margin is equal to service revenue minus cost of service revenue. We do not report total assets by segment since this is not a metric used to assess segment performance or allocate resources. The following table presents total revenue by segment. Inter-segment revenue was insignificant for all periods presented.
The following table reconciles margin by segment to consolidated income before income tax expense:
______________________ (1)Other operating revenues include premium tax revenue, investment income, and certain other revenue. (2)Other operating expenses include general and administrative expenses, premium tax expenses, depreciation and amortization, and certain other operating expenses.
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Commitments and Contingencies |
3 Months Ended |
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Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings The healthcare industry is subject to numerous laws and regulations of federal, state, and local governments, as well as various contractual provisions, governing our operations. Compliance with these laws, regulations, and contractual provisions can be subject to government audit, review, and interpretation, as well as regulatory actions. Penalties associated with violations of these laws, regulations, and contractual provisions can include significant fines and penalties, temporary or permanent exclusion from participating in publicly funded programs, a limitation on our ability to market or sell products, the repayment of previously billed and collected revenues, and reputational damage. We are involved in legal actions in the ordinary course of business including, but not limited to, various employment claims, vendor disputes and provider claims. Some of these legal actions seek monetary damages, including claims for punitive damages, which may not be covered by insurance. We review legal matters and update our estimates, or range of estimates, of reasonably possible losses and related disclosures, as necessary. We have accrued liabilities for legal matters for which we deem the loss to be both probable and reasonably estimable. These liability estimates could change as a result of further developments. The outcome of these legal actions are inherently uncertain. An adverse determination in one or more of these pending matters could have a material adverse effect on our consolidated financial position, results of operations, or cash flows. Kentucky RFP. On September 4, 2020, Anthem Kentucky Managed Care Plan, Inc. (“Anthem”) brought an action in Franklin County Circuit Court against the Kentucky Finance and Administration Cabinet, the Kentucky Cabinet for Health and Family Services, and all of the five winning bidder health plans, including our Kentucky health plan. On September 9, 2022, the Kentucky Court of Appeals ruled that, with regard to the earlier Circuit Court ruling granting Anthem relief, the Circuit Court should not have invalidated the 2020 procurement and thus should not have awarded a contract to Anthem. Anthem sought discretionary review by the Kentucky Supreme Court (“KSC”) of the ruling by the Court of Appeals. On April 19, 2023, KSC granted Anthem’s request for discretionary review and ordered legal briefing, which the parties completed in September 2023. The KSC held oral argument on March 7, 2024. On March 14, 2024, the KSC entered its Order, which affirmed the Kentucky Court of Appeals and thus allows our Kentucky health plan to retain its Medicaid contract. On March 25, 2024, the Franklin Circuit Court held a hearing on Anthem’s motion for a status conference to discuss other alleged 2020 procurement scoring error arguments, which Anthem asserts were not among the issues already decided by the appellate courts. The winning bidder health plans and the two Kentucky Cabinet parties all opposed Anthem’s motion on the grounds that the KSC’s Order resolved the entire action. The Franklin Circuit Court stated its intention to quickly rule on whether Anthem may pursue further scoring error arguments in the trial court. On April 3, 2024, Anthem filed a motion for reconsideration of the KSC Order. All defendants filed their responses by April 10, 2024. Pending further KSC or Franklin Circuit Court Orders, our Kentucky health plan will continue to operate for the foreseeable future under its current Medicaid contract. At this time, the Company cannot predict the final outcome or timing of conclusion of the litigation. No party is demanding damages from the Company, although Anthem may continue its effort to challenge the validity of the 2020 procurement selection process through a successive appeal. Puerto Rico. On August 13, 2021, Molina Healthcare of Puerto Rico, Inc. (“MHPR”) filed a complaint with the Commonwealth of Puerto Rico, Court of First Instance, San Juan (State Court) asserting, among other claims, breach of contract against Puerto Rico Health Insurance Administration (“ASES”). On September 13, 2021, ASES filed a counterclaim and a third-party complaint against MHPR and the Company. The parties are engaged in settlement conversations. A status hearing was held on September 28, 2023, in which ASES and Molina informed the Court of the ongoing settlement conversations. On January 15, 2024, ASES and Molina informed the court that they had reached an agreement in principle, and the Court scheduled a status conference on March 5, 2024. At the March 5, 2024 status conference, ASES and Molina provided an update of the negotiations. The Court scheduled a status conference for May 20, 2024. The Company cannot predict the outcome, or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter. Texas Qui Tam Litigation. On May 7, 2013, a relator filed under seal a qui tam action in Texas state court against Molina Healthcare, Inc. and Molina Healthcare of Texas, Inc., asserting claims under the Texas Medicaid Fraud Prevention Act (“TMFPA”) on behalf of the State of Texas. The original petition alleged that Molina Healthcare of Texas knowingly failed to assess its STAR+PLUS members in accordance with the terms of its Medicaid contract with the State and made false statements to the State concerning those assessments that permitted Molina Healthcare of Texas to receive from the State unnecessary payments. As required by the TMFPA, the original petition was filed in camera and under seal, and without Molina’s awareness, to permit the State to decide whether to intervene and assume responsibility for prosecuting the lawsuit. In 2019, the State declined to intervene. In June 2019, as a result of the State’s election to decline intervention, the trial court unsealed the original petition, at which time Molina became aware of the lawsuit. The relator amended her original petition and served Molina in July 2019. In September 2019, Molina filed a motion to dismiss the relator’s claims under the Texas Citizens Participation Act. After the trial court denied the motion, and following extended appellate proceedings which automatically stayed all trial court proceedings, discovery in the lawsuit commenced in late 2021. The relator’s third amended petition was filed on January 19, 2024. The petition alleges that, during the periods in question some ten years ago, Molina failed to assess STAR+PLUS members for personal attendant services, failed to provide those members with contractually required health care benefits, and misrepresented to the State Molina’s capacity to perform the assessments and the status of the assessments. Based on these allegations, the relator contends that Molina is liable to the State under the TMFPA for statutorily defined civil remedies, disgorgement of previous capitation payments, and interest. Molina denies the relator’s allegations as well as any liability in the lawsuit, and intends to defend against the relator’s allegations vigorously. The lawsuit is currently in the discovery phase, with trial set before the Texas District Court, Travis County in late September 2024. The case remains subject to significant additional proceedings, and due to numerous factors of uncertainty presented in the case, we are currently unable to make a reasonable estimate, or range of estimates, with regard to the ultimate outcome of this matter.
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Pay vs Performance Disclosure - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 31, 2024 |
Mar. 31, 2023 |
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Pay vs Performance Disclosure | ||
Net Income (Loss) Attributable to Parent | $ 301 | $ 321 |
Insider Trading Arrangements |
3 Months Ended |
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Mar. 31, 2024
shares
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Trading Arrangements, by Individual | |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
James Woys [Member] | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | On February 20, 2024, James Woys, the Company’s Senior Executive Vice President and Chief Operating Officer, adopted a stock trading plan, pursuant to which he may sell up to 20,000 shares of the Company’s common stock prior to November 29, 2024. This trading plan was entering into during an open insider trading window and is intended to satisfy the affirmative defense rule of Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended, and the Company’s policies regarding transactions in our securities. |
Name | James Woys |
Title | Senior Executive Vice President and Chief Operating Officer |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | February 20, 2024 |
Arrangement Duration | 283 days |
Aggregate Available | 20,000 |
Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Consolidation and Interim Financial Information | Consolidation and Interim Financial Information The consolidated financial statements include the accounts of Molina Healthcare, Inc. and its subsidiaries. In the opinion of management, these financial statements reflect all normal recurring adjustments, which are considered necessary for a fair presentation of the results as of the dates and for the interim periods presented. All significant intercompany balances and transactions have been eliminated. The consolidated results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results for the entire year ending December 31, 2024. The unaudited consolidated interim financial statements have been prepared under the assumption that users of the interim financial data have either read or have access to our audited consolidated financial statements for the fiscal year ended December 31, 2023. Accordingly, certain disclosures that would substantially duplicate the disclosures contained in our December 31, 2023, audited consolidated financial statements have been omitted.
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Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Estimates also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and short-term, highly liquid investments that are both readily convertible into known amounts of cash and have a maturity of three months or less on the date of purchase.
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Receivables | Receivables Receivables consist primarily of premium amounts due from government agencies, which are subject to potential retroactive adjustments. We apply the current expected credit loss model to measure expected credits losses on our receivables based on available information about past events and reasonable and supportable forecasts. Because substantially all of our receivable amounts are readily determinable and substantially all of our creditors are governmental authorities, our allowance for credit losses is insignificant. Any amounts determined to be uncollectible are charged to expense when such determination is made.
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Risk Adjustment and Premium Deficiency Reserve on Loss Contracts | Premium Revenue Recognition and Amounts Due Government Agencies Premium revenue is generated from our contracts with state and federal agencies, in connection with our participation in the Medicaid, Medicare, and Marketplace programs. Premium revenue is generally received based on per member per month (“PMPM”) rates established in advance of the periods covered. These premium revenues are recognized in the month that members are entitled to receive healthcare services, and premiums collected in advance are deferred. Many of our contracts contain provisions that may adjust or limit revenue or profit, as described below. Consequently, we recognize premium revenue as it is earned under such provisions. Liabilities accrued for premiums to be returned under such provisions are reported in the aggregate as “Amounts due government agencies,” in the accompanying consolidated balance sheets. State Medicaid programs and the federal Medicare program periodically adjust premium rates, including certain components of premium revenue that are subject to accounting estimates and are described below, and in our 2023 Annual Report on Form 10-K, Note 2, “Significant Accounting Policies,” under “Premium Revenue Recognition and Amounts Due Government Agencies,” and “Quality Incentives.” Under this program for our Marketplace business, our health plans’ composite risk scores are compared with the overall average risk score for the relevant state and market pool. Generally, our health plans will make a risk adjustment payment into the pool if their composite risk scores are below the average risk score (risk adjustment payable), and will receive a risk adjustment payment from the pool if their composite risk scores are above the average risk score (risk adjustment receivable). We estimate our ultimate premium based on insurance policy year-to-date experience, and recognize estimated premiums relating to the risk adjustment program as an adjustment to premium revenue in our consolidated statements of income.Premium Deficiency Reserve on Loss Contracts We assess the profitability of our contracts to determine if it is probable that a loss will be incurred in the future by reviewing current results and forecasts. For purposes of this assessment, contracts are grouped in a manner consistent with our method of acquiring, servicing and measuring the profitability of such contracts. A premium deficiency reserve (“PDR”) is recognized if anticipated future medical care and administrative costs exceed anticipated future premium revenue, investment income and reinsurance recoveries. Once established, a PDR is reduced over the contract period as an offset to actual losses.
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Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, investments, receivables, and restricted investments. Our investments and a portion of our cash equivalents are managed by professional portfolio managers operating under documented investment guidelines. Our portfolio managers must obtain our prior approval before selling investments where the loss position of those investments exceeds certain levels. Our investments consist primarily of investment-grade debt securities with final maturities of less than 15 years, or less than 15 years average life for structured securities. Restricted investments are invested principally in cash, cash equivalents, U.S. Treasury securities, and corporate debt securities. Concentration of credit risk with respect to accounts receivable is limited because our payors consist principally of the federal government, and governments of each state in which our health plan subsidiaries operate.
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Income Taxes | Income Taxes The provision for income taxes is determined using an estimated annual effective tax rate, which generally differs from the U.S. federal statutory rate primarily because of state taxes and nondeductible expenses such as certain compensation and other general and administrative expenses. The effective tax rate may be subject to fluctuations during the year as new information is obtained. Such information may affect the assumptions used to estimate the annual effective tax rate, including projected pretax earnings, the mix of pretax earnings in the various tax jurisdictions in which we operate, valuation allowances against deferred tax assets, the recognition or the reversal of the recognition of tax benefits related to uncertain tax positions, and changes in or the interpretation of tax laws in jurisdictions where we conduct business. We recognize deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities, along with net operating loss and tax credit carryovers.
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Recent Accounting Pronouncements | Recent Accounting Pronouncements Recent accounting pronouncements issued by the Financial Accounting Standards Board (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (“SEC”) did not have, nor does management expect such pronouncements to have, a significant impact on our present or future consolidated financial statements.
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Significant Accounting Policies (Tables) |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents reported within the accompanying consolidated balance sheets that sum to the total of the same such amounts presented in the accompanying consolidated statements of cash flows. The restricted cash and cash equivalents presented below are included in “Restricted investments” in the accompanying consolidated balance sheets.
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Schedule of Restricted Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash and cash equivalents reported within the accompanying consolidated balance sheets that sum to the total of the same such amounts presented in the accompanying consolidated statements of cash flows. The restricted cash and cash equivalents presented below are included in “Restricted investments” in the accompanying consolidated balance sheets.
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Schedule of Receivables |
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Net Income Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Denominators for The Computation of Basic and Diluted Earnings Per Share | The following table sets forth the calculation of basic and diluted net income per share:
______________________________ (1) The dilutive effect of all potentially dilutive common shares is calculated using the treasury stock method. (2) Source data for calculations in thousands.
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Business Combinations (Tables) |
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition | The acquisition-date fair value of the consideration transferred consisted of the following, in millions:
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Schedule of The Provisional Fair Values Assigned To Assets Acquired and Liabilities Assumed | The following table summarizes the provisional fair values assigned to assets acquired and liabilities assumed, in millions.
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Schedule of Intangible Assets | The table below presents intangible assets acquired, by major class, for the Bright Health Medicare acquisition. The weighted-average amortization period, in the aggregate, is 11.1 years.
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value of Assets Measured on Recurring Basis | Our financial instruments measured at fair value on a recurring basis at March 31, 2024, were as follows:
Our financial instruments measured at fair value on a recurring basis at December 31, 2023, were as follows:
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Schedule of Fair Value Measurements of Senior Notes |
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Investments (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Investments | The following tables summarize our current investments as of the dates indicated:
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Schedule of Contractual Maturities of Investments | The contractual maturities of our current investments as of March 31, 2024 are summarized below:
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Schedule of Available-for-Sale Investments | The following table segregates those available-for-sale investments that have been in a continuous loss position for less than 12 months, and those that have been in a continuous loss position for 12 months or more as of March 31, 2024:
The following table segregates those available-for-sale investments that have been in a continuous loss position for less than 12 months, and those that have been in a continuous loss position for 12 months or more as of December 31, 2023:
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Medical Claims and Benefits Payable (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Liability for Unpaid Claims and Claims Adjustment Expense | The following table provides the details of our medical claims and benefits payable as of the dates indicated:
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Schedule of Components of The Change in Medical Claims and Benefits Payable | The following tables present the components of the change in our medical claims and benefits payable for the periods indicated. The amounts presented for “Components of medical care costs related to: Prior years” represent the amount by which our original estimate of medical claims and benefits payable at the beginning of the year varied from the actual liabilities, based on information (principally the payment of claims) developed since those liabilities were first reported.
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Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long Term Debt | The following table summarizes our outstanding debt obligations, all of which are non-current as of the dates reported below:
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Segments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Operating Segment Information | The following table presents total revenue by segment. Inter-segment revenue was insignificant for all periods presented.
The following table reconciles margin by segment to consolidated income before income tax expense:
______________________ (1)Other operating revenues include premium tax revenue, investment income, and certain other revenue. (2)Other operating expenses include general and administrative expenses, premium tax expenses, depreciation and amortization, and certain other operating expenses.
|
Significant Accounting Policies - Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Millions |
Mar. 31, 2024 |
Dec. 31, 2023 |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|---|---|
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 4,513 | $ 4,848 | $ 4,554 | |
Restricted cash and cash equivalents | 59 | 43 | ||
Total cash, cash equivalents, and restricted cash and cash equivalents presented in the consolidated statements of cash flows | $ 4,572 | $ 4,908 | $ 4,597 | $ 4,048 |
Significant Accounting Policies - Receivables (Details) - USD ($) $ in Millions |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables | $ 3,350 | $ 3,104 |
Government receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables | 2,270 | 2,354 |
Pharmacy rebate receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables | 369 | 330 |
Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total receivables | $ 711 | $ 420 |
Significant Accounting Policies - Amounts Due To Government Agencies (Details) - USD ($) $ in Millions |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Amounts Due To Government Agencies, Medicaid Program [Abstract] | ||
Medical premiums liability, medical care costs threshold | $ 1,443 | $ 1,344 |
Percent due to medicare, medical loss ratio | 85.00% | |
Amounts due to medicare | $ 49 | $ 64 |
Percent due to medicare, medical loss ratio of marketplace | 80.00% |
Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Dec. 31, 2023 |
|
Schedule of Premium Revenue by Health Plan Type [Line Items] | ||
Amounts due to government agencies, risk adjustment and part d risk sharing | $ 91 | $ 66 |
Risk adjustment payable | 267 | 201 |
Risk adjustment receivable | 296 | 241 |
Risk adjustment, net receivable | $ 29 | $ 40 |
Maturity period (less than) | 15 years | |
Structured Securities | ||
Schedule of Premium Revenue by Health Plan Type [Line Items] | ||
Average maturity period (less than) | 15 years |
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Numerator: | ||||
Net income | $ 301 | $ 321 | ||
Denominator: | ||||
Shares outstanding at the beginning of the period (in shares) | 57.8 | 57.4 | ||
Weighted-average number of shares issued: | ||||
Stock-based compensation (in shares) | 0.1 | 0.1 | ||
Denominator for basic net income per share (in shares) | 57.9 | 57.5 | ||
Effect of dilutive securities: | ||||
Stock-based compensation (in shares) | 0.4 | 0.5 | ||
Denominator for diluted net income per share (in shares) | 58.3 | 58.0 | ||
Net income per share: | ||||
Net income per share - Basic (in dollars per share) | $ 5.21 | $ 5.58 | ||
Net income per share - Diluted (in dollars per share) | $ 5.17 | $ 5.52 |
Business Combinations - Narrative (Details) - Bright Health Medicare - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jan. 01, 2024 |
Mar. 31, 2024 |
|
Business Acquisition, Contingent Consideration [Line Items] | ||
Cash paid for acquisition | $ 441 | |
Acquisition costs | $ 1 | |
Contingent consideration liabilities | 100 | |
Consideration transferred | 86 | |
Third-party escrow | 100 | |
Acquired receivable, fair value | $ 14 |
Business Combinations - Summary of Fair Value Consideration (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Jan. 01, 2024 |
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Business Combination, Separately Recognized Transactions [Line Items] | |||
Cash | $ 295 | $ 0 | |
Bright Health Medicare | |||
Business Combination, Separately Recognized Transactions [Line Items] | |||
Cash | $ 341 | ||
Contingent consideration | 86 | ||
Fair value of net assets acquired | $ 427 |
Business Combinations - Schedule of The Provisional Fair Values Assigned To Assets Acquired and Liabilities Assumed (Details) - Bright Health Medicare $ in Millions |
Sep. 01, 2023
USD ($)
|
---|---|
Assets acquired: | |
Current assets | $ 315 |
Goodwill | 357 |
Intangible assets | 141 |
Other long-term assets | 45 |
Liabilities assumed: | |
Medical claims and benefits payable | (391) |
Amounts due government agencies | (24) |
Accounts payable, accrued and other long-term liabilities | (16) |
Fair value of net assets acquired | $ 427 |
Business Combinations - Intangible Assets Acquired (Details) - Bright Health Medicare $ in Millions |
Sep. 01, 2023
USD ($)
|
---|---|
Acquired Finite-Lived Intangible Assets [Line Items] | |
Weighted-average amortization period | 11 years 1 month 6 days |
Intangible assets | $ 141 |
Contract rights - member list | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | $ 104 |
Intangible asset useful life | 10 years |
Trade name | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | $ 32 |
Intangible asset useful life | 15 years |
Provider network | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Intangible assets | $ 5 |
Intangible asset useful life | 10 years |
Investments - Contractual Maturities of Available-for-Sale Investments (Details) - USD ($) $ in Millions |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Amortized Cost | ||
Due in one year or less | $ 634 | |
Due after one year through five years | 2,419 | |
Due after five years through ten years | 431 | |
Due after ten years | 1,053 | |
Amortized Cost | 4,537 | $ 4,367 |
Estimated Fair Value | ||
Due in one year or less | 625 | |
Due after one year through five years | 2,366 | |
Due after five years through ten years | 427 | |
Due after ten years | 1,006 | |
Total | $ 4,424 |
Investments - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Investments, Debt and Equity Securities [Abstract] | ||
Sale and maturity of debt securities, available-for-sale | $ 188 | $ 118 |
Sale of debt securities, available-for-sale | 23 | 253 |
Gross realized investment gains | 0 | 0 |
Gross realized investment losses | 2 | $ 10 |
Amortized cost, due in one year or less | 197 | |
Amortized cost, due one year through five years | 59 | |
Amortized cost, due after five years | $ 5 |
Medical Claims and Benefits Payable - Medical Claims and Benefits Payable (Details) - USD ($) $ in Millions |
Mar. 31, 2024 |
Dec. 31, 2023 |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|---|---|
Other Liabilities Disclosure [Abstract] | ||||
Claims incurred but not paid (“IBNP”) | $ 3,239 | $ 2,901 | ||
Pharmacy payable | 229 | 202 | ||
Capitation payable | 152 | 100 | ||
Other | 951 | 1,001 | ||
Total | $ 4,571 | $ 4,204 | $ 3,824 | $ 3,528 |
Medical Claims and Benefits Payable - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|
Other Liabilities Disclosure [Abstract] | |||
Non-risk provider payables | $ 353 | $ 481 | |
Prior period claims, favorable development | $ (334) | $ (298) |
Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Millions |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Debt Instrument [Line Items] | ||
Deferred debt issuance costs | $ (20) | $ (20) |
Total | $ 2,180 | 2,180 |
Senior Notes | 4.375% Notes due 2028 | ||
Debt Instrument [Line Items] | ||
Percentage of contractual interest rate on notes | 4.375% | |
Non-current portion of long-term debt | $ 800 | 800 |
Senior Notes | 3.875% Notes due 2030 | ||
Debt Instrument [Line Items] | ||
Percentage of contractual interest rate on notes | 3.875% | |
Non-current portion of long-term debt | $ 650 | 650 |
Senior Notes | 3.875% Notes due 2032 | ||
Debt Instrument [Line Items] | ||
Percentage of contractual interest rate on notes | 3.875% | |
Non-current portion of long-term debt | $ 750 | $ 750 |
Debt - Narrative (Details) |
3 Months Ended |
---|---|
Mar. 31, 2024
USD ($)
| |
Line of Credit | |
Debt Instrument [Line Items] | |
Debt term | 5 years |
Line of Credit | Credit Facility | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 1,000,000,000 |
Amount outstanding under letter of credit | $ 0 |
Senior Notes | 4.375% Notes due 2028 | |
Debt Instrument [Line Items] | |
Percentage of contractual interest rate on notes | 4.375% |
Face amount | $ 800,000,000 |
Senior Notes | 3.875% Notes due 2030 | |
Debt Instrument [Line Items] | |
Percentage of contractual interest rate on notes | 3.875% |
Face amount | $ 650,000,000 |
Senior Notes | 3.875% Notes due 2032 | |
Debt Instrument [Line Items] | |
Percentage of contractual interest rate on notes | 3.875% |
Face amount | $ 750,000,000 |
Segments - Narrative (Details) |
3 Months Ended |
---|---|
Mar. 31, 2024
segment
| |
Segment Reporting [Abstract] | |
Reportable segments | 4 |
Segments - Operating Segment Information (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Segment Reporting Information [Line Items] | ||
Total revenue | $ 9,931 | $ 8,149 |
Medicaid | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 7,873 | 6,578 |
Medicare | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 1,457 | 1,056 |
Marketplace | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 581 | 497 |
Other | ||
Segment Reporting Information [Line Items] | ||
Total revenue | $ 20 | $ 18 |
Segments - Reconciliation of Gross Margin to Consolidated Income (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Segment Reporting Information [Line Items] | ||
Less: other operating expenses | $ (9,505) | $ (7,694) |
Operating income | 426 | 455 |
Less: interest expense | 27 | 28 |
Income before income tax expense | 399 | 427 |
Operating segments | ||
Segment Reporting Information [Line Items] | ||
Total margin | 1,092 | 1,016 |
Operating segments | Medicaid | ||
Segment Reporting Information [Line Items] | ||
Total margin | 775 | 734 |
Operating segments | Medicare | ||
Segment Reporting Information [Line Items] | ||
Total margin | 163 | 126 |
Operating segments | Marketplace | ||
Segment Reporting Information [Line Items] | ||
Total margin | 152 | 154 |
Operating segments | Other | ||
Segment Reporting Information [Line Items] | ||
Total margin | 2 | 2 |
Other operating | ||
Segment Reporting Information [Line Items] | ||
Add: other operating revenues | 407 | 246 |
Less: other operating expenses | $ (1,073) | $ (807) |
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