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     114  0 Kommentare Molina Healthcare Reports Fourth Quarter and Year-End 2019 Financial Results

    Molina Healthcare, Inc. (NYSE: MOH) today reported net income for the fourth quarter of 2019 of $168 million, or $2.67 per diluted share, compared to net income of $201 million, or $3.01 per diluted share, for the fourth quarter of 2018. The Company also reported net income for the year ended December 31, 2019, of $737 million, or $11.47 per diluted share, compared to net income of $707 million, or $10.61 per diluted share, for the year ended December 31, 2018. Financial results for the fourth quarter and full year 2019 are summarized below:

     

     

    Three Months Ended

    Year Ended

     

    December 31,

    December 31,

     

    2019

    2018

    2019

    2018

     

    (In millions, except per share results)

    Premium Revenue

    $

    4,123

     

    $

    4,438

     

    $

    16,208

     

    $

    17,612

     

    Total Revenue

    $

    4,274

     

    $

    4,664

     

    $

    16,829

     

    $

    18,890

     

    Pre-Tax Income

    $

    222

     

    $

    256

     

    $

    972

     

    $

    999

     

    Net Income

    $

    168

     

    $

    201

     

    $

    737

     

    $

    707

     

    EPS – Diluted

    $

    2.67

     

    $

    3.01

     

    $

    11.47

     

    $

    10.61

     

     

    MCR

     

    86.0

    %

     

    85.1

    %

     

    85.8

    %

     

    85.9

    %

    G&A Ratio

     

    8.0

    %

     

    7.2

    %

     

    7.7

    %

     

    7.1

    %

    Pre-Tax Margin

     

    5.2

    %

     

    5.5

    %

     

    5.8

    %

     

    5.3

    %

    Effective Tax Rate

     

    24.3

    %

     

    21.4

    %

     

    24.2

    %

     

    29.2

    %

    After-Tax Margin

     

    3.9

    %

     

    4.3

    %

     

    4.4

    %

     

    3.7

    %

     

    Highlights include:

    • Premium revenue was $4.1 billion for the fourth quarter of 2019, a 7.1% decrease compared to the fourth quarter of 2018.
    • Medical care ratio (MCR) was 86.0% for the fourth quarter of 2019, compared to 85.1% for the fourth quarter of 2018.
    • General and administrative (G&A) expense ratio increased to 8.0% for the fourth quarter of 2019, compared to 7.2% for the fourth quarter of 2018.
    • After-tax margin was 3.9% for the fourth quarter of 2019, compared to 4.3% for the fourth quarter of 2018.
    • Net income for the year ended December 31, 2019, increased to $737 million, compared to $707 million for 2018, and after-tax margin increased to 4.4% for 2019, compared to 3.7% for 2018.
    • In December 2019, the Company’s Board of Directors authorized a share repurchase program of up to $500 million, and through February 7th, the Company repurchased an aggregate of approximately 1.9 million shares for $257 million, at an average cost of $133.23 per share.
    • Operating cash flows for the year ended December 31, 2019, were $427 million.
    • Introduced full year 2020 earnings guidance, including GAAP earnings per diluted share of $11.20 - $11.70.
    • In October 2019, the Company announced that it entered into a definitive agreement to acquire certain assets of YourCare HealthPlan for approximately $40 million. Molina will assume the rights to serve approximately 46,000 Medicaid members in Western New York. The acquisition is expected to close in the first half of 2020.
    • In January 2020, the Company announced that it entered into a definitive agreement to acquire all of the capital stock of NextLevel Health Partners for approximately $50 million. Molina will assume the rights to serve approximately 50,000 Medicaid and Managed Long-Term Services and Supports members in Illinois’ Cook County. The acquisition is expected to close in the first half of 2020.

    Joe Zubretsky, president and CEO, said, “We are pleased with our fourth quarter and full year results. We improved our Medicaid and Medicare margins and achieved exceptional Marketplace margins. Overall, we delivered 4.4 percent after-tax margins and earnings per share growth of 8 percent.” Mr. Zubretsky continued, “Going forward, 2020 represents an important year in our pivot to growth strategy with a return to top-line growth. Each of our three business lines are well positioned to grow in 2020 and beyond.”

    Premium Revenue

    Premium revenue for the fourth quarter of 2019 decreased 7.1% to $4.1 billion compared to $4.4 billion for the fourth quarter of 2018, which was in line with the Company’s expectations.

    For the year ended December 31, 2019, premium revenue decreased 8.0% to $16.2 billion, from $17.6 billion for the comparable period in 2018. For both periods, the lower premium revenue is primarily a result of previously announced losses of Medicaid membership in New Mexico and Florida.

    Medical Care Ratio

    The consolidated MCR for the fourth quarter of 2019 increased to 86.0%, compared to 85.1% for the fourth quarter of 2018, primarily due to the increased Marketplace MCR. Prior period reserve development in the quarter was not material.

    The MCR for the year ended December 31, 2019, improved to 85.8%, compared to 85.9% for the comparable period in 2018, due to a combination of the following:

    • The Medicaid MCR improved to 88.0%, compared to 90.0% for the year ended December 31, 2018, due to improvement in all programs.
    • The Medicare MCR increased to 85.3%, compared to 84.5% for the year ended December 31, 2018, due to fluctuation of medical care costs in certain markets.
    • The Marketplace MCR was 68.2%, compared to 58.9% for the year ended December 31, 2018. The MCR in 2018 was favorably impacted by reduced medical care costs due to Cost Sharing Reduction (CSR) subsidies related to 2017 dates of service, while the current year was impacted by a relatively smaller benefit from prior-year Marketplace risk adjustment compared to 2018.

    General and Administrative Expense Ratio

    General and administrative expenses were 8.0% of total revenues for the fourth quarter of 2019, compared to 7.2% for the fourth quarter of 2018.

    For the year ended December 31, 2019, the G&A ratio was 7.7%, compared to 7.1% for the comparable prior-year period. In both periods, the year-over-year increases are due mainly to the year-over-year decline in total revenues.

    Interest Expense

    Interest expense was $20 million for the fourth quarter of 2019, compared to $24 million for the fourth quarter of 2018. The decline was due to the repayment of convertible notes in 2019.

    Balance Sheet

    Cash and investments at the parent company amounted to $997 million as of December 31, 2019, compared to $796 million as of September 30, 2019.

    For the fourth quarter of 2019, the parent company received $305 million of dividends from the regulated health plan subsidiaries.

    The Company repaid $240 million of principal on the convertible notes in 2019. The impact of capital deployment actions in 2019 resulted in lower interest expense, a net gain on repayment of the convertible notes and a lower share count.

    In early December 2019, the Company's board of directors authorized the purchase of up to $500 million in aggregate of the Company's common stock. Pursuant to a 10b5-1 trading plan, under this authorization the Company purchased approximately 400,000 shares for $54 million through December 31, 2019, and through February 7th, the Company has purchased in total approximately 1.9 million shares for $257 million.

    Cash Flow

    Operating cash flows for the year ended December 31, 2019, amounted to $427 million and were higher compared to the year ended December 31, 2018, primarily due to the normal fluctuations in timing of premium receipts.

    Outlook

    The Company issued its full year 2020 earnings guidance, including GAAP earnings per diluted share of $11.20 - $11.70 and premium revenue growth of 7.4%.

    Full year guidance highlights:

    • Medicaid after-tax margins are expected to perform well benefiting from stable rate and cost trend environments.
    • Medicare after-tax margins are expected to be strong despite the impact of the Health Insurer Fee.
    • Marketplace after-tax margins are expected to be lower reflecting pricing actions taken for the year.

    Full year guidance reflects the following:

    • The reintroduction of the Health Insurer Fee in 2020 with an impact of approximately $0.30 per diluted share.
    • Steady state in Texas for the full year 2020. The Company is currently exercising its protest rights on the recently announced STAR+PLUS RFP award. The Company believes that the effective date of the new contract would be no earlier than January 1, 2021.
    • The YourCare Health Plan and NextLevel Health Partners acquisitions are not included in guidance as the transactions have not closed. Together they have over $500 million in annualized premium revenue.
     

    Full Year 2020 Guidance (1)

    Premium Revenue

     

    ~$17.4B

    Medicaid

     

    ~$13.3B

    Medicare

     

    ~$2.5B

    Marketplace

     

    ~$1.6B

    Premium Tax Revenue

     

    ~$565M

    Health Insurer Fees Reimbursed

     

    ~$280M

    Total Revenue

     

    ~$18.3B

    Interest Expense

     

    ~$85M

    Net Income

     

    $674M - $704M

    EPS - Diluted

     

    $11.20 - $11.70

    Diluted Shares

     

    ~60.2M

     

     

     

    Total Membership

     

    ~3.4M

    Medicaid and Medicare

     

    ~3.1M

    Marketplace

     

    ~310K

     

     

     

    Ratios:

     

     

    MCR

     

    86.2% - 86.4%

    G&A Ratio

     

    ~7.2%

    Effective Tax Rate

     

    30.8% - 31.1%

    After-Tax Margin

     

    3.7% - 3.8%

    Medicaid

     

    3.2% - 3.4%

    Medicare

     

    5.6% - 5.7%

    Marketplace

     

    4.7% - 4.9%

    ___________________________

    (1) All amounts are rounded and approximations.

    Press Release Format

    In an effort to streamline its earnings release, beginning in the first quarter of 2020, the Company will report its financial data by government program as seen on page 9, and schedules on pages 14 - 20 will no longer be published.

    Conference Call

    Management will host a conference call and webcast to discuss Molina Healthcare’s fourth quarter and year-end 2019 results at 8:00 a.m. Eastern time on Tuesday, February 11, 2020. The number to call for the interactive teleconference is (877) 883-0383 and the confirmation number is 6197632. A telephonic replay of the conference call will be available through Tuesday, February 18, 2020, by dialing (877) 344-7529 and entering confirmation number 10137536. A live audio broadcast of this conference call will be available on Molina Healthcare’s website, molinahealthcare.com. A 30-day online replay will be available approximately an hour following the conclusion of the live broadcast.

    About Molina Healthcare

    Molina Healthcare, Inc., a FORTUNE 500 company, provides managed healthcare services under the Medicaid and Medicare programs and through the state insurance marketplaces. Through its locally operated health plans, Molina Healthcare served approximately 3.3 million members as of December 31, 2019. For more information about Molina Healthcare, please visit molinahealthcare.com.

    Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

    This earnings release contains forward-looking statements regarding the Company’s 2020 guidance, as well as its plans, expectations, and anticipated future events. Actual results could differ materially due to numerous known and unknown risks and uncertainties. Those risks and uncertainties are discussed in the section entitled “Risk Factors,” and the section entitled “Forward-Looking Statements” in our Annual Report on Form 10-K for the year ended December 31, 2018, and our most recent Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, which are on file with the SEC. Additional information will also be set forth in our Annual Report on Form 10-K for the year ended December 31, 2019.

    These reports can be accessed under the investor relations tab of the Company’s website or on the SEC’s website at sec.gov. Given these risks and uncertainties, the Company can give no assurances that its forward-looking statements will prove to be accurate, or that any other results or events projected or contemplated by its forward-looking statements will in fact occur, and the Company cautions investors not to place undue reliance on these statements. All forward-looking statements in this release represent the Company’s judgment as of February 10, 2020, and, except as otherwise required by law, the Company disclaims any obligation to update any forward-looking statements to conform the statement to actual results or changes in its expectations.

     

    UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

     

     

    Three Months Ended

     

    Year Ended

     

    December 31,

     

    December 31,

     

    2019

     

    2018

     

    2019

     

    2018

     

    (In millions, except per-share amounts)

    Revenue:

     

     

     

     

     

     

     

    Premium revenue

    $

    4,123

     

     

    $

    4,438

     

     

    $

    16,208

     

     

    $

    17,612

     

    Premium tax revenue

    122

     

     

    97

     

     

    489

     

     

    417

     

    Health insurer fees reimbursed

     

     

    81

     

     

     

     

    329

     

    Service revenue

     

     

    16

     

     

     

     

    407

     

    Investment income and other revenue

    29

     

     

    32

     

     

    132

     

     

    125

     

    Total revenue

    4,274

     

     

    4,664

     

     

    16,829

     

     

    18,890

     

    Operating expenses:

     

     

     

     

     

     

     

    Medical care costs

    3,545

     

     

    3,775

     

     

    13,905

     

     

    15,137

     

    General and administrative expenses

    343

     

     

    335

     

     

    1,296

     

     

    1,333

     

    Premium tax expenses

    122

     

     

    97

     

     

    489

     

     

    417

     

    Health insurer fees

     

     

    87

     

     

     

     

    348

     

    Depreciation and amortization

    21

     

     

    23

     

     

    89

     

     

    99

     

    Restructuring costs

    1

     

     

    8

     

     

    6

     

     

    46

     

    Cost of service revenue

     

     

    15

     

     

     

     

    364

     

    Total operating expenses

    4,032

     

     

    4,340

     

     

    15,785

     

     

    17,744

     

    Loss on sales of subsidiaries, net of gain

     

     

    (52

    )

     

     

     

    (15

    )

    Operating income

    242

     

     

    272

     

     

    1,044

     

     

    1,131

     

    Other expenses, net:

     

     

     

     

     

     

     

    Interest expense

    20

     

     

    24

     

     

    87

     

     

    115

     

    Other (income) expenses, net

     

     

    (8

    )

     

    (15

    )

     

    17

     

    Total other expenses, net

    20

     

     

    16

     

     

    72

     

     

    132

     

    Income before income tax expense

    222

     

     

    256

     

     

    972

     

     

    999

     

    Income tax expense

    54

     

     

    55

     

     

    235

     

     

    292

     

    Net income

    $

    168

     

     

    $

    201

     

     

    $

    737

     

     

    $

    707

     

     

     

     

     

     

     

     

     

    Net income per share, diluted

    $

    2.67

     

     

    $

    3.01

     

     

    $

    11.47

     

     

    $

    10.61

     

     

     

     

     

     

     

     

     

    Diluted weighted average shares outstanding

    63.0

     

     

    66.6

     

     

    64.2

     

     

    66.6

     

     

     

     

     

     

     

     

     

    Operating Statistics:

     

     

     

     

     

     

     

    Medical care ratio

    86.0

    %

     

    85.1

    %

     

    85.8

    %

     

    85.9

    %

    G&A ratio

    8.0

    %

     

    7.2

    %

     

    7.7

    %

     

    7.1

    %

    Premium tax ratio

    2.9

    %

     

    2.2

    %

     

    2.9

    %

     

    2.3

    %

    Effective income tax rate

    24.3

    %

     

    21.4

    %

     

    24.2

    %

     

    29.2

    %

    After-tax margin

    3.9

    %

     

    4.3

    %

     

    4.4

    %

     

    3.7

    %

    Medicaid

    3.6

    %

     

    3.6

    %

     

    3.2

    %

     

    2.4

    %

    Medicare

    5.5

    %

     

    8.0

    %

     

    6.7

    %

     

    4.8

    %

    Marketplace

    4.5

    %

     

    15.4

    %

     

    10.3

    %

     

    16.4

    %

     

    CONSOLIDATED BALANCE SHEETS

     

    December 31,

     

    2019

     

    2018

     

    Unaudited

     

     

     

    (Dollars in millions,
    except per-share
    amounts)

    ASSETS

    Current assets:

     

     

     

    Cash and cash equivalents

    $

    2,452

     

     

    $

    2,826

     

    Investments

    1,946

     

     

    1,681

     

    Receivables

    1,406

     

     

    1,330

     

    Prepaid expenses and other current assets

    134

     

     

    149

     

    Derivative asset

    29

     

     

    476

     

    Total current assets

    5,967

     

     

    6,462

     

    Property, equipment, and capitalized software, net

    385

     

     

    241

     

    Goodwill and intangible assets, net

    172

     

     

    190

     

    Restricted investments

    79

     

     

    120

     

    Deferred income taxes

    79

     

     

    117

     

    Other assets

    105

     

     

    24

     

    Total assets

    $

    6,787

     

     

    $

    7,154

     

     

     

     

     

    LIABILITIES AND STOCKHOLDERS’ EQUITY

    Current liabilities:

     

     

     

    Medical claims and benefits payable

    $

    1,854

     

     

    $

    1,961

     

    Amounts due government agencies

    664

     

     

    967

     

    Accounts payable and accrued liabilities

    455

     

     

    390

     

    Deferred revenue

    249

     

     

    211

     

    Current portion of long-term debt

    18

     

     

    241

     

    Derivative liability

    29

     

     

    476

     

    Total current liabilities

    3,269

     

     

    4,246

     

    Long-term debt

    1,237

     

     

    1,020

     

    Finance lease liabilities

    231

     

     

    197

     

    Other long-term liabilities

    90

     

     

    44

     

    Total liabilities

    4,827

     

     

    5,507

     

    Stockholders’ equity:

     

     

     

    Common stock, $0.001 par value, 150 million shares authorized; outstanding: 62 million shares at each of December 31, 2019, and December 31, 2018

     

     

     

    Preferred stock, $0.001 par value; 20 million shares authorized, no shares issued and outstanding

     

     

     

    Additional paid-in capital

    175

     

     

    643

     

    Accumulated other comprehensive income (loss)

    4

     

     

    (8

    )

    Retained earnings

    1,781

     

     

    1,012

     

    Total stockholders’ equity

    1,960

     

     

    1,647

     

    Total liabilities and stockholders' equity

    $

    6,787

     

     

    $

    7,154

     

     

    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

     

     

    Year Ended

     

    December 31,

     

    2019

     

    2018

     

    (In millions)

    Operating activities:

     

     

     

    Net income

    $

    737

     

     

    $

    707

     

    Adjustments to reconcile net income to net cash provided by (used in) operating activities:

     

     

     

    Depreciation and amortization

    89

     

     

    127

     

    Deferred income taxes

    10

     

     

    (6

    )

    Share-based compensation

    39

     

     

    27

     

    Amortization of convertible senior notes and finance lease liabilities

    5

     

     

    22

     

    (Gain) loss on debt repayment

    (15

    )

     

    22

     

    Loss on sales of subsidiaries, net of gain

     

     

    15

     

    Non-cash restructuring costs

     

     

    17

     

    Other, net

    (5

    )

     

    4

     

    Changes in operating assets and liabilities:

     

     

     

    Receivables

    (76

    )

     

    (530

    )

    Prepaid expenses and other current assets

    28

     

     

    6

     

    Medical claims and benefits payable

    (107

    )

     

    (226

    )

    Amounts due government agencies

    (303

    )

     

    (574

    )

    Accounts payable and accrued liabilities

    2

     

     

    45

     

    Deferred revenue

    38

     

     

    (21

    )

    Income taxes

    (15

    )

     

    51

     

    Net cash provided by (used in) operating activities

    427

     

     

    (314

    )

    Investing activities:

     

     

     

    Purchases of investments

    (2,536

    )

     

    (1,444

    )

    Proceeds from sales and maturities of investments

    2,302

     

     

    2,445

     

    Purchases of property, equipment, and capitalized software

    (57

    )

     

    (30

    )

    Net cash received from sales of subsidiaries

     

     

    190

     

    Other, net

    (2

    )

     

    (18

    )

    Net cash (used in) provided by investing activities

    (293

    )

     

    1,143

     

    Financing activities:

     

     

     

    Repayment of principal amount of convertible senior notes

    (240

    )

     

    (362

    )

    Cash paid for partial settlement of conversion option

    (578

    )

     

    (623

    )

    Cash received for partial settlement of call option

    578

     

     

    623

     

    Cash paid for partial termination of warrants

    (514

    )

     

    (549

    )

    Proceeds from borrowings under term loan facility

    220

     

     

     

    Common stock purchases

    (47

    )

     

     

    Repayment of credit facility

     

     

    (300

    )

    Other, net

    29

     

     

    18

     

    Net cash used in financing activities

    (552

    )

     

    (1,193

    )

    Net decrease in cash, cash equivalents, and restricted cash and cash equivalents

    (418

    )

     

    (364

    )

    Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period

    2,926

     

     

    3,290

     

    Cash, cash equivalents, and restricted cash and cash equivalents at end of period

    $

    2,508

    $

    2,926

     

     

    HEALTH PLANS SEGMENT MEMBERSHIP

     

     

    As of December 31,

     

    2019

     

    2018

    Ending Membership by Government Program:

     

     

     

    Medicaid

    2,956,000

     

     

    3,361,000

     

    Medicare

    101,000

     

     

    98,000

     

    Marketplace

    274,000

     

     

    362,000

     

     

    3,331,000

     

     

    3,821,000

     

     

     

     

     

    Ending Membership by Health Plan:

     

     

     

    California

    565,000

     

     

    608,000

     

    Florida (1)

    132,000

     

     

    313,000

     

    Illinois

    224,000

     

     

    224,000

     

    Michigan

    362,000

     

     

    383,000

     

    New Mexico (1)

    23,000

     

     

    222,000

     

    Ohio

    288,000

     

     

    302,000

     

    Puerto Rico

    176,000

     

     

    252,000

     

    South Carolina

    131,000

     

     

    120,000

     

    Texas

    341,000

     

     

    423,000

     

    Washington

    832,000

     

     

    781,000

     

    Other (2)

    257,000

     

     

    193,000

     

     

    3,331,000

     

     

    3,821,000

     

    __________________

    (1) The Company’s Medicaid contracts in New Mexico and in all but two regions in Florida terminated in late 2018 and early 2019. The Company continues to serve Medicare and Marketplace members in both Florida and New Mexico, as well as Medicaid members in two regions in Florida.

    (2) “Other” includes the Idaho, Mississippi, New York, Utah and Wisconsin health plans, which are not individually significant to the Company’s consolidated operating results.

     

    HEALTH PLANS SEGMENT FINANCIAL DATA — BY GOVERNMENT PROGRAM

    (In millions, except percentages)

     

     

    Three Months Ended December 31,

     

    2019

     

    2018

     

    Premium
    Revenue

     

    Medical
    Care Costs

     

    MCR (1)

     

    Premium
    Revenue

     

    Medical
    Care Costs

     

    MCR (1)

     

     

     

     

     

     

    Medicaid

    $

    3,227

     

     

    $

    2,818

     

     

    87.3

    %

     

    $

    3,430

     

     

    $

    3,046

     

     

    88.8

    %

    Medicare

    561

     

     

    480

     

     

    85.5

     

     

    527

     

     

    426

     

     

    80.8

     

    Marketplace

    335

     

     

    247

     

     

    73.5

     

     

    481

     

     

    303

     

     

    62.9

     

     

    $

    4,123

     

     

    $

    3,545

     

     

    86.0

    %

     

    $

    4,438

     

     

    $

    3,775

     

     

    85.1

    %

     
     

     

    Year Ended December 31,

     

    2019

     

    2018

     

    Premium
    Revenue

     

    Medical
    Care Costs

     

    MCR

     

    Premium
    Revenue

     

    Medical
    Care Costs

     

    MCR

     

     

     

     

     

     

    Medicaid

    $

    12,466

     

     

    $

    10,969

     

     

    88.0

    %

     

    $

    13,623

     

     

    $

    12,258

     

     

    90.0

    %

    Medicare

    2,243

     

     

    1,913

     

     

    85.3

     

     

    2,074

     

     

    1,752

     

     

    84.5

     

    Marketplace

    1,499

     

     

    1,023

     

     

    68.2

     

     

    1,915

     

     

    1,127

     

     

    58.9

     

     

    $

    16,208

     

     

    $

    13,905

     

     

    85.8

    %

     

    $

    17,612

     

     

    $

    15,137

     

     

    85.9

    %

    __________________

    (1) The MCR represents medical costs as a percentage of premium revenue.

    CHANGE IN MEDICAL CLAIMS AND BENEFITS PAYABLE
    (Dollars in millions)

    The Company’s claims liability includes a provision for adverse claims deviation based on historical experience and other factors including, but not limited to, variations in claims payment patterns, changes in utilization and cost trends, known outbreaks of disease, and large claims. The Company’s reserving methodology is consistently applied across all periods presented. The amounts displayed for “Components of medical care costs related to: Prior period” represent the amount by which the original estimate of claims and benefits payable at the beginning of the period was more than the actual amount of the liability based on information (principally the payment of claims) developed since that liability was first reported. The following table presents the components of the change in medical claims and benefits payable for the periods indicated:

     

     

    Year Ended December 31,

     

    2019

     

    2018

    Medical claims and benefits payable, beginning balance

    $

    1,961

     

     

    $

    2,192

     

    Components of medical care costs related to:

     

     

     

    Current period

    14,176

     

     

    15,478

     

    Prior period (1)

    (271

    )

     

    (341

    )

    Total medical care costs

    13,905

     

     

    15,137

     

    Change in non-risk and other provider payables

    24

     

     

    13

     

    Payments for medical care costs related to:

     

     

     

    Current period

    12,554

     

     

    13,671

     

    Prior period

    1,482

     

     

    1,710

     

    Total paid

    14,036

     

     

    15,381

     

    Medical claims and benefits payable, ending balance

    $

    1,854

     

     

    $

    1,961

     

     

     

     

     

    Days in claims payable, fee for service (2)

    50

     

     

    53

     

    ______________________

    (1) The December 31, 2018, amounts include the 2018 benefit of the 2017 Marketplace CSR reimbursement of $81 million.

    (2) Claims payable includes primarily IBNP. It also includes certain fee-for-service payables reported in “Other” medical claims and benefits payable amounting to $50 million and $43 million, as of December 31, 2019 and 2018, respectively.

    UNAUDITED NON-GAAP FINANCIAL MEASURES

    The Company uses non-generally accepted accounting principles, or non-GAAP, financial measures as supplemental metrics in evaluating the Company’s financial performance, making financing and business decisions, and forecasting and planning for future periods. For these reasons, management believes such measures are useful supplemental measures to investors in comparing the Company’s performance to the performance of other public companies in the health care industry. These non-GAAP financial measures should be considered as supplements to, and not as substitutes for or superior to, GAAP measures. See further information regarding non-GAAP measures below the tables.

     

     

    Three Months Ended

     

    Year Ended

     

    December 31,

     

    December 31,

     

    2019

     

    2018

     

    2019

     

    2018

     

    (In millions)

    Net income

    $

    168

     

     

    $

    201

     

     

    $

    737

     

     

    $

    707

     

    Adjustments:

     

     

     

     

     

     

     

    Depreciation, and amortization of intangible assets and capitalized software

    21

     

     

    23

     

     

    89

     

     

    118

     

    Interest expense

    20

     

     

    24

     

     

    87

     

     

    115

     

    Income tax expense

    54

     

     

    55

     

     

    235

     

     

    292

     

    EBITDA

    $

    263

     

     

    $

    303

     

     

    $

    1,148

     

     

    $

    1,232

     

     

    Adjustments made to GAAP measures used to calculate the non-GAAP measures used in this news release follow:

    Earnings before interest, taxes, depreciation and amortization (“EBITDA”): Net income on a GAAP basis less depreciation, and amortization of intangible assets and capitalized software, interest expense and income tax expense. The Company believes that EBITDA is helpful in assessing the Company’s ability to meet the cash demands of its operating units.

     

    UNAUDITED NON-GAAP FINANCIAL MEASURES CONTINUED

     

     

    Three Months Ended December 31,

     

    Year Ended December 31,

    2019

     

    2018

     

    2019

     

    2018

     

     

     

    Amount

     

    Per
    Diluted
    Share

     

    Amount

     

    Per
    Diluted
    Share

     

    Amount

     

    Per
    Diluted
    Share

     

    Amount

     

    Per
    Diluted
    Share

     

    (In millions, except per diluted share amounts)

    Net income

    $

    168

     

     

    $

    2.67

     

     

    $

    201

     

     

    $

    3.01

     

     

    $

    737

     

     

    $

    11.47

     

     

    $

    707

     

     

    $

    10.61

     

    Adjustments:

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Amortization of intangible assets

    4

     

     

    0.06

     

     

    6

     

     

    0.08

     

     

    17

     

     

    0.27

     

     

    22

     

     

    0.32

     

    (Gain) loss on debt repayment

     

     

     

     

    (3

    )

     

    (0.05

    )

     

    (15

    )

     

    (0.24

    )

     

    22

     

     

    0.33

     

    Restructuring costs

    1

     

     

    0.02

     

     

    8

     

     

    0.12

     

     

    6

     

     

    0.10

     

     

    46

     

     

    0.68

     

    Loss on sales of subsidiaries, net of gain

     

     

     

     

    52

     

     

    0.78

     

     

     

     

     

     

    15

     

     

    0.23

     

    Subtotal, adjustments

    5

     

     

    0.08

     

     

    63

     

     

    0.93

     

     

    8

     

     

    0.13

     

     

    105

     

     

    1.56

     

    Income tax effect (1)

    (1

    )

     

    (0.02

    )

     

    (23

    )

     

    (0.34

    )

     

    (2

    )

     

    (0.03

    )

     

    (30

    )

     

    (0.43

    )

    Adjustments, net of tax effect

    4

     

     

    0.06

     

     

    40

     

     

    0.59

     

     

    6

     

     

    0.10

     

     

    75

     

     

    1.13

     

    Adjusted net income

    $

    172

     

     

    $

    2.73

     

     

    $

    241

     

     

    $

    3.60

     

     

    $

    743

     

     

    $

    11.57

     

     

    $

    782

     

     

    $

    11.74

     

    ________________________

    (1) Income tax effect of adjustments calculated at the blended federal and state statutory tax rate of 22.6% and 22% for 2019 and 2018, respectively.

    Adjustments made to GAAP measures used to calculate the non-GAAP measures used in this news release follow:

    Adjusted net income: Net income on a GAAP basis less amortization of intangible assets, gain or loss on debt repayment, restructuring costs, loss on sales of subsidiaries, and the aggregate income tax effect calculated at the statutory tax rate. The Company believes that adjusted net income is helpful in assessing the Company’s financial performance exclusive of the non-cash impact of the amortization of purchased intangibles and the impact of certain expenses and other items that management believes are not indicative of longer-term business trends and operations.

    Adjusted net income per diluted share: Adjusted net income divided by weighted average common shares outstanding on a fully diluted basis.

    Beginning in the first quarter of 2020, the Company will no longer publish the tables that follow in its earnings announcements, through the last page of this news release.

     

    HEALTH PLANS SEGMENT MEMBERSHIP

     

     

    As of December 31,

     

    2019

     

    2018

    Ending Membership by Government Program:

     

     

     

    TANF and CHIP

    1,987,000

     

     

    2,295,000

     

    Medicaid Expansion

    605,000

     

     

    660,000

     

    ABD

    364,000

     

     

    406,000

     

    Total Medicaid

    2,956,000

     

     

    3,361,000

     

    MMP - Integrated

    58,000

     

     

    54,000

     

    Medicare Special Needs Plans

    43,000

     

     

    44,000

     

    Total Medicare

    101,000

     

     

    98,000

     

    Total Medicaid and Medicare

    3,057,000

     

     

    3,459,000

     

    Marketplace

    274,000

     

     

    362,000

     

     

    3,331,000

     

     

    3,821,000

     

     
     

    UNAUDITED SELECTED FINANCIAL DATA

    (In millions, except percentages and per-member per-month amounts)

    HEALTH PLANS SEGMENT FINANCIAL DATA — BY GOVERNMENT PROGRAM

     

     

    Member
    Months (1)

     

    Premium Revenue

     

    Medical Care Costs

     

    MCR (2)

     

    Medical
    Margin

     

     

    Total

     

    PMPM

     

    Total

     

    PMPM

     

     

     

    Three Months Ended December 31, 2019

    TANF and CHIP

    6.1

     

     

    $

    1,244

     

     

    $

    206.74

     

     

    $

    1,117

     

     

    $

    185.79

     

     

    89.9

    %

     

    $

    127

     

    Medicaid Expansion

    1.8

     

     

    720

     

     

    395.37

     

     

    608

     

     

    333.59

     

     

    84.4

     

     

    112

     

    ABD

    1.1

     

     

    1,263

     

     

    1,150.24

     

     

    1,093

     

     

    995.29

     

     

    86.5

     

     

    170

     

    Total Medicaid

    9.0

     

     

    3,227

     

     

    361.16

     

     

    2,818

     

     

    315.41

     

     

    87.3

     

     

    409

     

    MMP

    0.2

     

     

    396

     

     

    2,284.37

     

     

    343

     

     

    1,981.07

     

     

    86.7

     

     

    53

     

    Medicare

    0.1

     

     

    165

     

     

    1,264.10

     

     

    137

     

     

    1,044.28

     

     

    82.6

     

     

    28

     

    Total Medicare

    0.3

     

     

    561

     

     

    1,846.15

     

     

    480

     

     

    1,578.71

     

     

    85.5

     

     

    81

     

    Total Medicaid and Medicare

    9.3

     

     

    3,788

     

     

    409.99

     

     

    3,298

     

     

    356.95

     

     

    87.1

     

     

    490

     

    Marketplace

    0.8

     

     

    335

     

     

    404.18

     

     

    247

     

     

    297.17

     

     

    73.5

     

     

    88

     

     

    10.1

     

     

    $

    4,123

     

     

    $

    409.51

     

     

    $

    3,545

     

     

    $

    352.03

     

     

    86.0

    %

     

    $

    578

     

     

     

    Three Months Ended December 31, 2018

    TANF and CHIP

    7.1

     

     

    $

    1,363

     

     

    $

    189.86

     

     

    $

    1,203

     

     

    $

    167.61

     

     

    88.3

    %

     

    $

    160

     

    Medicaid Expansion

    2.0

     

     

    700

     

     

    349.05

     

     

    630

     

     

    314.34

     

     

    90.1

     

     

    70

     

    ABD

    1.3

     

     

    1,367

     

     

    1,094.14

     

     

    1,213

     

     

    970.49

     

     

    88.7

     

     

    154

     

    Total Medicaid

    10.4

     

     

    3,430

     

     

    328.79

     

     

    3,046

     

     

    292.00

     

     

    88.8

     

     

    384

     

    MMP

    0.2

     

     

    366

     

     

    2,263.41

     

     

    300

     

     

    1,855.34

     

     

    82.0

     

     

    66

     

    Medicare

    0.1

     

     

    161

     

     

    1,206.96

     

     

    126

     

     

    944.65

     

     

    78.3

     

     

    35

     

    Total Medicare

    0.3

     

     

    527

     

     

    1,784.58

     

     

    426

     

     

    1,442.57

     

     

    80.8

     

     

    101

     

    Total Medicaid and Medicare

    10.7

     

     

    3,957

     

     

    368.93

     

     

    3,472

     

     

    323.72

     

     

    87.7

     

     

    485

     

    Marketplace

    1.1

     

     

    481

     

     

    437.79

     

     

    303

     

     

    275.56

     

     

    62.9

     

     

    178

     

     

    11.8

     

     

    $

    4,438

     

     

    $

    375.33

     

     

    $

    3,775

     

     

    $

    319.24

     

     

    85.1

    %

     

    $

    663

     

     

     

    Year Ended December 31, 2019

    TANF and CHIP

    24.4

     

     

    $

    4,838

     

     

    $

    198.66

     

     

    $

    4,258

     

     

    $

    174.88

     

     

    88.0

    %

     

    $

    580

     

    Medicaid Expansion

    7.2

     

     

    2,775

     

     

    383.93

     

     

    2,418

     

     

    334.53

     

     

    87.1

     

     

    357

     

    ABD

    4.4

     

     

    4,853

     

     

    1,111.09

     

     

    4,293

     

     

    982.83

     

     

    88.5

     

     

    560

     

    Total Medicaid

    36.0

     

     

    12,466

     

     

    346.79

     

     

    10,969

     

     

    305.16

     

     

    88.0

     

     

    1,497

     

    MMP

    0.7

     

     

    1,589

     

     

    2,346.87

     

     

    1,377

     

     

    2,033.77

     

     

    86.7

     

     

    212

     

    Medicare

    0.5

     

     

    654

     

     

    1,268.74

     

     

    536

     

     

    1,039.02

     

     

    81.9

     

     

    118

     

    Total Medicare

    1.2

     

     

    2,243

     

     

    1,880.79

     

     

    1,913

     

     

    1,603.73

     

     

    85.3

     

     

    330

     

    Total Medicaid and Medicare

    37.2

     

     

    14,709

     

     

    396.05

     

     

    12,882

     

     

    346.87

     

     

    87.6

     

     

    1,827

     

    Marketplace

    3.6

     

     

    1,499

     

     

    411.89

     

     

    1,023

     

     

    281.04

     

     

    68.2

     

     

    476

     

     

    40.8

     

     

    $

    16,208

     

     

    $

    397.47

     

     

    $

    13,905

     

     

    $

    340.99

     

     

    85.8

    %

     

    $

    2,303

     

     

     

    Year Ended December 31, 2018

    TANF and CHIP

    29.4

     

     

    $

    5,508

     

     

    $

    187.04

     

     

    $

    4,908

     

     

    $

    166.66

     

     

    89.1

    %

     

    $

    600

     

    Medicaid Expansion

    8.1

     

     

    2,884

     

     

    356.81

     

     

    2,587

     

     

    320.11

     

     

    89.7

     

     

    297

     

    ABD

    5.0

     

     

    5,231

     

     

    1,049.26

     

     

    4,763

     

     

    955.22

     

     

    91.0

     

     

    468

     

    Total Medicaid

    42.5

     

     

    13,623

     

     

    320.43

     

     

    12,258

     

     

    288.31

     

     

    90.0

     

     

    1,365

     

    MMP

    0.7

     

     

    1,443

     

     

    2,192.58

     

     

    1,241

     

     

    1,885.59

     

     

    86.0

     

     

    202

     

    Medicare

    0.5

     

     

    631

     

     

    1,180.46

     

     

    511

     

     

    955.81

     

     

    81.0

     

     

    120

     

    Total Medicare

    1.2

     

     

    2,074

     

     

    1,738.85

     

     

    1,752

     

     

    1,468.77

     

     

    84.5

     

     

    322

     

    Total Medicaid and Medicare

    43.7

     

     

    15,697

     

     

    359.14

     

     

    14,010

     

     

    320.53

     

     

    89.2

     

     

    1,687

     

    Marketplace

    4.9

     

     

    1,915

     

     

    392.97

     

     

    1,127

     

     

    231.33

     

     

    58.9

     

     

    788

     

     

    48.6

     

     

    $

    17,612

     

     

    $

    362.54

     

     

    $

    15,137

     

     

    $

    311.59

     

     

    85.9

    %

     

    $

    2,475

     

    __________________

    (1) A member month is defined as the aggregate of each month’s ending membership for the period presented.

    (2) The MCR represents medical costs as a percentage of premium revenue.

     

    HEALTH PLANS SEGMENT FINANCIAL DATA — MEDICAID AND MEDICARE

     

     

    Member
    Months

     

    Premium Revenue

     

    Medical Care Costs

     

    MCR

     

    Medical
    Margin

     

     

    Total

     

    PMPM

     

    Total

     

    PMPM

     

     

     

    Three Months Ended December 31, 2019

    California

    1.5

     

     

    $

    531

     

     

    $

    334.81

     

     

    $

    414

     

     

    $

    261.66

     

     

    78.2

    %

     

    $

    117

     

    Florida

    0.3

     

     

    125

     

     

    426.72

     

     

    109

     

     

    371.79

     

     

    87.1

     

     

    16

     

    Illinois

    0.7

     

     

    276

     

     

    412.06

     

     

    240

     

     

    357.32

     

     

    86.7

     

     

    36

     

    Michigan

    1.0

     

     

    390

     

     

    362.57

     

     

    321

     

     

    298.90

     

     

    82.4

     

     

    69

     

    Ohio

    0.9

     

     

    615

     

     

    691.25

     

     

    562

     

     

    631.53

     

     

    91.4

     

     

    53

     

    Puerto Rico

    0.5

     

     

    133

     

     

    254.48

     

     

    119

     

     

    229.44

     

     

    90.2

     

     

    14

     

    South Carolina

    0.4

     

     

    156

     

     

    394.94

     

     

    133

     

     

    334.33

     

     

    84.7

     

     

    23

     

    Texas

    0.6

     

     

    613

     

     

    952.36

     

     

    561

     

     

    870.16

     

     

    91.4

     

     

    52

     

    Washington

    2.5

     

     

    645

     

     

    266.70

     

     

    569

     

     

    235.58

     

     

    88.3

     

     

    76

     

    Other (1) (2)

    0.9

     

     

    304

     

     

    406.59

     

     

    270

     

     

    360.51

     

     

    88.7

     

     

    34

     

     

    9.3

     

     

    $

    3,788

     

     

    $

    409.99

     

     

    $

    3,298

     

     

    $

    356.95

     

     

    87.1

    %

     

    $

    490

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Three Months Ended December 31, 2018

    California

    1.8

     

     

    $

    485

     

     

    $

    282.83

     

     

    $

    425

     

     

    $

    247.56

     

     

    87.5

    %

     

    $

    60

     

    Florida

    1.0

     

     

    370

     

     

    376.80

     

     

    345

     

     

    351.20

     

     

    93.2

     

     

    25

     

    Illinois

    0.7

     

     

    242

     

     

    361.29

     

     

    196

     

     

    291.63

     

     

    80.7

     

     

    46

     

    Michigan

    1.1

     

     

    389

     

     

    348.47

     

     

    320

     

     

    287.33

     

     

    82.5

     

     

    69

     

    New Mexico (2)

    0.6

     

     

    305

     

     

    489.86

     

     

    265

     

     

    425.85

     

     

    86.9

     

     

    40

     

    Ohio

    0.9

     

     

    607

     

     

    662.51

     

     

    527

     

     

    575.69

     

     

    86.9

     

     

    80

     

    Puerto Rico

    0.8

     

     

    147

     

     

    173.81

     

     

    135

     

     

    158.97

     

     

    91.5

     

     

    12

     

    South Carolina

    0.3

     

     

    126

     

     

    352.67

     

     

    106

     

     

    299.17

     

     

    84.8

     

     

    20

     

    Texas

    0.6

     

     

    581

     

     

    865.75

     

     

    538

     

     

    801.34

     

     

    92.6

     

     

    43

     

    Washington

    2.3

     

     

    512

     

     

    225.52

     

     

    455

     

     

    200.72

     

     

    89.0

     

     

    57

     

    Other (1)

    0.6

     

     

    193

     

     

    344.31

     

     

    160

     

     

    283.96

     

     

    82.5

     

     

    33

     

     

    10.7

     

     

    $

    3,957

     

     

    $

    368.93

     

     

    $

    3,472

     

     

    $

    323.72

     

     

    87.7

    %

     

    $

    485

     

     

     

    Year Ended December 31, 2019

    California

    6.4

     

     

    $

    2,039

     

     

    $

    313.75

     

     

    $

    1,700

     

     

    $

    261.74

     

     

    83.4

    %

     

    $

    339

     

    Florida

    1.3

     

     

    543

     

     

    414.29

     

     

    483

     

     

    368.81

     

     

    89.0

     

     

    60

     

    Illinois

    2.7

     

     

    1,002

     

     

    377.13

     

     

    872

     

     

    328.11

     

     

    87.0

     

     

    130

     

    Michigan

    4.3

     

     

    1,589

     

     

    368.73

     

     

    1,311

     

     

    304.22

     

     

    82.5

     

     

    278

     

    Ohio

    3.6

     

     

    2,450

     

     

    684.74

     

     

    2,215

     

     

    619.03

     

     

    90.4

     

     

    235

     

    Puerto Rico

    2.3

     

     

    474

     

     

    204.88

     

     

    420

     

     

    181.85

     

     

    88.8

     

     

    54

     

    South Carolina

    1.6

     

     

    583

     

     

    375.13

     

     

    511

     

     

    328.58

     

     

    87.6

     

     

    72

     

    Texas

    2.6

     

     

    2,402

     

     

    920.94

     

     

    2,184

     

     

    837.05

     

     

    90.9

     

     

    218

     

    Washington

    9.6

     

     

    2,513

     

     

    263.13

     

     

    2,260

     

     

    236.63

     

     

    89.9

     

     

    253

     

    Other (1) (2)

    2.8

     

     

    1,114

     

     

    403.47

     

     

    926

     

     

    335.31

     

     

    83.1

     

     

    188

     

     

    37.2

     

     

    $

    14,709

     

     

    $

    396.05

     

     

    $

    12,882

     

     

    $

    346.87

     

     

    87.6

    %

     

    $

    1,827

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Year Ended December 31, 2018

    California

    7.1

     

     

    $

    1,931

     

     

    $

    273.59

     

     

    $

    1,724

     

     

    $

    244.21

     

     

    89.3

    %

     

    $

    207

     

    Florida

    4.2

     

     

    1,517

     

     

    360.98

     

     

    1,414

     

     

    336.43

     

     

    93.2

     

     

    103

     

    Illinois

    2.5

     

     

    793

     

     

    322.87

     

     

    670

     

     

    272.61

     

     

    84.4

     

     

    123

     

    Michigan

    4.5

     

     

    1,550

     

     

    344.42

     

     

    1,303

     

     

    289.53

     

     

    84.1

     

     

    247

     

    New Mexico (2)

    2.6

     

     

    1,241

     

     

    474.10

     

     

    1,140

     

     

    435.65

     

     

    91.9

     

     

    101

     

    Ohio

    3.7

     

     

    2,277

     

     

    608.29

     

     

    2,001

     

     

    534.59

     

     

    87.9

     

     

    276

     

    Puerto Rico

    3.7

     

     

    696

     

     

    186.59

     

     

    636

     

     

    170.45

     

     

    91.4

     

     

    60

     

    South Carolina

    1.4

     

     

    495

     

     

    351.38

     

     

    429

     

     

    304.85

     

     

    86.8

     

     

    66

     

    Texas

    2.7

     

     

    2,296

     

     

    839.70

     

     

    2,092

     

     

    765.12

     

     

    91.1

     

     

    204

     

    Washington

    9.1

     

     

    2,178

     

     

    240.42

     

     

    1,999

     

     

    220.72

     

     

    91.8

     

     

    179

     

    Other (1)

    2.2

     

     

    723

     

     

    329.06

     

     

    602

     

     

    273.55

     

     

    83.1

     

     

    121

     

     

    43.7

     

     

    $

    15,697

     

     

    $

    359.14

     

     

    $

    14,010

     

     

    $

    320.53

     

     

    89.2

    %

     

    $

    1,687

     

    _______________

    (1) “Other” includes the Idaho, Mississippi, New York, Utah and Wisconsin health plans, which are not individually significant to the Company’s consolidated operating results.

    (2) In 2019, “Other” includes the New Mexico health plan. The New Mexico health plan’s Medicaid contract terminated on December 31, 2018, and therefore its 2019 results are not individually significant to the Company’s consolidated operating results.

     

    HEALTH PLANS SEGMENT FINANCIAL DATA — MARKETPLACE

     

     

    Member
    Months

     

    Premium Revenue

     

    Medical Care Costs

     

    MCR

     

    Medical
    Margin

     

     

    Total

     

    PMPM

     

    Total

     

    PMPM

     

     

     

    Three Months Ended December 31, 2019

    California

    0.2

     

     

    $

    53

     

     

    $

    365.16

     

     

    $

    36

     

     

    $

    241.93

     

     

    66.3

    %

     

    $

    17

     

    Florida

    0.1

     

     

    39

     

     

    357.79

     

     

    26

     

     

    239.09

     

     

    66.8

     

     

    13

     

    Michigan

    0.1

     

     

    8

     

     

    497.43

     

     

    5

     

     

    302.84

     

     

    60.9

     

     

    3

     

    Ohio

     

     

    24

     

     

    803.58

     

     

    18

     

     

    599.84

     

     

    74.6

     

     

    6

     

    Texas

    0.4

     

     

    132

     

     

    337.02

     

     

    99

     

     

    253.66

     

     

    75.3

     

     

    33

     

    Washington

     

     

    39

     

     

    684.31

     

     

    33

     

     

    563.25

     

     

    82.3

     

     

    6

     

    Other (1)

     

     

    40

     

     

    492.23

     

     

    30

     

     

    379.25

     

     

    77.0

     

     

    10

     

     

    0.8

     

     

    $

    335

     

     

    $

    404.18

     

     

    $

    247

     

     

    $

    297.17

     

     

    73.5

    %

     

    $

    88

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Three Months Ended December 31, 2018

    California

     

     

    $

    48

     

     

    $

    322.39

     

     

    $

    36

     

     

    $

    248.84

     

     

    77.2

    %

     

    $

    12

     

    Florida

    0.1

     

     

    62

     

     

    526.44

     

     

    32

     

     

    278.60

     

     

    52.9

     

     

    30

     

    Michigan

    0.1

     

     

    11

     

     

    259.20

     

     

    8

     

     

    166.54

     

     

    64.3

     

     

    3

     

    New Mexico

    0.1

     

     

    22

     

     

    328.32

     

     

    19

     

     

    302.79

     

     

    92.2

     

     

    3

     

    Ohio

    0.1

     

     

    27

     

     

    512.33

     

     

    20

     

     

    366.62

     

     

    71.6

     

     

    7

     

    Texas

    0.7

     

     

    269

     

     

    440.81

     

     

    153

     

     

    250.66

     

     

    56.9

     

     

    116

     

    Washington

     

     

    44

     

     

    697.31

     

     

    35

     

     

    536.80

     

     

    77.0

     

     

    9

     

    Other (2)

     

     

    (2

    )

     

    NM

     

     

     

    NM

     

    NM

     

    (2

    )

     

    1.1

     

     

    $

    481

     

     

    $

    437.79

     

     

    $

    303

     

     

    $

    275.56

     

     

    62.9

    %

     

    $

    178

     

     

     

    Year Ended December 31, 2019

    California

    0.7

     

     

    $

    227

     

     

    $

    364.82

     

     

    $

    137

     

     

    $

    218.06

     

     

    59.8

    %

     

    $

    90

     

    Florida

    0.5

     

     

    191

     

     

    382.52

     

     

    107

     

     

    214.19

     

     

    56.0

     

     

    84

     

    Michigan

    0.1

     

     

    35

     

     

    479.12

     

     

    20

     

     

    273.87

     

     

    57.2

     

     

    15

     

    Ohio

    0.1

     

     

    103

     

     

    802.29

     

     

    71

     

     

    556.15

     

     

    69.3

     

     

    32

     

    Texas

    1.7

     

     

    589

     

     

    342.57

     

     

    430

     

     

    250.40

     

     

    73.1

     

     

    159

     

    Washington

    0.2

     

     

    182

     

     

    730.31

     

     

    130

     

     

    522.15

     

     

    71.5

     

     

    52

     

    Other (1)

    0.3

     

     

    172

     

     

    494.05

     

     

    128

     

     

    368.08

     

     

    74.5

     

     

    44

     

     

    3.6

     

     

    $

    1,499

     

     

    $

    411.89

     

     

    $

    1,023

     

     

    $

    281.04

     

     

    68.2

    %

     

    $

    476

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Year Ended December 31, 2018

    California

    0.6

     

     

    $

    219

     

     

    $

    325.84

     

     

    $

    125

     

     

    $

    187.37

     

     

    57.5

    %

     

    $

    94

     

    Florida

    0.6

     

     

    273

     

     

    498.66

     

     

    99

     

     

    181.52

     

     

    36.4

     

     

    174

     

    Michigan

    0.2

     

     

    51

     

     

    250.69

     

     

    31

     

     

    150.11

     

     

    59.9

     

     

    20

     

    New Mexico

    0.3

     

     

    115

     

     

    403.55

     

     

    74

     

     

    260.29

     

     

    64.5

     

     

    41

     

    Ohio

    0.3

     

     

    111

     

     

    477.03

     

     

    78

     

     

    334.32

     

     

    70.1

     

     

    33

     

    Texas

    2.7

     

     

    948

     

     

    356.06

     

     

    593

     

     

    222.89

     

     

    62.6

     

     

    355

     

    Washington

    0.2

     

     

    183

     

     

    664.48

     

     

    140

     

     

    506.07

     

     

    76.2

     

     

    43

     

    Other (2)

     

     

    15

     

     

    NM

     

    (13

    )

     

    NM

     

    NM

     

    28

     

     

    4.9

     

     

    $

    1,915

     

     

    $

    392.97

     

     

    $

    1,127

     

     

    $

    231.33

     

     

    58.9

    %

     

    $

    788

     

    __________________

    (1) “Other” includes the New Mexico, Utah and Wisconsin health plans, which are not individually significant to the Company’s consolidated operating results in 2019.

    (2) “Other” includes the Utah and Wisconsin health plans, where the Company did not participate in the Marketplace in 2018. Therefore, the ratios for 2018 periods are not meaningful (NM).

     

    HEALTH PLANS SEGMENT FINANCIAL DATA — TOTAL

     

     

    Member
    Months

     

    Premium Revenue

     

    Medical Care Costs

     

    MCR

     

    Medical
    Margin

     

     

    Total

     

    PMPM

     

    Total

     

    PMPM

     

     

     

    Three Months Ended December 31, 2019

    California

    1.7

     

     

    $

    584

     

     

    $

    337.37

     

     

    $

    450

     

     

    $

    259.99

     

     

    77.1

    %

     

    $

    134

     

    Florida

    0.4

     

     

    164

     

     

    407.98

     

     

    135

     

     

    335.71

     

     

    82.3

     

     

    29

     

    Illinois

    0.7

     

     

    276

     

     

    412.06

     

     

    240

     

     

    357.32

     

     

    86.7

     

     

    36

     

    Michigan

    1.1

     

     

    398

     

     

    364.51

     

     

    326

     

     

    298.95

     

     

    82.0

     

     

    72

     

    Ohio

    0.9

     

     

    639

     

     

    694.87

     

     

    580

     

     

    630.51

     

     

    90.7

     

     

    59

     

    Puerto Rico

    0.5

     

     

    133

     

     

    254.48

     

     

    119

     

     

    229.44

     

     

    90.2

     

     

    14

     

    South Carolina

    0.4

     

     

    156

     

     

    394.94

     

     

    133

     

     

    334.33

     

     

    84.7

     

     

    23

     

    Texas

    1.0

     

     

    745

     

     

    720.66

     

     

    660

     

     

    638.02

     

     

    88.5

     

     

    85

     

    Washington

    2.5

     

     

    684

     

     

    276.64

     

     

    602

     

     

    243.37

     

     

    88.0

     

     

    82

     

    Other (1) (2)

    0.9

     

     

    344

     

     

    414.93

     

     

    300

     

     

    362.34

     

     

    87.3

     

     

    44

     

     

    10.1

     

     

    $

    4,123

     

     

    $

    409.51

     

     

    $

    3,545

     

     

    $

    352.03

     

     

    86.0

    %

     

    $

    578

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Three Months Ended December 31, 2018

    California

    1.8

     

     

    $

    533

     

     

    $

    285.98

     

     

    $

    461

     

     

    $

    247.66

     

     

    86.6

    %

     

    $

    72

     

    Florida

    1.1

     

     

    432

     

     

    392.68

     

     

    377

     

     

    343.49

     

     

    87.5

     

     

    55

     

    Illinois

    0.7

     

     

    242

     

     

    361.29

     

     

    196

     

     

    291.63

     

     

    80.7

     

     

    46

     

    Michigan

    1.2

     

     

    400

     

     

    344.96

     

     

    328

     

     

    282.58

     

     

    81.9

     

     

    72

     

    New Mexico (2)

    0.7

     

     

    327

     

     

    474.44

     

     

    284

     

     

    414.10

     

     

    87.3

     

     

    43

     

    Ohio

    1.0

     

     

    634

     

     

    654.39

     

     

    547

     

     

    564.37

     

     

    86.2

     

     

    87

     

    Puerto Rico

    0.8

     

     

    147

     

     

    173.81

     

     

    135

     

     

    158.97

     

     

    91.5

     

     

    12

     

    South Carolina

    0.3

     

     

    126

     

     

    352.67

     

     

    106

     

     

    299.17

     

     

    84.8

     

     

    20

     

    Texas

    1.3

     

     

    850

     

     

    663.84

     

     

    691

     

     

    539.68

     

     

    81.3

     

     

    159

     

    Washington

    2.3

     

     

    556

     

     

    238.21

     

     

    490

     

     

    209.76

     

     

    88.1

     

     

    66

     

    Other (1)

    0.6

     

     

    191

     

     

    344.44

     

     

    160

     

     

    285.37

     

     

    82.9

     

     

    31

     

     

    11.8

     

     

    $

    4,438

     

     

    $

    375.33

     

     

    $

    3,775

     

     

    $

    319.24

     

     

    85.1

    %

     

    $

    663

     

     

     

    Year Ended December 31, 2019

    California

    7.1

     

     

    $

    2,266

     

     

    $

    318.22

     

     

    $

    1,837

     

     

    $

    257.91

     

     

    81.0

    %

     

    $

    429

     

    Florida

    1.8

     

     

    734

     

     

    405.52

     

     

    590

     

     

    326.11

     

     

    80.4

     

     

    144

     

    Illinois

    2.7

     

     

    1,002

     

     

    377.13

     

     

    872

     

     

    328.11

     

     

    87.0

     

     

    130

     

    Michigan

    4.4

     

     

    1,624

     

     

    370.57

     

     

    1,331

     

     

    303.71

     

     

    82.0

     

     

    293

     

    Ohio

    3.7

     

     

    2,553

     

     

    688.80

     

     

    2,286

     

     

    616.86

     

     

    89.6

     

     

    267

     

    Puerto Rico

    2.3

     

     

    474

     

     

    204.88

     

     

    420

     

     

    181.85

     

     

    88.8

     

     

    54

     

    South Carolina

    1.6

     

     

    583

     

     

    375.13

     

     

    511

     

     

    328.58

     

     

    87.6

     

     

    72

     

    Texas

    4.3

     

     

    2,991

     

     

    691.31

     

     

    2,614

     

     

    604.14

     

     

    87.4

     

     

    377

     

    Washington

    9.8

     

     

    2,695

     

     

    275.05

     

     

    2,390

     

     

    243.91

     

     

    88.7

     

     

    305

     

    Other (1) (2)

    3.1

     

     

    1,286

     

     

    413.61

     

     

    1,054

     

     

    338.98

     

     

    82.0

     

     

    232

     

     

    40.8

     

     

    $

    16,208

     

     

    $

    397.47

     

     

    $

    13,905

     

     

    $

    340.99

     

     

    85.8

    %

     

    $

    2,303

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Year Ended December 31, 2018

    California

    7.7

     

     

    $

    2,150

     

     

    $

    278.13

     

     

    $

    1,849

     

     

    $

    239.28

     

     

    86.0

    %

     

    $

    301

     

    Florida

    4.8

     

     

    1,790

     

     

    376.84

     

     

    1,513

     

     

    318.58

     

     

    84.5

     

     

    277

     

    Illinois

    2.5

     

     

    793

     

     

    322.87

     

     

    670

     

     

    272.61

     

     

    84.4

     

     

    123

     

    Michigan

    4.7

     

     

    1,601

     

     

    340.35

     

     

    1,334

     

     

    283.47

     

     

    83.3

     

     

    267

     

    New Mexico (2)

    2.9

     

     

    1,356

     

     

    467.17

     

     

    1,214

     

     

    418.44

     

     

    89.6

     

     

    142

     

    Ohio

    4.0

     

     

    2,388

     

     

    600.62

     

     

    2,079

     

     

    522.89

     

     

    87.1

     

     

    309

     

    Puerto Rico

    3.7

     

     

    696

     

     

    186.59

     

     

    636

     

     

    170.45

     

     

    91.4

     

     

    60

     

    South Carolina

    1.4

     

     

    495

     

     

    351.38

     

     

    429

     

     

    304.85

     

     

    86.8

     

     

    66

     

    Texas

    5.4

     

     

    3,244

     

     

    601.23

     

     

    2,685

     

     

    497.75

     

     

    82.8

     

     

    559

     

    Washington

    9.3

     

     

    2,361

     

     

    252.92

     

     

    2,139

     

     

    229.13

     

     

    90.6

     

     

    222

     

    Other (1)

    2.2

     

     

    738

     

     

    336.86

     

     

    589

     

     

    268.17

     

     

    79.6

     

     

    149

     

     

    48.6

     

     

    $

    17,612

     

     

    $

    362.54

     

     

    $

    15,137

     

     

    $

    311.59

     

     

    85.9

    %

     

    $

    2,475

     

    __________________

    (1) “Other” includes the Idaho, Mississippi, New York, Utah and Wisconsin health plans, which are not individually significant to the Company’s consolidated operating results.

    (2) In 2019, “Other” includes the New Mexico health plan. The New Mexico health plan’s Medicaid contract terminated on December 31, 2018, and therefore its 2019 results are not individually significant to the Company’s consolidated operating results.

     

    SELECTED FINANCIAL DATA

    The following table provides details of the Company’s medical care costs for the periods indicated:

     

    Three Months Ended December 31,

     

    2019

     

    2018

     

    Amount

     

    PMPM

     

    % of
    Total

     

    Amount

     

    PMPM

     

    % of
    Total

    Fee for service

    $

    2,660

     

     

    $

    264.20

     

     

    75.0

    %

     

    $

    2,807

     

     

    $

    237.39

     

     

    74.4

    %

    Pharmacy

    427

     

     

    42.43

     

     

    12.0

     

     

    493

     

     

    41.68

     

     

    13.1

     

    Capitation

    293

     

     

    29.06

     

     

    8.3

     

     

    293

     

     

    24.83

     

     

    7.7

     

    Other

    165

     

     

    16.34

     

     

    4.7

     

     

    182

     

     

    15.34

     

     

    4.8

     

     

    $

    3,545

     

     

    $

    352.03

     

     

    100.0

    %

     

    $

    3,775

     

     

    $

    319.24

     

     

    100.0

    %

     

     

    Year Ended December 31,

     

    2019

     

    2018

     

    Amount

     

    PMPM

     

    % of
    Total

     

    Amount

     

    PMPM

     

    % of
    Total

    Fee for service

    $

    10,453

     

     

    $

    256.34

     

     

    75.1

    %

     

    $

    11,278

     

     

    $

    232.15

     

     

    74.5

    %

    Pharmacy

    1,681

     

     

    41.23

     

     

    12.1

     

     

    2,138

     

     

    44.01

     

     

    14.1

     

    Capitation

    1,149

     

     

    28.17

     

     

    8.3

     

     

    1,184

     

     

    24.38

     

     

    7.8

     

    Other

    622

     

     

    15.25

     

     

    4.5

     

     

    537

     

     

    11.05

     

     

    3.6

     

     

    $

    13,905

     

     

    $

    340.99

     

     

    100.0

    %

     

    $

    15,137

     

     

    $

    311.59

     

     

    100.0

    %

     
     

    The following table provides details of the Company’s medical claims and benefits payable as of the dates indicated:

     

    December 31,

     

    2019

     

    2018

    Fee-for-service claims incurred but not paid (IBNP)

    $

    1,406

     

     

    $

    1,562

     

    Pharmacy payable

    126

     

     

    115

     

    Capitation payable

    55

     

     

    52

     

    Other (1)

    267

     

     

    232

     

     

    $

    1,854

     

     

    $

    1,961

     

    ______________________

    (1) “Other” medical claims and benefits payable include amounts payable to certain providers for which the Company acts as an intermediary on behalf of various state agencies without assuming financial risk. Such receipts and payments do not impact the Company’s consolidated statements of income. As of December 31, 2019 and 2018, the Company had recorded non-risk provider payables of approximately $132 million and $107 million, respectively.

     

    SUMMARY OF NON-RUN RATE ITEMS AFFECTING CURRENT QUARTER AND YEAR-TO-DATE FINANCIAL RESULTS

    (In millions, except per diluted share amounts)

     

    The table below summarizes the impact of certain expenses and other items that management believes are not indicative of longer-term business trends and operations. The individual items presented below increase (decrease) income before income tax expense.

     

     

    Three Months Ended December 31,

     

    Year Ended December 31,

     

    2019

     

    2018

     

    2019

     

    2018

     

    Amount

     

    Per
    Diluted
    Share (1)

     

    Amount

     

    Per
    Diluted
    Share (1)

     

    Amount

     

    Per
    Diluted
    Share (1)

     

    Amount

     

    Per
    Diluted
    Share (1)

    Gain (loss) on debt repayment

    $

     

     

    $

     

     

    $

    3

     

     

    $

    0.04

     

     

    $

    15

     

     

    $

    0.18

     

     

    $

    (22

    )

     

    $

    (0.29

    )

    Restructuring costs

    (1

    )

     

    (0.01

    )

     

    (8

    )

     

    (0.09

    )

     

    (6

    )

     

    (0.07

    )

     

    (46

    )

     

    (0.54

    )

    Loss on sales of subsidiaries, net of gain

     

     

     

     

    (52

    )

     

    (0.48

    )

     

     

     

     

     

    (15

    )

     

    (0.05

    )

     

    $

    (1

    )

     

    $

    (0.01

    )

     

    $

    (57

    )

     

    $

    (0.53

    )

     

    $

    9

     

     

    $

    0.11

     

     

    $

    (83

    )

     

    $

    (0.88

    )

    ______________________

    (1) Except for permanent differences between GAAP and tax (such as certain expenses that are not deductible for tax purposes), per diluted share amounts are generally calculated at the statutory income tax rate of 22.6% and 22% for 2019 and 2018, respectively.

     

    NON-GAAP FINANCIAL MEASURES

     

     

    Three Months Ended December 31,

     

    Year Ended December 31,

    2019

     

    2018

     

    2019

     

    2018

     

     

     

    Amount

     

    Per
    Diluted
    Share

     

    Amount

     

    Per
    Diluted
    Share

     

    Amount

     

    Per
    Diluted
    Share

     

    Amount

     

    Per
    Diluted
    Share

    Net income

    $

    168

     

     

    $

    2.67

     

     

    $

    201

     

     

    $

    3.01

     

     

    $

    737

     

     

    $

    11.47

     

     

    $

    707

     

     

    $

    10.61

     

    Adjustment:

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Amortization of intangible assets

    4

     

     

    0.06

     

     

    6

     

     

    0.08

     

     

    17

     

     

    0.27

     

     

    22

     

     

    0.32

     

    Income tax effect (1)

    (1

    )

     

    (0.01

    )

     

    (1

    )

     

    (0.02

    )

     

    (4

    )

     

    (0.06

    )

     

    (5

    )

     

    (0.07

    )

    Adjustment, net of tax effect

    3

     

     

    0.05

     

     

    5

     

     

    0.06

     

     

    13

     

     

    0.21

     

     

    17

     

     

    0.25

     

    Adjusted net income

    $

    171

     

     

    $

    2.72

     

     

    $

    206

     

     

    $

    3.07

     

     

    $

    750

     

     

    $

    11.68

     

     

    $

    724

     

     

    $

    10.86

     

    ________________________

    (1) Income tax effect of adjustments calculated at the blended federal and state statutory tax rate of 22.6% and 22% for 2019 and 2018, respectively.

    Adjustments made to GAAP measures used to calculate the non-GAAP measures used in this news release follow:

    Adjusted net income: Net income on a GAAP basis less amortization of intangible assets, net of income tax effect calculated at the statutory tax rate. The Company believes that adjusted net income is helpful in assessing the Company’s financial performance exclusive of the non-cash impact of the amortization of purchased intangibles.

    Adjusted net income per diluted share: Adjusted net income divided by weighted average common shares outstanding on a fully diluted basis.



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    Molina Healthcare Reports Fourth Quarter and Year-End 2019 Financial Results Molina Healthcare, Inc. (NYSE: MOH) today reported net income for the fourth quarter of 2019 of $168 million, or $2.67 per diluted share, compared to net income of $201 million, or $3.01 per diluted share, for the fourth quarter of 2018. The Company …