On Improved Medicaid, Molina Projects Earnings Growth for 2020
In the midst of a financial turnaround, Molina Healthcare, Inc. impressed analysts with its fourth-quarter and full-year 2019 earnings reported on Feb. 10. Namely, the company reported a better-than-expected medical loss ratio (MLR) of 86.0%, which it attributed to improvements in the Medicaid business.
That fourth-quarter 2019 MLR was a slight increase from 85.1% for the fourth quarter of 2018, but Molina attributed that to a heightened MLR in its Affordable Care Act exchange business and said the company’s Medicaid MLR improved sequentially by 80 basis points to 87.3%. The overall MLR was 20 basis points below Wall Street consensus and 10 points below Evercore ISI’s expectation, pointed out securities analyst Michael Newshel on Feb. 10. For the year ending Dec. 31, 2019, the company’s Medicaid MLR was 88.0%, compared with 90.0% in 2018, “due to improvement in all programs.”
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