Molina Healthcare Reports Second Quarter 2019 Financial Results
Raises Full Year 2019 Earnings Guidance
LONG BEACH, Calif.--(BUSINESS WIRE)-- Molina Healthcare, Inc. (NYSE: MOH) today reported net income for the second quarter of 2019 of $196 million, or $3.06 per diluted share compared to net income of $202 million, or $3.02 per diluted share, in the second quarter of 2018. Financial results for the second quarter of 2019, are summarized below:
|
Three Months Ended |
|
Six Months Ended |
||||||||
|
June 30, |
|
June 30, |
||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||
|
(In millions, except per share results) |
||||||||||
Premium Revenue |
$4,049 |
|
|
$4,514 |
|
|
$8,001 |
|
|
$8,837 |
|
Total Revenue |
$4,193 |
|
|
$4,883 |
|
|
$8,312 |
|
|
$9,529 |
|
Pre-Tax Income |
$257 |
|
|
$305 |
|
|
$517 |
|
|
$484 |
|
Net Income |
$196 |
|
|
$202 |
|
|
$394 |
|
|
$309 |
|
EPS - Diluted |
$3.06 |
|
|
$3.02 |
|
|
$6.04 |
|
|
$4.68 |
|
|
|
|
|
|
|
|
|
||||
MCR |
85.6 |
% |
|
85.3 |
% |
|
85.5 |
% |
|
85.7 |
% |
G&A Ratio |
7.8 |
% |
|
6.9 |
% |
|
7.6 |
% |
|
7.2 |
% |
Pre-Tax Margin |
6.1 |
% |
|
6.2 |
% |
|
6.2 |
% |
|
5.1 |
% |
Effective Tax Rate |
24.0 |
% |
|
33.8 |
% |
|
23.9 |
% |
|
36.2 |
% |
After-Tax Margin |
4.7 |
% |
4.1 |
% |
4.7 |
% |
3.2 |
% |
|||
Highlights include:
- Premium revenue was $4.0 billion in the second quarter of 2019, a 10.3% decrease compared with the second quarter of 2018, which was in line with the Company’s expectations.
- Medical care ratio (MCR) was 85.6% in the second quarter of 2019, and 85.3% for the second quarter of 2018.
- General and administrative (G&A) expense ratio increased to 7.8% in the second quarter, compared to 6.9% for the second quarter of 2018.
- The second quarter results benefited from $12 million, or $0.15 per share, net gain for the repayment of convertible notes and restructuring costs.
- After-tax margin was 4.7% for the second quarter of 2019 compared to 4.1% in the second quarter of 2018. Excluding the net gain, after tax margin would have been 4.4% for the second quarter of 2019.
- Cash at the parent company amounted to $467 million as of June 30, 2019.
- Operating cash flows for the six months ended June 30, 2019, was $156 million.
- Raised full year 2019 earnings guidance to $11.20 - $11.50 from $10.50 - $11.00, which does not include any future prior-period reserve development.
“We are very pleased with our strong start to the year, a year in which we intend to demonstrate that we can sustain our attractive margin profile while pivoting to growth,” said Joe Zubretsky, president and CEO. “The business continues to generate significant excess cash flow and our revenue growth initiatives are well under way. Our quarter and year to date results, and the earnings trajectory of our entire portfolio of businesses leading into the second half of the year, give us the confidence to raise full year guidance.”
Premium Revenue
Premium revenue for the second quarter of 2019 decreased 10.3% to $4.0 billion compared to $4.5 billion in the second quarter of 2018, which was in line with Company expectations.
For the six months ended June 30, 2019, premium revenue decreased 9.5% to $8.0 billion from $8.8 billion for the comparable period in 2018. In both periods, the lower premium revenue is primarily a result of lower Medicaid membership due to the previously announced loss of the New Mexico Medicaid contract, along with the resizing of the Florida Medicaid contract and the related transition out of all but two Florida regions as reported throughout 2018.
Medical Care Ratio
The consolidated MCR for the second quarter of 2019 was 85.6% compared to 85.3% in the second quarter of 2018. Favorable prior period development for the second quarter was $28 million pre-tax.
The MCR for the six months ended June 30, 2019, improved to 85.5% compared to 85.7% for the comparable period in 2018, due to a combination of the following:
- The Medicaid MCR improved to 88.3% compared to 90.3% for the six months ended June 30, 2018, primarily due to improvement in the TANF and ABD programs, partially offset by an increased MCR in the Medicaid Expansion program, primarily in California.
- The Medicare MCR was relatively stable at 85.0% compared to 84.9% for the six months ended June 30, 2018.
- The Marketplace MCR was 64.7% compared to 54.4% for the six months ended June 30, 2018. The prior period was positively impacted by the Cost Sharing Reduction (CSR) reimbursement. In addition, the current year was impacted by a relatively smaller benefit from prior year Marketplace risk adjustment compared to 2018.
General and Administrative Expense Ratio
The general and administrative expenses were 7.8% of total revenues in the second quarter of 2019 compared to 6.9% in the second quarter of 2018.
For the six months ended June 30, 2019, the G&A ratio was 7.6% compared to 7.2% in the comparable prior-year period. In both periods, the year-over-year increases are mainly associated with the decrease in premium revenue.
Interest Expense
The second quarter interest expense was $22 million compared to $32 million in the second quarter of 2018. The decline was due to continued repayment of debt.
Restructuring Costs/Other Income and Expenses
The second quarter results benefited from a $14 million gain on the repayment of convertible notes in the current period, offset somewhat by $2 million in restructuring costs, resulting in a $0.15 net benefit per diluted share.
Balance Sheet
Cash at the parent company amounted to $467 million as of June 30, 2019, compared to $443 million as of March 31, 2019.
During the quarter the Company received $345 million of dividends from the regulated health plan subsidiaries.
The Company made $139 million in principal repayments on the convertible notes during the quarter and $185 million in repayments since the beginning of the year. The impact of capital deployment actions in the quarter resulted in lower interest expense, a gain on repayment of the convertible notes and a lower share count.
Cash Flow
Operating cash flows for the six months ended June 30, 2019, was $156 million and is lower compared to the six months ended June 30, 2018, primarily due to timing of government payments.
Outlook
The Company raised its full year 2019 earnings guidance range to $11.20 to $11.50 per diluted share, with a midpoint of $11.35, from previously issued guidance of $10.50 to $11.00.
Guidance is based on the following:
- Assumes no future restructuring or one-time significant items; and
- Assumes no future prior period development.
|
|
July 30, 2019 (1) |
|
April 29, 2019 (1) |
|
|
|
(current) |
|
(previous) |
|
Premium revenue |
|
$16.1B |
|
$15.9B |
|
Medicaid |
|
$12.3B |
|
$12.2B |
|
Medicare |
|
$2.2B |
|
$2.2B |
|
Marketplace |
|
$1.6B |
|
$1.5B |
|
Premium tax revenue |
|
$450M |
|
$425M |
|
Investment income and other revenue |
|
$115M |
|
$115M |
|
Total revenue |
|
$16.7B |
|
$16.4B |
|
Medical care costs |
|
$13.8B |
|
$13.6B |
|
General and administrative expenses |
|
$1.3B |
|
$1.3B |
|
Premium tax expenses |
|
$450M |
|
$425M |
|
EBITDA (2) |
|
$1,135M - $1,160M |
|
$1,080M - $1,120M |
|
Depreciation and amortization |
|
$90M |
|
$90M |
|
Interest expense and other expenses, net |
|
$90M |
|
$90M |
|
Income before income taxes |
|
$955M - $980M |
|
$900M - $940M |
|
Net income |
|
$725M - $740M |
|
$680M - $710M |
|
Net income per share |
|
$11.20 - $11.50 |
|
$10.50 - $11.00 |
|
Diluted weighted average shares |
|
64.5M |
|
64.7M |
|
|
|
|
|
|
|
End-of-year membership: |
|
|
|
|
|
Medicaid and Medicare |
|
3.1M |
|
3.1M |
|
Marketplace |
|
270K - 280K |
|
270K - 280K |
|
|
|
|
|
|
|
Operating Statistics: |
|
|
|
|
|
Medical care ratio |
|
86% |
|
86% |
|
G&A ratio |
|
7.7% |
|
7.7% |
|
Effective income tax expense rate |
|
24.2% |
|
24.5% |
|
After-tax margin |
|
4.2% - 4.4% |
|
4.1% - 4.3% |
|
Medicaid |
|
3% |
|
3% |
|
Medicare |
|
7% |
|
6% |
|
Marketplace |
|
11% |
|
11% |
|
| __________________ | |||||
(1) |
All amounts are rounded and approximations. |
||||
(2) |
See reconciliation of non-GAAP financial measures at the end of this release. |
||||
Conference Call
Management will host a conference call and webcast to discuss Molina Healthcare’s second quarter 2019 results at 8:00 a.m. Eastern time on Wednesday, July 31, 2019. The number to call for the interactive teleconference is (877) 883-0383 and the confirmation number is 0428160. A telephonic replay of the conference call will be available through Wednesday, August 7, 2019, by dialing (877) 344-7529 and entering confirmation number 10132714. 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 health care services under the Medicaid and Medicare programs and through the state insurance marketplaces. Through its locally operated health plans, Molina Healthcare served approximately 3.4 million members as of June 30, 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 revised 2019 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” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, and the section entitled “Forward-Looking Statements” in the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 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 July 30, 2019, 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 |
|
Six Months Ended |
||||||||||||
|
June 30, |
|
June 30, |
||||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
|
(In millions, except per-share amounts) |
||||||||||||||
Revenue: |
|
|
|
|
|
|
|
||||||||
Premium revenue |
$ |
4,049 |
|
|
$ |
4,514 |
|
|
$ |
8,001 |
|
|
$ |
8,837 |
|
Premium tax revenue |
110 |
|
|
106 |
|
|
248 |
|
|
210 |
|
||||
Health insurer fees reimbursed |
— |
|
|
104 |
|
|
— |
|
|
165 |
|
||||
Service revenue |
— |
|
|
127 |
|
|
— |
|
|
261 |
|
||||
Investment income and other revenue |
34 |
|
|
32 |
|
|
63 |
|
|
56 |
|
||||
Total revenue |
4,193 |
|
|
4,883 |
|
|
8,312 |
|
|
9,529 |
|
||||
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Medical care costs |
3,466 |
|
|
3,850 |
|
|
6,837 |
|
|
7,572 |
|
||||
General and administrative expenses |
328 |
|
|
335 |
|
|
630 |
|
|
687 |
|
||||
Premium tax expenses |
110 |
|
|
106 |
|
|
248 |
|
|
210 |
|
||||
Health insurer fees |
— |
|
|
99 |
|
|
— |
|
|
174 |
|
||||
Depreciation and amortization |
22 |
|
|
25 |
|
|
47 |
|
|
51 |
|
||||
Restructuring costs |
2 |
|
|
8 |
|
|
5 |
|
|
33 |
|
||||
Cost of service revenue |
— |
|
|
118 |
|
|
— |
|
|
238 |
|
||||
Total operating expenses |
3,928 |
|
|
4,541 |
|
|
7,767 |
|
|
8,965 |
|
||||
Operating income |
265 |
|
|
342 |
|
|
545 |
|
|
564 |
|
||||
Other expenses, net: |
|
|
|
|
|
|
|
||||||||
Interest expense |
22 |
|
|
32 |
|
|
45 |
|
|
65 |
|
||||
Other (income) expenses, net |
(14 |
) |
|
5 |
|
|
(17 |
) |
|
15 |
|
||||
Total other expenses, net |
8 |
|
|
37 |
|
|
28 |
|
|
80 |
|
||||
Income before income tax expense |
257 |
|
|
305 |
|
|
517 |
|
|
484 |
|
||||
Income tax expense |
61 |
|
|
103 |
|
|
123 |
|
|
175 |
|
||||
Net income |
$ |
196 |
|
|
$ |
202 |
|
|
$ |
394 |
|
|
$ |
309 |
|
|
|
|
|
|
|
|
|
||||||||
Net income per share, diluted |
$ |
3.06 |
|
|
$ |
3.02 |
|
|
$ |
6.04 |
|
|
$ |
4.68 |
|
|
|
|
|
|
|
|
|
||||||||
Diluted weighted average shares outstanding |
64.0 |
|
|
66.7 |
|
|
65.1 |
|
|
66.0 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating Statistics: |
|
|
|
|
|
|
|
||||||||
Medical care ratio |
85.6 |
% |
|
85.3 |
% |
|
85.5 |
% |
|
85.7 |
% |
||||
G&A ratio |
7.8 |
% |
|
6.9 |
% |
|
7.6 |
% |
|
7.2 |
% |
||||
Premium tax ratio |
2.6 |
% |
|
2.3 |
% |
|
3.0 |
% |
|
2.3 |
% |
||||
Effective income tax expense rate |
24.0 |
% |
|
33.8 |
% |
|
23.9 |
% |
|
36.2 |
% |
||||
After-tax margin |
4.7 |
% |
|
4.1 |
% |
|
4.7 |
% |
|
3.2 |
% |
||||
Medicaid |
3.1 |
% |
|
2.3 |
% |
|
3.0 |
% |
|
1.6 |
% |
||||
Medicare |
7.1 |
% |
|
5.7 |
% |
|
7.4 |
% |
|
4.9 |
% |
||||
Marketplace |
11.2 |
% |
|
16.9 |
% |
|
13.6 |
% |
|
17.4 |
% |
||||
CONSOLIDATED BALANCE SHEETS |
|||||||
|
June 30, |
|
Dec. 31, |
||||
|
2019 |
|
2018 |
||||
|
Unaudited |
|
|
||||
|
(Dollars in millions,
|
||||||
ASSETS |
|||||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
2,253 |
|
|
$ |
2,826 |
|
Investments |
2,070 |
|
|
1,681 |
|
||
Receivables |
1,239 |
|
|
1,330 |
|
||
Prepaid expenses and other current assets |
132 |
|
|
149 |
|
||
Derivative asset |
169 |
|
|
476 |
|
||
Total current assets |
5,863 |
|
|
6,462 |
|
||
Property, equipment, and capitalized software, net |
373 |
|
|
241 |
|
||
Goodwill and intangible assets, net |
180 |
|
|
190 |
|
||
Restricted investments |
98 |
|
|
120 |
|
||
Deferred income taxes |
70 |
|
|
117 |
|
||
Other assets |
106 |
|
|
24 |
|
||
|
$ |
6,690 |
|
|
$ |
7,154 |
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|||||||
Current liabilities: |
|
|
|
||||
Medical claims and benefits payable |
$ |
1,767 |
|
|
$ |
1,961 |
|
Amounts due government agencies |
984 |
|
|
967 |
|
||
Accounts payable and accrued liabilities |
373 |
|
|
390 |
|
||
Deferred revenue |
30 |
|
|
211 |
|
||
Current portion of long-term debt |
65 |
|
|
241 |
|
||
Derivative liability |
169 |
|
|
476 |
|
||
Total current liabilities |
3,388 |
|
|
4,246 |
|
||
Long-term debt |
1,241 |
|
|
1,020 |
|
||
Finance lease liabilities |
232 |
|
|
197 |
|
||
Other long-term liabilities |
93 |
|
|
44 |
|
||
Total liabilities |
4,954 |
|
|
5,507 |
|
||
Stockholders’ equity: |
|
|
|
||||
Common stock, $0.001 par value, 150 million shares authorized; outstanding: 63 million shares at June 30, 2019 and 62 million shares at December 31, 2018 |
— |
|
|
— |
|
||
Preferred stock, $0.001 par value; 20 million shares authorized, no shares issued and outstanding |
— |
|
|
— |
|
||
Additional paid-in capital |
240 |
|
|
643 |
|
||
Accumulated other comprehensive income (loss) |
5 |
|
|
(8 |
) |
||
Retained earnings |
1,491 |
|
|
1,012 |
|
||
Total stockholders’ equity |
1,736 |
|
|
1,647 |
|
||
$ |
6,690 |
$ |
7,154 |
|
|||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
June 30, |
|
June 30, |
||||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
|
(In millions) |
||||||||||||||
Operating activities: |
|
|
|
|
|
|
|
||||||||
Net income |
$ |
196 |
|
|
$ |
202 |
|
|
$ |
394 |
|
|
$ |
309 |
|
Adjustments to reconcile net income to net cash (used in) provided by operating activities: |
|
|
|
|
|
|
|
||||||||
Depreciation and amortization |
22 |
|
|
36 |
|
|
47 |
|
|
73 |
|
||||
Deferred income taxes |
4 |
|
|
— |
|
|
19 |
|
|
(6 |
) |
||||
Share-based compensation |
10 |
|
|
7 |
|
|
19 |
|
|
13 |
|
||||
Amortization of convertible senior notes and finance lease liabilities |
1 |
|
|
6 |
|
|
4 |
|
|
13 |
|
||||
(Gain) loss on debt extinguishment |
(14 |
) |
|
5 |
|
|
(17 |
) |
|
15 |
|
||||
Non-cash restructuring costs |
— |
|
|
— |
|
|
— |
|
|
17 |
|
||||
Other, net |
— |
|
|
2 |
|
|
3 |
|
|
4 |
|
||||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
||||||||
Receivables |
120 |
|
|
(232 |
) |
|
91 |
|
|
(315 |
) |
||||
Prepaid expenses and other current assets |
(2 |
) |
|
58 |
|
|
18 |
|
|
(181 |
) |
||||
Medical claims and benefits payable |
(228 |
) |
|
(104 |
) |
|
(194 |
) |
|
(267 |
) |
||||
Amounts due government agencies |
52 |
|
|
33 |
|
|
17 |
|
|
205 |
|
||||
Accounts payable and accrued liabilities |
(31 |
) |
|
30 |
|
|
(61 |
) |
|
349 |
|
||||
Deferred revenue |
(177 |
) |
|
(172 |
) |
|
(181 |
) |
|
(42 |
) |
||||
Income taxes |
(46 |
) |
|
49 |
|
|
(3 |
) |
|
127 |
|
||||
Net cash (used in) provided by operating activities |
(93 |
) |
|
(80 |
) |
|
156 |
|
|
314 |
|
||||
Investing activities: |
|
|
|
|
|
|
|
||||||||
Purchases of investments |
(977 |
) |
|
(525 |
) |
|
(1,162 |
) |
|
(914 |
) |
||||
Proceeds from sales and maturities of investments |
425 |
|
|
792 |
|
|
791 |
|
|
1,335 |
|
||||
Purchases of property, equipment, and capitalized software |
(14 |
) |
|
(10 |
) |
|
(20 |
) |
|
(14 |
) |
||||
Other, net |
2 |
|
|
(4 |
) |
|
(2 |
) |
|
(9 |
) |
||||
Net cash (used in) provided by investing activities |
(564 |
) |
|
253 |
|
|
(393 |
) |
|
398 |
|
||||
Financing activities: |
|
|
|
|
|
|
|
||||||||
Repayment of principal amount of 1.125% Convertible Notes |
(139 |
) |
|
(89 |
) |
|
(185 |
) |
|
(89 |
) |
||||
Cash paid for partial settlement of 1.125% Conversion Option |
(358 |
) |
|
(134 |
) |
|
(473 |
) |
|
(134 |
) |
||||
Cash received for partial termination of 1.125% Call Option |
358 |
|
|
134 |
|
|
473 |
|
|
134 |
|
||||
Cash paid for partial termination of 1.125% Warrants |
(321 |
) |
|
(113 |
) |
|
(424 |
) |
|
(113 |
) |
||||
Proceeds from borrowings under Term Loan Facility |
120 |
|
|
— |
|
|
220 |
|
|
— |
|
||||
Repayment of Credit Facility |
— |
|
|
(300 |
) |
|
— |
|
|
(300 |
) |
||||
Other, net |
26 |
|
|
4 |
|
|
27 |
|
|
(1 |
) |
||||
Net cash used in financing activities |
(314 |
) |
|
(498 |
) |
|
(362 |
) |
|
(503 |
) |
||||
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents |
(971 |
) |
|
(325 |
) |
|
(599 |
) |
|
209 |
|
||||
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period |
3,298 |
|
|
3,824 |
|
|
2,926 |
|
|
3,290 |
|
||||
Cash, cash equivalents, and restricted cash and cash equivalents at end of period |
$ |
2,327 |
$ |
3,499 |
|
$ |
2,327 |
|
$ |
3,499 |
|||||
HEALTH PLANS SEGMENT MEMBERSHIP |
|||||||||
|
June 30,
|
|
Dec. 31,
|
|
June 30,
|
||||
Ending Membership by Government Program: |
|
|
|
|
|
||||
TANF and CHIP |
2,008,000 |
|
|
2,295,000 |
|
|
2,464,000 |
|
|
Medicaid Expansion |
595,000 |
|
|
660,000 |
|
|
675,000 |
|
|
ABD |
359,000 |
|
|
406,000 |
|
|
415,000 |
|
|
Total Medicaid |
2,962,000 |
|
|
3,361,000 |
|
|
3,554,000 |
|
|
MMP - Integrated |
57,000 |
|
|
54,000 |
|
|
55,000 |
|
|
Medicare Special Needs Plans |
43,000 |
|
|
44,000 |
|
|
45,000 |
|
|
Total Medicare |
100,000 |
|
|
98,000 |
|
|
100,000 |
|
|
Total Medicaid and Medicare |
3,062,000 |
|
|
3,459,000 |
|
|
3,654,000 |
|
|
Marketplace |
308,000 |
|
|
362,000 |
|
|
409,000 |
|
|
|
3,370,000 |
|
|
3,821,000 |
|
|
4,063,000 |
|
|
|
|
|
|
|
|
||||
Ending Membership by Health Plan: |
|
|
|
|
|
||||
California |
590,000 |
|
|
608,000 |
|
|
639,000 |
|
|
Florida (1) |
142,000 |
|
|
313,000 |
|
|
398,000 |
|
|
Illinois |
221,000 |
|
|
224,000 |
|
|
219,000 |
|
|
Michigan |
360,000 |
|
|
383,000 |
|
|
397,000 |
|
|
New Mexico (1) |
26,000 |
|
|
222,000 |
|
|
241,000 |
|
|
Ohio |
297,000 |
|
|
302,000 |
|
|
320,000 |
|
|
Puerto Rico |
200,000 |
|
|
252,000 |
|
|
326,000 |
|
|
South Carolina |
130,000 |
|
|
120,000 |
|
|
114,000 |
|
|
Texas |
360,000 |
|
|
423,000 |
|
|
450,000 |
|
|
Washington |
811,000 |
|
|
781,000 |
|
|
776,000 |
|
|
Other (2) |
233,000 |
|
|
193,000 |
|
|
183,000 |
|
|
|
3,370,000 |
|
|
3,821,000 |
|
|
4,063,000 |
|
|
| __________________ | |||||||||
(1)
|
The Company’s Medicaid contracts in New Mexico and in all but two regions in Florida terminated in late 2018 and early 2019. During 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. |
||||||||
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
|
||||||||||||||||
|
|
Total |
|
PMPM |
|
Total |
|
PMPM |
|
|
|||||||||||||||
|
Three Months Ended June 30, 2019 |
||||||||||||||||||||||||
TANF and CHIP |
6.1 |
|
|
$ |
1,196 |
|
|
$ |
196.36 |
|
|
$ |
1,048 |
|
|
$ |
172.13 |
|
|
87.7 |
% |
|
$ |
148 |
|
Medicaid Expansion |
1.8 |
|
|
695 |
|
|
384.94 |
|
|
594 |
|
|
328.85 |
|
|
85.4 |
|
|
101 |
|
|||||
ABD |
1.1 |
|
|
1,176 |
|
|
1,088.48 |
|
|
1,061 |
|
|
981.84 |
|
|
90.2 |
|
|
115 |
|
|||||
Total Medicaid |
9.0 |
|
|
3,067 |
|
|
341.72 |
|
|
2,703 |
|
|
301.15 |
|
|
88.1 |
|
|
364 |
|
|||||
MMP |
0.1 |
|
|
406 |
|
|
2,421.89 |
|
|
356 |
|
|
2,118.95 |
|
|
87.5 |
|
|
50 |
|
|||||
Medicare |
0.2 |
|
|
166 |
|
|
1,296.99 |
|
|
132 |
|
|
1,034.43 |
|
|
79.8 |
|
|
34 |
|
|||||
Total Medicare |
0.3 |
|
|
572 |
|
|
1,934.17 |
|
|
488 |
|
|
1,648.73 |
|
|
85.2 |
|
|
84 |
|
|||||
Total Medicaid and Medicare |
9.3 |
|
|
3,639 |
|
|
392.52 |
|
|
3,191 |
|
|
344.14 |
|
|
87.7 |
|
|
448 |
|
|||||
Marketplace |
0.9 |
|
|
410 |
|
|
440.20 |
|
|
275 |
|
|
295.71 |
|
|
67.2 |
|
|
135 |
|
|||||
|
10.2 |
|
|
$ |
4,049 |
|
|
$ |
396.87 |
|
|
$ |
3,466 |
|
|
$ |
339.72 |
|
|
85.6 |
% |
|
$ |
583 |
|
|
Three Months Ended June 30, 2018 |
||||||||||||||||||||||||
TANF and CHIP |
7.5 |
|
|
$ |
1,393 |
|
|
$ |
186.18 |
|
|
$ |
1,205 |
|
|
$ |
161.13 |
|
|
86.5 |
% |
|
$ |
188 |
|
Medicaid Expansion |
2.1 |
|
|
761 |
|
|
372.04 |
|
|
676 |
|
|
330.83 |
|
|
88.9 |
|
|
85 |
|
|||||
ABD |
1.3 |
|
|
1,288 |
|
|
1,033.34 |
|
|
1,209 |
|
|
969.27 |
|
|
93.8 |
|
|
79 |
|
|||||
Total Medicaid |
10.9 |
|
|
3,442 |
|
|
319.52 |
|
|
3,090 |
|
|
286.89 |
|
|
89.8 |
|
|
352 |
|
|||||
MMP |
0.1 |
|
|
367 |
|
|
2,224.30 |
|
|
313 |
|
|
1,893.91 |
|
|
85.1 |
|
|
54 |
|
|||||
Medicare |
0.2 |
|
|
157 |
|
|
1,168.40 |
|
|
133 |
|
|
989.33 |
|
|
84.7 |
|
|
24 |
|
|||||
Total Medicare |
0.3 |
|
|
524 |
|
|
1,751.49 |
|
|
446 |
|
|
1,488.85 |
|
|
85.0 |
|
|
78 |
|
|||||
Total Medicaid and Medicare |
11.2 |
|
|
3,966 |
|
|
358.23 |
|
|
3,536 |
|
|
319.37 |
|
|
89.2 |
|
|
430 |
|
|||||
Marketplace |
1.2 |
|
|
548 |
|
|
440.93 |
|
|
314 |
|
|
253.04 |
|
|
57.4 |
|
|
234 |
|
|||||
|
12.4 |
|
|
$ |
4,514 |
|
|
$ |
366.57 |
|
|
$ |
3,850 |
|
|
$ |
312.68 |
|
|
85.3 |
% |
|
$ |
664 |
|
|
Six Months Ended June 30, 2019 |
||||||||||||||||||||||||
TANF and CHIP |
12.3 |
|
|
$ |
2,369 |
|
|
$ |
192.83 |
|
|
$ |
2,070 |
|
|
$ |
168.56 |
|
|
87.4 |
% |
|
$ |
299 |
|
Medicaid Expansion |
3.6 |
|
|
1,359 |
|
|
377.30 |
|
|
1,188 |
|
|
329.65 |
|
|
87.4 |
|
|
171 |
|
|||||
ABD |
2.2 |
|
|
2,343 |
|
|
1,078.40 |
|
|
2,103 |
|
|
967.59 |
|
|
89.7 |
|
|
240 |
|
|||||
Total Medicaid |
18.1 |
|
|
6,071 |
|
|
336.20 |
|
|
5,361 |
|
|
296.85 |
|
|
88.3 |
|
|
710 |
|
|||||
MMP |
0.3 |
|
|
794 |
|
|
2,388.88 |
|
|
689 |
|
|
2,073.30 |
|
|
86.8 |
|
|
105 |
|
|||||
Medicare |
0.3 |
|
|
329 |
|
|
1,290.88 |
|
|
265 |
|
|
1,041.06 |
|
|
80.6 |
|
|
64 |
|
|||||
Total Medicare |
0.6 |
|
|
1,123 |
|
|
1,911.98 |
|
|
954 |
|
|
1,624.97 |
|
|
85.0 |
|
|
169 |
|
|||||
Total Medicaid and Medicare |
18.7 |
|
|
7,194 |
|
|
385.82 |
|
|
6,315 |
|
|
338.67 |
|
|
87.8 |
|
|
879 |
|
|||||
Marketplace |
1.9 |
|
|
807 |
|
|
415.94 |
|
|
522 |
|
|
269.14 |
|
|
64.7 |
|
|
285 |
|
|||||
|
20.6 |
|
|
$ |
8,001 |
|
|
$ |
388.66 |
|
|
$ |
6,837 |
|
|
$ |
332.11 |
|
|
85.5 |
% |
|
$ |
1,164 |
|
|
Six Months Ended June 30, 2018 |
||||||||||||||||||||||||
TANF and CHIP |
14.9 |
|
|
$ |
2,766 |
|
|
$ |
185.66 |
|
|
$ |
2,477 |
|
|
$ |
166.32 |
|
|
89.6 |
% |
|
$ |
289 |
|
Medicaid Expansion |
4.1 |
|
|
1,513 |
|
|
372.39 |
|
|
1,317 |
|
|
324.19 |
|
|
87.1 |
|
|
196 |
|
|||||
ABD |
2.5 |
|
|
2,542 |
|
|
1,023.83 |
|
|
2,364 |
|
|
951.99 |
|
|
93.0 |
|
|
178 |
|
|||||
Total Medicaid |
21.5 |
|
|
6,821 |
|
|
318.11 |
|
|
6,158 |
|
|
287.22 |
|
|
90.3 |
|
|
663 |
|
|||||
MMP |
0.3 |
|
|
724 |
|
|
2,180.86 |
|
|
618 |
|
|
1,858.87 |
|
|
85.2 |
|
|
106 |
|
|||||
Medicare |
0.3 |
|
|
314 |
|
|
1,178.58 |
|
|
264 |
|
|
992.05 |
|
|
84.2 |
|
|
50 |
|
|||||
Total Medicare |
0.6 |
|
|
1,038 |
|
|
1,735.05 |
|
|
882 |
|
|
1,473.30 |
|
|
84.9 |
|
|
156 |
|
|||||
Total Medicaid and Medicare |
22.1 |
|
|
7,859 |
|
|
356.59 |
|
|
7,040 |
|
|
319.43 |
|
|
89.6 |
|
|
819 |
|
|||||
Marketplace |
2.6 |
|
|
978 |
|
|
373.67 |
|
|
532 |
|
|
203.34 |
|
|
54.4 |
|
|
446 |
|
|||||
|
24.7 |
|
|
$ |
8,837 |
|
|
$ |
358.40 |
|
|
$ |
7,572 |
|
|
$ |
307.11 |
|
|
85.7 |
% |
|
$ |
1,265 |
|
| __________________ |
(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
|
||||||||||||||||
|
|
Total |
|
PMPM |
|
Total |
|
PMPM |
|
|
|||||||||||||||
|
Three Months Ended June 30, 2019 |
||||||||||||||||||||||||
California |
1.6 |
|
|
$ |
499 |
|
|
$ |
305.40 |
|
|
$ |
415 |
|
|
$ |
253.85 |
|
|
83.1 |
% |
|
$ |
84 |
|
Florida |
0.3 |
|
|
126 |
|
|
417.10 |
|
|
120 |
|
|
399.22 |
|
|
95.7 |
|
|
6 |
|
|||||
Illinois |
0.6 |
|
|
242 |
|
|
364.15 |
|
|
215 |
|
|
323.96 |
|
|
89.0 |
|
|
27 |
|
|||||
Michigan |
1.1 |
|
|
403 |
|
|
376.39 |
|
|
332 |
|
|
310.08 |
|
|
82.4 |
|
|
71 |
|
|||||
Ohio |
0.9 |
|
|
630 |
|
|
701.22 |
|
|
553 |
|
|
615.59 |
|
|
87.8 |
|
|
77 |
|
|||||
Puerto Rico |
0.6 |
|
|
122 |
|
|
198.95 |
|
|
109 |
|
|
177.56 |
|
|
89.2 |
|
|
13 |
|
|||||
South Carolina |
0.4 |
|
|
140 |
|
|
362.24 |
|
|
125 |
|
|
322.55 |
|
|
89.0 |
|
|
15 |
|
|||||
Texas |
0.7 |
|
|
598 |
|
|
916.74 |
|
|
551 |
|
|
844.02 |
|
|
92.1 |
|
|
47 |
|
|||||
Washington |
2.4 |
|
|
611 |
|
|
257.79 |
|
|
535 |
|
|
225.67 |
|
|
87.5 |
|
|
76 |
|
|||||
Other (1) (2) |
0.7 |
|
|
268 |
|
|
394.85 |
|
|
236 |
|
|
347.43 |
|
|
88.0 |
|
|
32 |
|
|||||
|
9.3 |
|
|
$ |
3,639 |
|
|
$ |
392.52 |
|
|
$ |
3,191 |
|
|
$ |
344.14 |
|
|
87.7 |
% |
|
$ |
448 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Three Months Ended June 30, 2018 |
||||||||||||||||||||||||
California |
1.8 |
|
|
$ |
517 |
|
|
$ |
289.80 |
|
|
$ |
441 |
|
|
$ |
247.36 |
|
|
85.4 |
% |
|
$ |
76 |
|
Florida |
1.2 |
|
|
377 |
|
|
353.81 |
|
|
362 |
|
|
339.31 |
|
|
95.9 |
|
|
15 |
|
|||||
Illinois |
0.6 |
|
|
203 |
|
|
311.60 |
|
|
170 |
|
|
261.59 |
|
|
84.0 |
|
|
33 |
|
|||||
Michigan |
1.2 |
|
|
388 |
|
|
342.45 |
|
|
331 |
|
|
292.20 |
|
|
85.3 |
|
|
57 |
|
|||||
New Mexico (2) |
0.7 |
|
|
313 |
|
|
469.88 |
|
|
290 |
|
|
435.36 |
|
|
92.7 |
|
|
23 |
|
|||||
Ohio |
1.0 |
|
|
535 |
|
|
571.08 |
|
|
482 |
|
|
514.57 |
|
|
90.1 |
|
|
53 |
|
|||||
Puerto Rico |
0.9 |
|
|
184 |
|
|
188.26 |
|
|
165 |
|
|
168.20 |
|
|
89.3 |
|
|
19 |
|
|||||
South Carolina |
0.4 |
|
|
123 |
|
|
350.22 |
|
|
107 |
|
|
304.20 |
|
|
86.9 |
|
|
16 |
|
|||||
Texas |
0.7 |
|
|
576 |
|
|
835.66 |
|
|
510 |
|
|
740.55 |
|
|
88.6 |
|
|
66 |
|
|||||
Washington |
2.2 |
|
|
571 |
|
|
252.61 |
|
|
526 |
|
|
232.49 |
|
|
92.0 |
|
|
45 |
|
|||||
Other (1) |
0.5 |
|
|
179 |
|
|
322.99 |
|
|
152 |
|
|
274.59 |
|
|
85.0 |
|
|
27 |
|
|||||
|
11.2 |
|
|
$ |
3,966 |
|
|
$ |
358.23 |
|
|
$ |
3,536 |
|
|
$ |
319.37 |
|
|
89.2 |
% |
|
$ |
430 |
|
|
Six Months Ended June 30, 2019 |
||||||||||||||||||||||||
California |
3.3 |
|
|
$ |
998 |
|
|
$ |
302.59 |
|
|
$ |
863 |
|
|
$ |
261.66 |
|
|
86.5 |
% |
|
$ |
135 |
|
Florida |
0.7 |
|
|
288 |
|
|
399.86 |
|
|
247 |
|
|
343.24 |
|
|
85.8 |
|
|
41 |
|
|||||
Illinois |
1.3 |
|
|
469 |
|
|
356.16 |
|
|
400 |
|
|
303.50 |
|
|
85.2 |
|
|
69 |
|
|||||
Michigan |
2.2 |
|
|
798 |
|
|
369.66 |
|
|
658 |
|
|
305.00 |
|
|
82.5 |
|
|
140 |
|
|||||
Ohio |
1.8 |
|
|
1,220 |
|
|
680.20 |
|
|
1,090 |
|
|
607.85 |
|
|
89.4 |
|
|
130 |
|
|||||
Puerto Rico |
1.2 |
|
|
224 |
|
|
181.91 |
|
|
199 |
|
|
161.40 |
|
|
88.7 |
|
|
25 |
|
|||||
South Carolina |
0.8 |
|
|
276 |
|
|
362.68 |
|
|
240 |
|
|
315.84 |
|
|
87.1 |
|
|
36 |
|
|||||
Texas |
1.3 |
|
|
1,197 |
|
|
909.59 |
|
|
1,083 |
|
|
822.59 |
|
|
90.4 |
|
|
114 |
|
|||||
Washington |
4.8 |
|
|
1,225 |
|
|
258.10 |
|
|
1,121 |
|
|
236.19 |
|
|
91.5 |
|
|
104 |
|
|||||
Other (1) (2) |
1.3 |
|
|
499 |
|
|
383.07 |
|
|
414 |
|
|
317.56 |
|
|
82.9 |
|
|
85 |
|
|||||
|
18.7 |
|
|
$ |
7,194 |
|
|
$ |
385.82 |
|
|
$ |
6,315 |
|
|
$ |
338.67 |
|
|
87.8 |
% |
|
$ |
879 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Six Months Ended June 30, 2018 |
||||||||||||||||||||||||
California |
3.6 |
|
|
$ |
1,011 |
|
|
$ |
281.14 |
|
|
$ |
853 |
|
|
$ |
237.26 |
|
|
84.4 |
% |
|
$ |
158 |
|
Florida |
2.2 |
|
|
759 |
|
|
352.68 |
|
|
707 |
|
|
328.26 |
|
|
93.1 |
|
|
52 |
|
|||||
Illinois |
1.1 |
|
|
344 |
|
|
305.94 |
|
|
292 |
|
|
259.87 |
|
|
84.9 |
|
|
52 |
|
|||||
Michigan |
2.3 |
|
|
764 |
|
|
339.56 |
|
|
662 |
|
|
294.19 |
|
|
86.6 |
|
|
102 |
|
|||||
New Mexico |
1.4 |
|
|
632 |
|
|
468.00 |
|
|
600 |
|
|
444.44 |
|
|
95.0 |
|
|
32 |
|
|||||
Ohio |
1.9 |
|
|
1,086 |
|
|
573.87 |
|
|
942 |
|
|
497.75 |
|
|
86.7 |
|
|
144 |
|
|||||
Puerto Rico |
1.9 |
|
|
370 |
|
|
190.68 |
|
|
339 |
|
|
174.74 |
|
|
91.6 |
|
|
31 |
|
|||||
South Carolina |
0.7 |
|
|
245 |
|
|
349.15 |
|
|
211 |
|
|
300.87 |
|
|
86.2 |
|
|
34 |
|
|||||
Texas |
1.4 |
|
|
1,138 |
|
|
822.72 |
|
|
1,029 |
|
|
744.05 |
|
|
90.4 |
|
|
109 |
|
|||||
Washington |
4.5 |
|
|
1,155 |
|
|
254.64 |
|
|
1,100 |
|
|
242.48 |
|
|
95.2 |
|
|
55 |
|
|||||
Other (1) |
1.1 |
|
|
355 |
|
|
318.94 |
|
|
305 |
|
|
273.97 |
|
|
85.9 |
|
|
50 |
|
|||||
|
22.1 |
|
|
$ |
7,859 |
|
|
$ |
356.59 |
|
|
$ |
7,040 |
|
|
$ |
319.43 |
|
|
89.6 |
% |
|
$ |
819 |
|
| __________________ |
(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
|
|
Premium Revenue |
|
Medical Care Costs |
|
MCR |
|
Medical
|
||||||||||||||||
|
|
Total |
|
PMPM |
|
Total |
|
PMPM |
|
|
|||||||||||||||
|
Three Months Ended June 30, 2019 |
||||||||||||||||||||||||
California |
0.2 |
|
|
$ |
61 |
|
|
$ |
382.22 |
|
|
$ |
35 |
|
|
$ |
220.31 |
|
|
57.6 |
% |
|
$ |
26 |
|
Florida |
0.1 |
|
|
50 |
|
|
390.03 |
|
|
30 |
|
|
236.50 |
|
|
60.6 |
|
|
20 |
|
|||||
Michigan |
— |
|
|
10 |
|
|
521.67 |
|
|
6 |
|
|
308.37 |
|
|
59.1 |
|
|
4 |
|
|||||
Ohio |
0.1 |
|
|
24 |
|
|
754.67 |
|
|
19 |
|
|
565.69 |
|
|
75.0 |
|
|
5 |
|
|||||
Texas |
0.3 |
|
|
167 |
|
|
379.29 |
|
|
117 |
|
|
267.12 |
|
|
70.4 |
|
|
50 |
|
|||||
Washington |
0.1 |
|
|
51 |
|
|
803.11 |
|
|
35 |
|
|
548.48 |
|
|
68.3 |
|
|
16 |
|
|||||
Other (1) |
0.1 |
|
|
47 |
|
|
527.41 |
|
|
33 |
|
|
376.04 |
|
|
71.3 |
|
|
14 |
|
|||||
|
0.9 |
|
|
$ |
410 |
|
|
$ |
440.20 |
|
|
$ |
275 |
|
|
$ |
295.71 |
|
|
67.2 |
% |
|
$ |
135 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Three Months Ended June 30, 2018 |
||||||||||||||||||||||||
California |
0.2 |
|
|
$ |
73 |
|
|
$ |
426.16 |
|
|
$ |
21 |
|
|
$ |
117.92 |
|
|
27.7 |
% |
|
$ |
52 |
|
Florida |
0.1 |
|
|
100 |
|
|
698.31 |
|
|
38 |
|
|
269.86 |
|
|
38.6 |
|
|
62 |
|
|||||
Michigan |
— |
|
|
15 |
|
|
288.67 |
|
|
7 |
|
|
146.97 |
|
|
50.9 |
|
|
8 |
|
|||||
New Mexico |
— |
|
|
31 |
|
|
418.82 |
|
|
18 |
|
|
247.06 |
|
|
59.0 |
|
|
13 |
|
|||||
Ohio |
— |
|
|
31 |
|
|
518.64 |
|
|
23 |
|
|
381.46 |
|
|
73.6 |
|
|
8 |
|
|||||
Texas |
0.7 |
|
|
222 |
|
|
330.12 |
|
|
160 |
|
|
238.72 |
|
|
72.3 |
|
|
62 |
|
|||||
Washington |
0.2 |
|
|
56 |
|
|
787.80 |
|
|
41 |
|
|
572.48 |
|
|
72.7 |
|
|
15 |
|
|||||
Other (2) |
— |
|
|
20 |
|
|
|
NM |
|
|
6 |
|
|
|
NM |
|
|
NM |
|
|
14 |
|
|||
|
1.2 |
|
|
$ |
548 |
|
|
$ |
440.93 |
|
|
$ |
314 |
|
|
$ |
253.04 |
|
|
57.4 |
% |
|
$ |
234 |
|
|
Six Months Ended June 30, 2019 |
||||||||||||||||||||||||
California |
0.3 |
|
|
$ |
117 |
|
|
$ |
361.73 |
|
|
$ |
68 |
|
|
$ |
210.71 |
|
|
58.2 |
% |
|
$ |
49 |
|
Florida |
0.3 |
|
|
111 |
|
|
406.52 |
|
|
56 |
|
|
205.17 |
|
|
50.5 |
|
|
55 |
|
|||||
Michigan |
— |
|
|
20 |
|
|
492.23 |
|
|
11 |
|
|
255.98 |
|
|
52.0 |
|
|
9 |
|
|||||
Ohio |
0.1 |
|
|
54 |
|
|
805.96 |
|
|
34 |
|
|
505.10 |
|
|
62.7 |
|
|
20 |
|
|||||
Texas |
0.9 |
|
|
315 |
|
|
341.18 |
|
|
226 |
|
|
245.82 |
|
|
72.0 |
|
|
89 |
|
|||||
Washington |
0.1 |
|
|
98 |
|
|
756.26 |
|
|
64 |
|
|
490.84 |
|
|
64.9 |
|
|
34 |
|
|||||
Other (1) |
0.2 |
|
|
92 |
|
|
501.13 |
|
|
63 |
|
|
344.61 |
|
|
68.8 |
|
|
29 |
|
|||||
|
1.9 |
|
|
$ |
807 |
|
|
$ |
415.94 |
|
|
$ |
522 |
|
|
$ |
269.14 |
|
|
64.7 |
% |
|
$ |
285 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Six Months Ended June 30, 2018 |
||||||||||||||||||||||||
California |
0.4 |
|
|
$ |
122 |
|
|
$ |
334.47 |
|
|
$ |
52 |
|
|
$ |
141.73 |
|
|
42.4 |
% |
|
$ |
70 |
|
Florida |
0.3 |
|
|
145 |
|
|
468.36 |
|
|
22 |
|
|
73.13 |
|
|
15.6 |
|
|
123 |
|
|||||
Michigan |
0.1 |
|
|
28 |
|
|
254.69 |
|
|
16 |
|
|
145.49 |
|
|
57.1 |
|
|
12 |
|
|||||
New Mexico |
0.1 |
|
|
65 |
|
|
429.19 |
|
|
37 |
|
|
246.77 |
|
|
57.5 |
|
|
28 |
|
|||||
Ohio |
0.1 |
|
|
57 |
|
|
458.48 |
|
|
40 |
|
|
319.53 |
|
|
69.7 |
|
|
17 |
|
|||||
Texas |
1.4 |
|
|
451 |
|
|
318.93 |
|
|
306 |
|
|
216.83 |
|
|
68.0 |
|
|
145 |
|
|||||
Washington |
0.2 |
|
|
95 |
|
|
653.89 |
|
|
71 |
|
|
486.90 |
|
|
74.5 |
|
|
24 |
|
|||||
Other (2) |
— |
|
|
15 |
|
|
|
NM |
|
|
(12 |
) |
|
|
NM |
|
|
NM |
|
|
27 |
|
|||
|
2.6 |
|
|
$ |
978 |
|
|
$ |
373.67 |
|
|
$ |
532 |
|
|
$ |
203.34 |
|
|
54.4 |
% |
|
$ |
446 |
|
| __________________ | |
(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 June 30, 2019 |
||||||||||||||||||||||||
California |
1.8 |
|
|
$ |
560 |
|
|
$ |
312.21 |
|
|
$ |
450 |
|
|
$ |
250.87 |
|
|
80.4 |
% |
|
$ |
110 |
|
Florida |
0.4 |
|
|
176 |
|
|
408.99 |
|
|
150 |
|
|
350.47 |
|
|
85.7 |
|
|
26 |
|
|||||
Illinois |
0.6 |
|
|
242 |
|
|
364.15 |
|
|
215 |
|
|
323.96 |
|
|
89.0 |
|
|
27 |
|
|||||
Michigan |
1.1 |
|
|
413 |
|
|
378.86 |
|
|
338 |
|
|
310.05 |
|
|
81.8 |
|
|
75 |
|
|||||
Ohio |
1.0 |
|
|
654 |
|
|
703.09 |
|
|
572 |
|
|
613.85 |
|
|
87.3 |
|
|
82 |
|
|||||
Puerto Rico |
0.6 |
|
|
122 |
|
|
198.95 |
|
|
109 |
|
|
177.56 |
|
|
89.2 |
|
|
13 |
|
|||||
South Carolina |
0.4 |
|
|
140 |
|
|
362.24 |
|
|
125 |
|
|
322.55 |
|
|
89.0 |
|
|
15 |
|
|||||
Texas |
1.0 |
|
|
765 |
|
|
700.15 |
|
|
668 |
|
|
611.53 |
|
|
87.3 |
|
|
97 |
|
|||||
Washington |
2.5 |
|
|
662 |
|
|
271.96 |
|
|
570 |
|
|
234.05 |
|
|
86.1 |
|
|
92 |
|
|||||
Other (1) (2) |
0.8 |
|
|
315 |
|
|
410.27 |
|
|
269 |
|
|
350.76 |
|
|
85.5 |
|
|
46 |
|
|||||
|
10.2 |
|
|
$ |
4,049 |
|
|
$ |
396.87 |
|
|
$ |
3,466 |
|
|
$ |
339.72 |
|
|
85.6 |
% |
|
$ |
583 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Three Months Ended June 30, 2018 |
||||||||||||||||||||||||
California |
2.0 |
|
|
$ |
590 |
|
|
$ |
301.73 |
|
|
$ |
462 |
|
|
$ |
236.04 |
|
|
78.2 |
% |
|
$ |
128 |
|
Florida |
1.3 |
|
|
477 |
|
|
394.38 |
|
|
400 |
|
|
331.13 |
|
|
84.0 |
|
|
77 |
|
|||||
Illinois |
0.6 |
|
|
203 |
|
|
311.60 |
|
|
170 |
|
|
261.59 |
|
|
84.0 |
|
|
33 |
|
|||||
Michigan |
1.2 |
|
|
403 |
|
|
340.08 |
|
|
338 |
|
|
285.78 |
|
|
84.0 |
|
|
65 |
|
|||||
New Mexico (2) |
0.7 |
|
|
344 |
|
|
464.90 |
|
|
308 |
|
|
416.99 |
|
|
89.7 |
|
|
36 |
|
|||||
Ohio |
1.0 |
|
|
566 |
|
|
567.96 |
|
|
505 |
|
|
506.66 |
|
|
89.2 |
|
|
61 |
|
|||||
Puerto Rico |
0.9 |
|
|
184 |
|
|
188.26 |
|
|
165 |
|
|
168.20 |
|
|
89.3 |
|
|
19 |
|
|||||
South Carolina |
0.4 |
|
|
123 |
|
|
350.22 |
|
|
107 |
|
|
304.20 |
|
|
86.9 |
|
|
16 |
|
|||||
Texas |
1.4 |
|
|
798 |
|
|
585.50 |
|
|
670 |
|
|
492.23 |
|
|
84.1 |
|
|
128 |
|
|||||
Washington |
2.4 |
|
|
627 |
|
|
268.84 |
|
|
567 |
|
|
242.80 |
|
|
90.3 |
|
|
60 |
|
|||||
Other (1) |
0.5 |
|
|
199 |
|
|
360.90 |
|
|
158 |
|
|
285.65 |
|
|
79.1 |
|
|
41 |
|
|||||
|
12.4 |
|
|
$ |
4,514 |
|
|
$ |
366.57 |
|
|
$ |
3,850 |
|
|
$ |
312.68 |
|
|
85.3 |
% |
|
$ |
664 |
|
|
Six Months Ended June 30, 2019 |
||||||||||||||||||||||||
California |
3.6 |
|
|
$ |
1,115 |
|
|
$ |
307.88 |
|
|
$ |
931 |
|
|
$ |
257.10 |
|
|
83.5 |
% |
|
$ |
184 |
|
Florida |
1.0 |
|
|
399 |
|
|
401.69 |
|
|
303 |
|
|
305.23 |
|
|
76.0 |
|
|
96 |
|
|||||
Illinois |
1.3 |
|
|
469 |
|
|
356.16 |
|
|
400 |
|
|
303.50 |
|
|
85.2 |
|
|
69 |
|
|||||
Michigan |
2.2 |
|
|
818 |
|
|
371.91 |
|
|
669 |
|
|
304.10 |
|
|
81.8 |
|
|
149 |
|
|||||
Ohio |
1.9 |
|
|
1,274 |
|
|
684.77 |
|
|
1,124 |
|
|
604.12 |
|
|
88.2 |
|
|
150 |
|
|||||
Puerto Rico |
1.2 |
|
|
224 |
|
|
181.91 |
|
|
199 |
|
|
161.40 |
|
|
88.7 |
|
|
25 |
|
|||||
South Carolina |
0.8 |
|
|
276 |
|
|
362.68 |
|
|
240 |
|
|
315.84 |
|
|
87.1 |
|
|
36 |
|
|||||
Texas |
2.2 |
|
|
1,512 |
|
|
675.34 |
|
|
1,309 |
|
|
584.90 |
|
|
86.6 |
|
|
203 |
|
|||||
Washington |
4.9 |
|
|
1,323 |
|
|
271.34 |
|
|
1,185 |
|
|
242.96 |
|
|
89.5 |
|
|
138 |
|
|||||
Other |
1.5 |
|
|
591 |
|
|
397.61 |
|
|
477 |
|
|
320.90 |
|
|
80.7 |
|
|
114 |
|
|||||
|
20.6 |
|
|
$ |
8,001 |
|
|
$ |
388.66 |
|
|
$ |
6,837 |
|
|
$ |
332.11 |
|
|
85.5 |
% |
|
$ |
1,164 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Six Months Ended June 30, 2018 |
||||||||||||||||||||||||
California |
4.0 |
|
|
$ |
1,133 |
|
|
$ |
286.07 |
|
|
$ |
905 |
|
|
$ |
228.44 |
|
|
79.9 |
% |
|
$ |
228 |
|
Florida |
2.5 |
|
|
904 |
|
|
367.18 |
|
|
729 |
|
|
296.29 |
|
|
80.7 |
|
|
175 |
|
|||||
Illinois |
1.1 |
|
|
344 |
|
|
305.94 |
|
|
292 |
|
|
259.87 |
|
|
84.9 |
|
|
52 |
|
|||||
Michigan |
2.4 |
|
|
792 |
|
|
335.59 |
|
|
678 |
|
|
287.23 |
|
|
85.6 |
|
|
114 |
|
|||||
New Mexico |
1.5 |
|
|
697 |
|
|
464.11 |
|
|
637 |
|
|
424.58 |
|
|
91.5 |
|
|
60 |
|
|||||
Ohio |
2.0 |
|
|
1,143 |
|
|
566.77 |
|
|
982 |
|
|
486.79 |
|
|
85.9 |
|
|
161 |
|
|||||
Puerto Rico |
1.9 |
|
|
370 |
|
|
190.68 |
|
|
339 |
|
|
174.74 |
|
|
91.6 |
|
|
31 |
|
|||||
South Carolina |
0.7 |
|
|
245 |
|
|
349.15 |
|
|
211 |
|
|
300.87 |
|
|
86.2 |
|
|
34 |
|
|||||
Texas |
2.8 |
|
|
1,589 |
|
|
567.95 |
|
|
1,335 |
|
|
477.43 |
|
|
84.1 |
|
|
254 |
|
|||||
Washington |
4.7 |
|
|
1,250 |
|
|
267.01 |
|
|
1,171 |
|
|
250.05 |
|
|
93.6 |
|
|
79 |
|
|||||
Other |
1.1 |
|
|
370 |
|
|
333.35 |
|
|
293 |
|
|
263.24 |
|
|
79.0 |
|
|
77 |
|
|||||
|
24.7 |
|
|
$ |
8,837 |
|
|
$ |
358.40 |
|
|
$ |
7,572 |
|
|
$ |
307.11 |
|
|
85.7 |
% |
|
$ |
1,265 |
|
| __________________ | |
(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 June 30, |
||||||||||||||||||||
|
2019 |
|
2018 |
||||||||||||||||||
|
Amount |
|
PMPM |
|
% of
|
|
Amount |
|
PMPM |
|
% of
|
||||||||||
Fee for service |
$ |
2,594 |
|
|
$ |
254.36 |
|
|
74.8 |
% |
|
$ |
2,861 |
|
|
$ |
232.40 |
|
|
74.4 |
% |
Pharmacy |
429 |
|
|
42.06 |
|
|
12.4 |
|
|
567 |
|
|
46.05 |
|
|
14.7 |
|
||||
Capitation |
288 |
|
|
28.17 |
|
|
8.3 |
|
|
282 |
|
|
22.89 |
|
|
7.3 |
|
||||
Other |
155 |
|
|
15.13 |
|
|
4.5 |
|
|
140 |
|
|
11.34 |
|
|
3.6 |
|
||||
|
$ |
3,466 |
|
|
$ |
339.72 |
|
|
100.0 |
% |
|
$ |
3,850 |
|
|
$ |
312.68 |
|
|
100.0 |
% |
|
Six Months Ended June 30, |
||||||||||||||||||||
|
2019 |
|
2018 |
||||||||||||||||||
|
Amount |
|
PMPM |
|
% of Total |
|
Amount |
|
PMPM |
|
% of Total |
||||||||||
Fee for service |
$ |
5,108 |
|
|
$ |
248.18 |
|
|
74.7 |
% |
|
$ |
5,606 |
|
|
$ |
227.38 |
|
|
74.1 |
% |
Pharmacy |
842 |
|
|
40.88 |
|
|
12.3 |
|
|
1,150 |
|
|
46.66 |
|
|
15.2 |
|
||||
Capitation |
573 |
|
|
27.81 |
|
|
8.4 |
|
|
594 |
|
|
24.09 |
|
|
7.8 |
|
||||
Other |
314 |
|
|
15.24 |
|
|
4.6 |
|
|
222 |
|
|
8.98 |
|
|
2.9 |
|
||||
|
$ |
6,837 |
|
|
$ |
332.11 |
|
|
100.0 |
% |
|
$ |
7,572 |
|
|
$ |
307.11 |
|
|
100.0 |
% |
The following table provides details of the Company’s medical claims and benefits payable as of the dates indicated:
|
June 30, |
|
Dec. 31, |
||||
|
2019 |
|
2018 |
||||
Fee-for-service claims incurred but not paid (IBNP) |
$ |
1,346 |
|
|
$ |
1,562 |
|
Pharmacy payable |
117 |
|
|
115 |
|
||
Capitation payable |
63 |
|
|
52 |
|
||
Other (1) |
241 |
|
|
232 |
|
||
|
$ |
1,767 |
|
|
$ |
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 June 30, 2019 and December 31, 2018, the Company had recorded non-risk provider payables of approximately $112 million and $107 million, respectively. |
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:
|
Six Months Ended |
|
Year Ended |
||||||||
|
June 30, |
|
Dec. 31,
|
||||||||
|
2019 |
|
2018 |
|
|||||||
Medical claims and benefits payable, beginning balance |
$ |
1,961 |
|
|
$ |
2,192 |
|
|
$ |
2,192 |
|
Components of medical care costs related to: |
|
|
|
|
|
||||||
Current period |
7,069 |
|
|
7,870 |
|
|
15,478 |
|
|||
Prior period (1) |
(232 |
) |
|
(298 |
) |
|
(341 |
) |
|||
Total medical care costs |
6,837 |
|
|
7,572 |
|
|
15,137 |
|
|||
Change in non-risk and other provider payables |
4 |
|
|
56 |
|
|
13 |
|
|||
Payments for medical care costs related to: |
|
|
|
|
|
||||||
Current period |
5,585 |
|
|
6,248 |
|
|
13,671 |
|
|||
Prior period |
1,450 |
|
|
1,652 |
|
|
1,710 |
|
|||
Total paid |
7,035 |
|
|
7,900 |
|
|
15,381 |
|
|||
Medical claims and benefits payable, ending balance |
$ |
1,767 |
|
|
$ |
1,920 |
|
|
$ |
1,961 |
|
|
|
|
|
|
|
||||||
Days in claims payable, fee for service (2) |
48 |
|
|
49 |
|
|
53 |
|
|||
(1) |
The June 30, 2018, amount includes the 2018 benefit of the 2017 Marketplace CSR reimbursement of $76 million. December 31, 2018, includes 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 $35 million, $33 million and $43 million, as of June 30, 2019, June 30, 2018, and December 31, 2018, 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 June 30, |
|
Six Months Ended June 30, |
||||||||||||||||||||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||||||||||||||||||
|
Amount |
|
Per
|
|
Amount |
|
Per
|
|
Amount |
|
Per
|
|
Amount |
|
Per
|
||||||||||||||||
Restructuring costs |
$ |
(2 |
) |
|
$ |
(0.02 |
) |
|
$ |
(8 |
) |
|
$ |
(0.10 |
) |
|
$ |
(5 |
) |
|
$ |
(0.05 |
) |
|
(33 |
) |
|
(0.39 |
) |
||
Gain (loss) on debt extinguishment |
14 |
|
|
0.17 |
|
|
(5 |
) |
|
(0.06 |
) |
|
17 |
|
|
0.21 |
|
|
(15 |
) |
|
(0.21 |
) |
||||||||
|
$ |
12 |
|
|
$ |
0.15 |
|
|
$ |
(13 |
) |
|
$ |
(0.16 |
) |
|
$ |
12 |
|
|
$ |
0.16 |
|
|
$ |
(48 |
) |
|
$ |
(0.60 |
) |
| ______________________ | |
(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
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 |
|
Six Months Ended |
||||||||||||
|
June 30, |
|
June 30, |
||||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
Net income |
$ |
196 |
|
|
$ |
202 |
|
|
$ |
394 |
|
|
$ |
309 |
|
Adjustments: |
|
|
|
|
|
|
|
||||||||
Depreciation, and amortization of intangible assets and capitalized software |
22 |
|
|
33 |
|
|
47 |
|
|
67 |
|
||||
Interest expense |
22 |
|
|
32 |
|
|
45 |
|
|
65 |
|
||||
Income tax expense |
61 |
|
|
103 |
|
|
123 |
|
|
175 |
|
||||
EBITDA |
$ |
301 |
|
|
$ |
370 |
|
|
$ |
609 |
|
|
$ |
616 |
|
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.
NON-GAAP FINANCIAL MEASURES (CONTINUED)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||||||||||||||||||
2019 |
|
2018 |
|
2019 |
|
2018 |
|||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||
|
Amount |
|
Per
|
|
Amount |
|
Per
|
|
Amount |
|
Per
|
|
Amount |
|
Per
|
||||||||||||||||
Net income |
$ |
196 |
|
|
$ |
3.06 |
|
|
$ |
202 |
|
|
$ |
3.02 |
|
|
$ |
394 |
|
|
$ |
6.04 |
|
|
$ |
309 |
|
|
$ |
4.68 |
|
Adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Amortization of intangible assets |
4 |
|
|
0.07 |
|
|
5 |
|
|
0.08 |
|
|
9 |
|
|
0.14 |
|
|
10 |
|
|
0.16 |
|
||||||||
Income tax effect (1) |
(1 |
) |
|
(0.02 |
) |
|
(1 |
) |
|
(0.02 |
) |
|
(2 |
) |
|
(0.03 |
) |
|
(2 |
) |
|
(0.04 |
) |
||||||||
Amortization of intangible assets, net of tax effect |
3 |
|
|
0.05 |
|
|
4 |
|
|
0.06 |
|
|
7 |
|
|
0.11 |
|
|
8 |
|
|
0.12 |
|
||||||||
Adjusted net income |
$ |
199 |
|
|
$ |
3.11 |
|
|
$ |
206 |
|
|
$ |
3.08 |
|
|
$ |
401 |
|
|
$ |
6.15 |
|
|
$ |
317 |
|
|
$ |
4.80 |
|
| ________________________ | |
(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.
2019 REVISED GUIDANCE
Reconciliation of Non-GAAP Financial Measures
|
Low End |
|
High End |
||||
|
(In millions) |
||||||
Net income |
$ |
725 |
|
|
$ |
740 |
|
Adjustments: |
|
|
|
||||
Depreciation, and amortization of intangible assets and capitalized software |
90 |
|
|
90 |
|
||
Interest expense |
90 |
|
|
90 |
|
||
Income tax expense |
230 |
|
|
240 |
|
||
EBITDA |
$ |
1,135 |
|
|
$ |
1,160 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20190730005967/en/
Investor Contact: Julie Trudell, [email protected], 562-912-6720
Media Contact: Laura Murray, [email protected], 562-506-9208
Source: Molina Healthcare, Inc.