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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Molina Healthcare Inc | NYSE:MOH | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 342.10 | 0 | 01:00:00 |
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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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13-4204626
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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200 Oceangate, Suite 100
Long Beach, California
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90802
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Three Months Ended March 31,
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||||||
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2016
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2015
|
||||
|
(In millions, except per-share data)
(Unaudited)
|
||||||
Revenue:
|
|
|
|
||||
Premium revenue
|
$
|
3,995
|
|
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$
|
2,971
|
|
Service revenue
|
140
|
|
|
52
|
|
||
Premium tax revenue
|
109
|
|
|
95
|
|
||
Health insurer fee revenue
|
90
|
|
|
48
|
|
||
Investment income
|
8
|
|
|
3
|
|
||
Other revenue
|
1
|
|
|
2
|
|
||
Total revenue
|
4,343
|
|
|
3,171
|
|
||
Operating expenses:
|
|
|
|
||||
Medical care costs
|
3,588
|
|
|
2,636
|
|
||
Cost of service revenue
|
127
|
|
|
36
|
|
||
General and administrative expenses
|
340
|
|
|
256
|
|
||
Premium tax expenses
|
109
|
|
|
95
|
|
||
Health insurer fee expenses
|
58
|
|
|
41
|
|
||
Depreciation and amortization
|
32
|
|
|
25
|
|
||
Total operating expenses
|
4,254
|
|
|
3,089
|
|
||
Operating income
|
89
|
|
|
82
|
|
||
Interest expense
|
25
|
|
|
15
|
|
||
Income before income tax expense
|
64
|
|
|
67
|
|
||
Income tax expense
|
40
|
|
|
39
|
|
||
Net income
|
$
|
24
|
|
|
$
|
28
|
|
|
|
|
|
||||
Net income per share:
|
|
|
|
||||
Basic
|
$
|
0.44
|
|
|
$
|
0.58
|
|
Diluted
|
$
|
0.43
|
|
|
$
|
0.56
|
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(Amounts in millions)
(Unaudited)
|
||||||
Net income
|
$
|
24
|
|
|
$
|
28
|
|
Other comprehensive income:
|
|
|
|
||||
Unrealized investment gain
|
9
|
|
|
2
|
|
||
Less: effect of income taxes
|
3
|
|
|
1
|
|
||
Other comprehensive income, net of tax
|
6
|
|
|
1
|
|
||
Comprehensive income
|
$
|
30
|
|
|
$
|
29
|
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(Amounts in millions)
(Unaudited) |
||||||
Operating activities:
|
|
|
|
||||
Net income
|
$
|
24
|
|
|
$
|
28
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
44
|
|
|
33
|
|
||
Deferred income taxes
|
30
|
|
|
1
|
|
||
Share-based compensation
|
7
|
|
|
6
|
|
||
Amortization of convertible senior notes and lease financing obligations
|
8
|
|
|
7
|
|
||
Other, net
|
6
|
|
|
3
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Receivables
|
(266
|
)
|
|
105
|
|
||
Prepaid expenses and other assets
|
(202
|
)
|
|
(137
|
)
|
||
Medical claims and benefits payable
|
255
|
|
|
248
|
|
||
Amounts due government agencies
|
181
|
|
|
95
|
|
||
Accounts payable and accrued liabilities
|
205
|
|
|
189
|
|
||
Deferred revenue
|
(129
|
)
|
|
(26
|
)
|
||
Income taxes
|
(24
|
)
|
|
2
|
|
||
Net cash provided by operating activities
|
139
|
|
|
554
|
|
||
Investing activities:
|
|
|
|
||||
Purchases of investments
|
(611
|
)
|
|
(438
|
)
|
||
Proceeds from sales and maturities of investments
|
348
|
|
|
255
|
|
||
Purchases of property, equipment and capitalized software
|
(46
|
)
|
|
(25
|
)
|
||
Increase in restricted investments
|
(4
|
)
|
|
(5
|
)
|
||
Net cash paid in business combinations
|
(2
|
)
|
|
(8
|
)
|
||
Other, net
|
1
|
|
|
(7
|
)
|
||
Net cash used in investing activities
|
(314
|
)
|
|
(228
|
)
|
||
Financing activities:
|
|
|
|
||||
Proceeds from employee stock plans
|
—
|
|
|
1
|
|
||
Other, net
|
2
|
|
|
4
|
|
||
Net cash provided by financing activities
|
2
|
|
|
5
|
|
||
Net (decrease) increase in cash and cash equivalents
|
(173
|
)
|
|
331
|
|
||
Cash and cash equivalents at beginning of period
|
2,329
|
|
|
1,539
|
|
||
Cash and cash equivalents at end of period
|
$
|
2,156
|
|
|
$
|
1,870
|
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(Amounts in millions)
(Unaudited) |
||||||
Supplemental cash flow information:
|
|
|
|
||||
|
|
|
|
||||
Schedule of non-cash investing and financing activities:
|
|
|
|
||||
Common stock used for share-based compensation
|
$
|
(7
|
)
|
|
$
|
(9
|
)
|
|
|
|
|
||||
Details of change in fair value of derivatives, net:
|
|
|
|
||||
Gain on 1.125% Call Option
|
$
|
3
|
|
|
$
|
145
|
|
Loss on 1.125% Conversion Option
|
(3
|
)
|
|
(145
|
)
|
||
Change in fair value of derivatives, net
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||||
Details of business combinations:
|
|
|
|
||||
Fair value of assets acquired
|
$
|
(134
|
)
|
|
$
|
—
|
|
Purchase price amounts accrued/received (paid)
|
30
|
|
|
(8
|
)
|
||
Reversal of amounts advanced to sellers in prior year
|
102
|
|
|
—
|
|
||
Net cash paid in business combinations
|
$
|
(2
|
)
|
|
$
|
(8
|
)
|
•
|
Permanent risk adjustment program: Under this permanent program, our health plans' composite risk scores are compared to the overall average risk score for the relevant state and market pool. Generally, our health plans will pay into the pool if their composite risk scores are below the average risk score, and will receive funds from the pool if their composite risk scores are above the average risk score. We estimate our ultimate premium based on insurance policy year-to-date experience, and recognize estimated premiums relating to the risk adjustment program as an adjustment to premium revenue in our consolidated statements of income. To better estimate amounts to be accrued, we utilize third party sources that attempt to estimate the overall average risk score for the relevant state and market pools. In the first quarter of 2016, we recorded an additional liability of approximately
$20 million
related to 2015 based upon new information primarily obtained from third party sources.
|
•
|
Transitional reinsurance program: This program is designed to provide reimbursement to insurers for high cost members. Our health plans pay an annual contribution on a per-member basis, and are eligible for recoveries if claims for individual members exceed a specified threshold, up to a maximum amount. This three-year program will end on December 31, 2016. We recognize the assessments to fund the transitional reinsurance program as a reduction to premium revenue in our consolidated statements of income. We recognize recoveries under the reinsurance program as a reduction to medical care costs in our consolidated statements of income.
|
•
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Temporary risk corridor program: This program is intended to limit gains and losses of insurers by comparing allowable costs to a target amount as defined by the U.S. Department of Health and Human Services (HHS). Variances from the target amount exceeding certain thresholds may result in amounts due to or receivables due from HHS. This three-year program will end on December 31, 2016. Due to uncertainties as to the amount of federal funding available to support the risk corridor program, we do not recognize amounts receivable under this program. All liabilities are recognized as incurred. We estimate our ultimate premium based on insurance policy year-to-date experience, and recognize estimated premiums relating to the risk corridor program as an adjustment to premium revenue in our consolidated statements of income.
|
|
March 31,
2016 |
|
December 31,
2015 |
||||
|
(In millions)
|
||||||
Risk adjustment
|
$
|
(301
|
)
|
|
$
|
(214
|
)
|
Reinsurance
|
47
|
|
|
36
|
|
||
Risk corridor
|
(15
|
)
|
|
(10
|
)
|
||
Minimum MLR
|
(11
|
)
|
|
(3
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Maximum available quality incentive premium - current period
|
$
|
40
|
|
|
$
|
30
|
|
Amount of quality incentive premium revenue recognized in current period:
|
|
|
|
||||
Earned current period
|
$
|
18
|
|
|
$
|
10
|
|
Earned prior periods
|
5
|
|
|
—
|
|
||
Total
|
$
|
23
|
|
|
$
|
10
|
|
|
|
|
|
||||
Quality incentive premium revenue recognized as a percentage of total premium revenue
|
0.6
|
%
|
|
0.3
|
%
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In millions, except net income per share)
|
||||||
Numerator:
|
|
|
|
||||
Net income
|
$
|
24
|
|
|
$
|
28
|
|
Denominator:
|
|
|
|
||||
Denominator for basic net income per share
|
55
|
|
|
49
|
|
||
Effect of dilutive securities:
|
|
|
|
||||
Share-based compensation
|
1
|
|
|
—
|
|
||
1.125% Warrants (1)
|
1
|
|
|
1
|
|
||
Denominator for diluted net income per share
|
57
|
|
|
50
|
|
||
Net income per share: (2)
|
|
|
|
||||
Basic
|
$
|
0.44
|
|
|
$
|
0.58
|
|
Diluted
|
$
|
0.43
|
|
|
$
|
0.56
|
|
(1)
|
For more information regarding the 1.125% Warrants, refer to Note
11
, "
Derivatives
."
|
(2)
|
Source data for calculations in thousands.
|
|
Fair Value
|
|
Life
|
||
|
(In millions)
|
|
(Years)
|
||
Intangible asset type:
|
|
|
|
||
Contract rights - member list
|
$
|
28
|
|
|
5
|
Provider network
|
6
|
|
|
10
|
|
|
$
|
34
|
|
|
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
(In millions)
|
||||||||||||||
Corporate debt securities
|
$
|
1,425
|
|
|
$
|
—
|
|
|
$
|
1,425
|
|
|
$
|
—
|
|
Government-sponsored enterprise securities (GSEs)
|
214
|
|
|
214
|
|
|
—
|
|
|
—
|
|
||||
Municipal securities
|
165
|
|
|
—
|
|
|
165
|
|
|
—
|
|
||||
U.S. treasury notes
|
114
|
|
|
114
|
|
|
—
|
|
|
—
|
|
||||
Certificates of deposit
|
78
|
|
|
—
|
|
|
78
|
|
|
—
|
|
||||
Asset-backed securities
|
74
|
|
|
—
|
|
|
74
|
|
|
—
|
|
||||
Subtotal - current investments
|
2,070
|
|
|
328
|
|
|
1,742
|
|
|
—
|
|
||||
1.125% Call Option derivative asset
|
377
|
|
|
—
|
|
|
—
|
|
|
377
|
|
||||
Total assets measured at fair value on a recurring basis
|
$
|
2,447
|
|
|
$
|
328
|
|
|
$
|
1,742
|
|
|
$
|
377
|
|
|
|
|
|
|
|
|
|
||||||||
1.125% Conversion Option derivative liability
|
$
|
377
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
377
|
|
Total liabilities measured at fair value on a recurring basis
|
$
|
377
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
377
|
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
(In millions)
|
||||||||||||||
Corporate debt securities
|
$
|
1,184
|
|
|
$
|
—
|
|
|
$
|
1,184
|
|
|
$
|
—
|
|
GSEs
|
211
|
|
|
211
|
|
|
—
|
|
|
—
|
|
||||
Municipal securities
|
185
|
|
|
—
|
|
|
185
|
|
|
—
|
|
||||
U.S. treasury notes
|
78
|
|
|
78
|
|
|
—
|
|
|
—
|
|
||||
Certificates of deposit
|
80
|
|
|
—
|
|
|
80
|
|
|
—
|
|
||||
Asset-backed securities
|
63
|
|
|
—
|
|
|
63
|
|
|
—
|
|
||||
Subtotal - current investments
|
1,801
|
|
|
289
|
|
|
1,512
|
|
|
—
|
|
||||
1.125% Call Option derivative asset
|
374
|
|
|
—
|
|
|
—
|
|
|
374
|
|
||||
Total assets measured at fair value on a recurring basis
|
$
|
2,175
|
|
|
$
|
289
|
|
|
$
|
1,512
|
|
|
$
|
374
|
|
|
|
|
|
|
|
|
|
||||||||
1.125% Conversion Option derivative liability
|
$
|
374
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
374
|
|
Total liabilities measured at fair value on a recurring basis
|
$
|
374
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
374
|
|
|
March 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
Carrying
Value
|
|
Fair Value
|
|
Carrying
Value
|
|
Fair Value
|
||||||||
|
(In millions)
|
||||||||||||||
5.375% Notes
|
$
|
689
|
|
|
$
|
721
|
|
|
$
|
689
|
|
|
$
|
700
|
|
1.125% Convertible Notes
|
454
|
|
|
914
|
|
|
448
|
|
|
865
|
|
||||
1.625% Convertible Notes
|
276
|
|
|
379
|
|
|
273
|
|
|
365
|
|
||||
|
$
|
1,419
|
|
|
$
|
2,014
|
|
|
$
|
1,410
|
|
|
$
|
1,930
|
|
|
March 31, 2016
|
||||||||||||||
|
Amortized
|
|
Gross
Unrealized
|
|
Estimated
Fair
|
||||||||||
|
Cost
|
|
Gains
|
|
Losses
|
|
Value
|
||||||||
|
(In millions)
|
||||||||||||||
Corporate debt securities
|
$
|
1,424
|
|
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
1,425
|
|
GSEs
|
214
|
|
|
—
|
|
|
—
|
|
|
214
|
|
||||
Municipal securities
|
164
|
|
|
1
|
|
|
—
|
|
|
165
|
|
||||
U.S. treasury notes
|
114
|
|
|
—
|
|
|
—
|
|
|
114
|
|
||||
Certificates of deposit
|
78
|
|
|
—
|
|
|
—
|
|
|
78
|
|
||||
Asset-backed securities
|
74
|
|
|
—
|
|
|
—
|
|
|
74
|
|
||||
|
$
|
2,068
|
|
|
$
|
4
|
|
|
$
|
2
|
|
|
$
|
2,070
|
|
|
December 31, 2015
|
||||||||||||||
|
Amortized
|
|
Gross
Unrealized
|
|
Estimated
Fair
|
||||||||||
|
Cost
|
|
Gains
|
|
Losses
|
|
Value
|
||||||||
|
(In millions)
|
||||||||||||||
Corporate debt securities
|
$
|
1,189
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
1,184
|
|
GSEs
|
212
|
|
|
—
|
|
|
1
|
|
|
211
|
|
||||
Municipal securities
|
186
|
|
|
—
|
|
|
1
|
|
|
185
|
|
||||
U.S. treasury notes
|
78
|
|
|
—
|
|
|
—
|
|
|
78
|
|
||||
Certificates of deposit
|
80
|
|
|
—
|
|
|
—
|
|
|
80
|
|
||||
Asset-backed securities
|
63
|
|
|
—
|
|
|
—
|
|
|
63
|
|
||||
|
$
|
1,808
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
1,801
|
|
|
Amortized Cost
|
|
Estimated
Fair Value
|
||||
|
(In millions)
|
||||||
Due in one year or less
|
$
|
1,109
|
|
|
$
|
1,109
|
|
Due after one year through five years
|
938
|
|
|
940
|
|
||
Due after five years through ten years
|
21
|
|
|
21
|
|
||
|
$
|
2,068
|
|
|
$
|
2,070
|
|
|
In a Continuous Loss Position
for Less than 12 Months
|
|
In a Continuous Loss Position
for 12 Months or More
|
||||||||||||||||||
|
Estimated
Fair
Value
|
|
Unrealized
Losses
|
|
Total
Number of
Positions
|
|
Estimated
Fair
Value
|
|
Unrealized
Losses
|
|
Total
Number of
Positions
|
||||||||||
|
(Dollars in millions)
|
||||||||||||||||||||
Corporate debt securities
|
$
|
825
|
|
|
$
|
4
|
|
|
588
|
|
|
$
|
119
|
|
|
$
|
1
|
|
|
87
|
|
GSEs
|
182
|
|
|
1
|
|
|
77
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Municipal securities
|
128
|
|
|
1
|
|
|
181
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
1,135
|
|
|
$
|
6
|
|
|
846
|
|
|
$
|
119
|
|
|
$
|
1
|
|
|
87
|
|
|
March 31,
2016 |
|
December 31,
2015 |
||||
|
(In millions)
|
||||||
California
|
$
|
121
|
|
|
$
|
104
|
|
Florida
|
62
|
|
|
22
|
|
||
Illinois
|
94
|
|
|
35
|
|
||
Michigan
|
58
|
|
|
39
|
|
||
New Mexico
|
73
|
|
|
51
|
|
||
Ohio
|
89
|
|
|
66
|
|
||
Puerto Rico (1)
|
54
|
|
|
33
|
|
||
South Carolina
|
10
|
|
|
6
|
|
||
Texas
|
77
|
|
|
56
|
|
||
Utah
|
28
|
|
|
18
|
|
||
Washington
|
69
|
|
|
53
|
|
||
Wisconsin
|
24
|
|
|
22
|
|
||
Direct delivery and other
|
9
|
|
|
6
|
|
||
Total Health Plans segment
|
768
|
|
|
511
|
|
||
Molina Medicaid Solutions segment
|
37
|
|
|
37
|
|
||
Other segment
|
58
|
|
|
49
|
|
||
|
$
|
863
|
|
|
$
|
597
|
|
|
March 31,
2016 |
|
December 31,
2015 |
||||
|
(In millions)
|
||||||
Florida
|
$
|
34
|
|
|
$
|
34
|
|
Illinois
|
3
|
|
|
—
|
|
||
Michigan
|
1
|
|
|
1
|
|
||
New Mexico
|
47
|
|
|
43
|
|
||
Ohio
|
12
|
|
|
12
|
|
||
Puerto Rico
|
10
|
|
|
10
|
|
||
Texas
|
4
|
|
|
4
|
|
||
Utah
|
4
|
|
|
4
|
|
||
Wisconsin
|
1
|
|
|
1
|
|
||
Total Health Plans segment
|
$
|
116
|
|
|
$
|
109
|
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||
|
(In millions)
|
||||||
Due in one year or less
|
$
|
111
|
|
|
$
|
111
|
|
Due after one year through five years
|
5
|
|
|
5
|
|
||
|
$
|
116
|
|
|
$
|
116
|
|
|
March 31,
2016 |
|
December 31,
2015 |
||||
|
(In millions)
|
||||||
Fee-for-service claims incurred but not paid (IBNP)
|
$
|
1,392
|
|
|
$
|
1,191
|
|
Pharmacy payable
|
111
|
|
|
88
|
|
||
Capitation payable
|
138
|
|
|
140
|
|
||
Other
|
299
|
|
|
266
|
|
||
|
$
|
1,940
|
|
|
$
|
1,685
|
|
|
Three Months Ended
March 31, 2016 |
|
Year Ended
December 31, 2015 |
||||
|
(Dollars in millions)
|
||||||
Medical claims and benefits payable, beginning balance
|
$
|
1,685
|
|
|
$
|
1,201
|
|
Components of medical care costs related to:
|
|
|
|
||||
Current period
|
3,755
|
|
|
11,935
|
|
||
Prior periods
|
(167
|
)
|
|
(141
|
)
|
||
Total medical care costs
|
3,588
|
|
|
11,794
|
|
||
|
|
|
|
||||
Change in non-risk provider payables
|
24
|
|
|
48
|
|
||
|
|
|
|
||||
Payments for medical care costs related to:
|
|
|
|
||||
Current period
|
2,241
|
|
|
10,448
|
|
||
Prior periods
|
1,116
|
|
|
910
|
|
||
Total paid
|
3,357
|
|
|
11,358
|
|
||
Medical claims and benefits payable, ending balance
|
$
|
1,940
|
|
|
$
|
1,685
|
|
Benefit from prior period as a percentage of:
|
|
|
|
||||
Balance at beginning of period
|
10.0
|
%
|
|
11.8
|
%
|
||
Premium revenue, trailing twelve months
|
1.2
|
%
|
|
1.1
|
%
|
||
Medical care costs, trailing twelve months
|
1.3
|
%
|
|
1.2
|
%
|
•
|
In the first quarter of 2016, our Marketplace enrollment across all health plans increased by approximately
425,000
members. Some of the states with significant increases included:
|
◦
|
California:
57,000
|
◦
|
Florida:
114,000
|
◦
|
Texas:
122,000
|
◦
|
Utah:
48,000
|
◦
|
Wisconsin:
39,000
|
•
|
Our Illinois health plan added over
100,000
new members under acquisitions of
three
Medicaid contracts during the first quarter of 2016. Because these new members may have different utilization patterns than our legacy members, the reserves are subject to more than the usual amount of uncertainty.
|
•
|
Our Florida health plan added approximately
100,000
new members under an acquisition in the fourth quarter of 2015. Because these new members may have different utilization patterns than our legacy members, the reserves are subject to more than the usual amount of uncertainty.
|
•
|
At our New Mexico health plan, we overpaid certain inpatient and outpatient facility claims. We adjusted our claims payment history to reflect the claims payment pattern that would have occurred without these overpayments. For this reason, the reserves are subject to more than the usual amount of uncertainty.
|
•
|
A new version of diagnostic codes was required for all claims with dates of service October 1, 2015, and later. As a result, payment was delayed or denied for a significant number of claims due to provider submission of claims with diagnostic codes that were no longer valid. Once providers were able to submit claims with the correct diagnostic codes, our actual costs were ultimately less than expected.
|
•
|
At our New Mexico health plan, we overstated the impact of several pending high-dollar claims, and our actual costs were ultimately less than expected.
|
•
|
At our Washington health plan, we overpaid certain outpatient facility claims in 2015 when the state converted to a new payment methodology. We did not include an estimate in the reserves for this potential recovery as of December 31, 2015.
|
|
Total
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
5.375% Notes
|
$
|
700
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
700
|
|
1.125% Convertible Notes
|
550
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
550
|
|
|
—
|
|
|||||||
1.625% Convertible Notes (1)
|
302
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
302
|
|
|||||||
Other
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
$
|
1,553
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
550
|
|
|
$
|
1,002
|
|
(1)
|
The 1.625% Notes have a contractual maturity date in 2044; however, on specified dates beginning in 2018 as described below, holders of the 1.625% Notes may require us to repurchase some or all of the 1.625% Notes, or we may redeem any or all of the 1.625% Notes.
|
|
Principal Balance
|
|
Unamortized Discount
|
|
Unamortized Issuance Costs
|
|
Net Carrying Amount
|
||||||||
|
(In millions)
|
||||||||||||||
March 31, 2016:
|
|
|
|
|
|
|
|
||||||||
5.375% Notes
|
$
|
700
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
689
|
|
1.125% Convertible Notes
|
550
|
|
|
89
|
|
|
7
|
|
|
454
|
|
||||
1.625% Convertible Notes
|
302
|
|
|
22
|
|
|
4
|
|
|
276
|
|
||||
Other
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
|
$
|
1,553
|
|
|
$
|
111
|
|
|
$
|
22
|
|
|
$
|
1,420
|
|
December 31, 2015:
|
|
|
|
|
|
|
|
||||||||
5.375% Notes
|
$
|
700
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
689
|
|
1.125% Convertible Notes
|
550
|
|
|
95
|
|
|
7
|
|
|
448
|
|
||||
1.625% Convertible Notes
|
302
|
|
|
25
|
|
|
4
|
|
|
273
|
|
||||
Other
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
|
$
|
1,553
|
|
|
$
|
120
|
|
|
$
|
22
|
|
|
$
|
1,411
|
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Interest cost recognized for the period relating to the:
|
|
|
|
||||
Contractual interest coupon rate
|
$
|
12
|
|
|
$
|
3
|
|
Amortization of the discount
|
7
|
|
|
7
|
|
||
|
$
|
19
|
|
|
$
|
10
|
|
•
|
during any calendar quarter (and only during such calendar quarter), if the last reported sale price of the common stock for at least
20
trading days (whether or not consecutive) during a period of
30
consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to
130%
of the conversion price on each applicable trading day;
|
•
|
during the
five
business day period immediately after any
five
consecutive trading day period (the measurement period) in which the trading price per $1,000 principal amount of 1.125% Notes for each trading day of the measurement period was less than
98%
of the product of the last reported sale price of our common stock and the conversion rate on each such trading day;
|
•
|
upon the occurrence of specified corporate events; or
|
•
|
at any time on or after July 15, 2019 until the close of business on the second scheduled trading day immediately preceding the maturity date.
|
•
|
during any calendar quarter (and only during such calendar quarter), if the last reported sale price of the common stock for at least
20
trading days (whether or not consecutive) during a period of
30
consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to
130%
of the conversion price on each applicable trading day;
|
•
|
during the
five
business day period after any
five
consecutive trading day period (the measurement period) in which the trading price per $1,000 principal amount of 1.625% Notes for each trading day of the measurement period was less than
98%
of the product of the last reported sale price of our common stock and the conversion rate on each such trading day;
|
•
|
upon the occurrence of specified corporate events;
|
•
|
if we call any 1.625% Notes for redemption, at any time until the close of business on the business day immediately preceding the redemption date;
|
•
|
during the period from, and including, May 15, 2018 to the close of business on the business day immediately preceding August 19, 2018; or
|
•
|
at any time on or after February 15, 2044 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 1.625% Notes, in integral multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances.
|
|
Balance Sheet Location
|
|
March 31,
2016 |
|
December 31,
2015 |
||||
|
|
|
(In millions)
|
||||||
Derivative asset:
|
|
|
|
|
|
||||
1.125% Call Option
|
Current assets: Derivative asset
|
|
$
|
377
|
|
|
$
|
374
|
|
Derivative liability:
|
|
|
|
|
|
||||
1.125% Conversion Option
|
Current liabilities: Derivative liability
|
|
$
|
377
|
|
|
$
|
374
|
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Restricted stock and performance awards
|
$
|
5
|
|
|
$
|
5
|
|
Employee stock purchase plan and stock options
|
2
|
|
|
1
|
|
||
|
$
|
7
|
|
|
$
|
6
|
|
|
Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|||
|
(In thousands)
|
|
|
|||
Unvested balance as of December 31, 2015
|
1,035
|
|
|
$
|
46.68
|
|
Granted
|
498
|
|
|
64.21
|
|
|
Vested
|
(291
|
)
|
|
39.09
|
|
|
Forfeited
|
(1
|
)
|
|
33.53
|
|
|
Unvested balance as of March 31, 2016
|
1,241
|
|
|
55.50
|
|
|
|
Health Plans
|
|
Molina Medicaid Solutions
|
|
Other
|
|
Consolidated
|
||||||||
|
|
|
|
|
||||||||||||
|
|
(In millions)
|
||||||||||||||
Three Months Ended March 31, 2016
|
|
|
|
|
|
|
|
|
||||||||
Total revenue (1)
|
|
$
|
4,201
|
|
|
$
|
52
|
|
|
$
|
90
|
|
|
$
|
4,343
|
|
Gross margin
|
|
407
|
|
|
6
|
|
|
7
|
|
|
420
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Three Months Ended March 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
Total revenue (1)
|
|
3,117
|
|
|
52
|
|
|
2
|
|
|
3,171
|
|
||||
Gross margin
|
|
335
|
|
|
16
|
|
|
—
|
|
|
351
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total Assets
|
|
|
|
|
|
|
|
|
||||||||
March 31, 2016
|
|
5,302
|
|
|
250
|
|
|
1,631
|
|
|
7,183
|
|
||||
December 31, 2015
|
|
4,707
|
|
|
213
|
|
|
1,656
|
|
|
6,576
|
|
(1)
|
Total revenue consists primarily of premium revenue for the Health Plans segment, and service revenue for the Molina Medicaid Solutions and Other segments.
|
|
Three Months Ended March 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(In millions)
|
||||||
Gross margin:
|
|
|
|
||||
Health Plans
|
$
|
407
|
|
|
$
|
335
|
|
Molina Medicaid Solutions
|
6
|
|
|
16
|
|
||
Other
|
7
|
|
|
—
|
|
||
Other operating revenues (1)
|
208
|
|
|
148
|
|
||
Less: other operating expenses (2)
|
539
|
|
|
417
|
|
||
Operating income
|
89
|
|
|
82
|
|
||
Other expenses, net
|
25
|
|
|
15
|
|
||
Income before income tax expense
|
$
|
64
|
|
|
$
|
67
|
|
(1)
|
Other operating revenues include premium tax revenue, health insurer fee revenue, investment income and other revenue.
|
(2)
|
Other operating expenses include general and administrative expenses, premium tax expenses, health insurer fee expenses and depreciation and amortization.
|
•
|
uncertainties and evolving market and provider economics associated with the implementation of the Affordable Care Act, the Medicaid Expansion, the insurance marketplaces, the effect of various implementing regulations, and uncertainties regarding the Medicare-Medicaid dual eligible demonstration programs in California, Illinois, Michigan, Ohio, South Carolina, and Texas;
|
•
|
management of our medical costs, including seasonal flu patterns and rates of utilization that are consistent with our expectations, our ability to reduce over time the high medical costs commonly associated with new patient populations, and the success of our care management initiatives;
|
•
|
our ability to predict with a reasonable degree of accuracy utilization rates in newly acquired plans and new geographies where we have less experience with both the patient and the provider populations;
|
•
|
our ability to manage growth, including maintaining and creating adequate internal systems and controls relating to authorizations, approvals, and the overall success of care management initiatives designed to control costs;
|
•
|
our ability to deal with increased pharmacy costs, including the increasing cost of high-cost specialty drugs, and formulary changes that allow the option of higher priced nongeneric drugs;
|
•
|
our ability to manage in an environment where the overall trend suggests lower premiums per patient per month (PMPM) than past experience;
|
•
|
federal or state medical cost expenditure floors, administrative cost and profit ceilings, premium stabilization programs, profit sharing arrangements, risk adjustment and conflicting interpretations thereof;
|
•
|
the interpretation and implementation of at-risk premium rules regarding the achievement of certain quality measures, and our ability to recognize revenue amounts associated therewith;
|
•
|
the interpretation and implementation of state contract performance requirements regarding the achievement of certain quality measures, and our ability to avoid liquidated damages associated therewith;
|
•
|
cyber-attacks or other privacy or data security incidents resulting in an inadvertent unauthorized disclosure of protected health information;
|
•
|
the success of our new health plan in Puerto Rico, including the resolution of the Puerto Rico debt crisis, payment of all amounts due under our Medicaid contract, and our efforts to have providers prescribe generics notwithstanding recent changes to Puerto Rico's formulary;
|
•
|
specialty drugs or generic drugs that are exorbitantly priced but not factored into the calculation of our capitated rates;
|
•
|
significant budget pressures on state governments and their potential inability to maintain current rates, to implement expected rate increases, or to maintain existing benefit packages or membership eligibility thresholds or criteria, including the resolution of the Illinois budget impasse and continued payment of all amounts due to our Illinois health plan;
|
•
|
the accurate estimation of incurred but not reported or paid medical costs across our health plans;
|
•
|
retroactive adjustments to premium revenue or accounting estimates which require adjustment based upon subsequent developments or new information;
|
•
|
efforts by states to recoup previously paid amounts, including but not limited to our dispute with the state of New Mexico related to reimbursement for retroactively enrolled members in 2014;
|
•
|
the success of our profit improvement and cost-cutting initiatives
;
|
•
|
the success of our efforts to retain existing government contracts and to obtain new government contracts in connection with state requests for proposals (RFPs) in both existing and new states;
|
•
|
the continuation and renewal of the government contracts of both our health plans and Molina Medicaid Solutions and the terms under which such contracts are renewed;
|
•
|
complications, member confusion, or enrollment backlogs related to the annual renewal of Medicaid coverage;
|
•
|
government audits and reviews, and any fine, enrollment freeze, or monitoring program that may result therefrom;
|
•
|
changes with respect to our provider contracts and the loss of providers;
|
•
|
approval by state regulators of dividends and distributions by our health plan subsidiaries;
|
•
|
changes in funding under our contracts as a result of regulatory changes, programmatic adjustments, or other reforms;
|
•
|
high dollar claims related to catastrophic illness;
|
•
|
the favorable resolution of litigation, arbitration, or administrative proceedings;
|
•
|
the relatively small number of states in which we operate health plans;
|
•
|
the effect on our Los Angeles County subcontract of Centene’s acquisition of Health Net;
|
•
|
the availability of adequate financing on acceptable terms to fund and capitalize our expansion and growth, repay our outstanding indebtedness at maturity and meet our liquidity needs, including the interest expense and other costs associated with such financing;
|
•
|
the failure of a state in which we operate to renew its federal Medicaid waiver;
|
•
|
changes generally affecting the managed care or Medicaid management information systems industries;
|
•
|
increases in government surcharges, taxes, and assessments, including but not limited to the deductibility of certain compensation costs;
|
•
|
newly emergent viruses or widespread epidemics, including the Zika virus, and associated public alarm;
|
•
|
changes in general economic conditions, including unemployment rates;
|
•
|
the sufficiency of our funds on hand to pay the amounts due upon conversion of our outstanding notes;
and
|
•
|
increasing competition and consolidation in the Medicaid industry
.
|
|
March 31,
2016 |
|
December 31,
2015 |
|
March 31,
2015 |
|||
Ending Membership by Health Plan:
|
|
|
|
|
|
|||
California
|
676,000
|
|
|
620,000
|
|
|
574,000
|
|
Florida
|
576,000
|
|
|
440,000
|
|
|
352,000
|
|
Illinois
|
206,000
|
|
|
98,000
|
|
|
102,000
|
|
Michigan
|
399,000
|
|
|
328,000
|
|
|
256,000
|
|
New Mexico
|
246,000
|
|
|
231,000
|
|
|
222,000
|
|
Ohio
|
336,000
|
|
|
327,000
|
|
|
350,000
|
|
Puerto Rico (1)
|
339,000
|
|
|
348,000
|
|
|
—
|
|
South Carolina
|
102,000
|
|
|
99,000
|
|
|
111,000
|
|
Texas
|
380,000
|
|
|
260,000
|
|
|
268,000
|
|
Utah
|
151,000
|
|
|
102,000
|
|
|
90,000
|
|
Washington
|
672,000
|
|
|
582,000
|
|
|
533,000
|
|
Wisconsin
|
137,000
|
|
|
98,000
|
|
|
107,000
|
|
|
4,220,000
|
|
|
3,533,000
|
|
|
2,965,000
|
|
|
|
|
|
|
|
|||
Ending Membership by Program:
|
|
|
|
|
|
|||
Temporary Assistance for Needy Families (TANF) and CHIP (2)
|
2,485,000
|
|
|
2,312,000
|
|
|
1,825,000
|
|
Medicaid Expansion
|
632,000
|
|
|
557,000
|
|
|
437,000
|
|
Aged, Blind or Disabled (ABD)
|
380,000
|
|
|
366,000
|
|
|
358,000
|
|
Marketplace
|
630,000
|
|
|
205,000
|
|
|
266,000
|
|
Medicare-Medicaid Plan (MMP) – Integrated (3)
|
50,000
|
|
|
51,000
|
|
|
34,000
|
|
Medicare Special Needs Plans (Medicare)
|
43,000
|
|
|
42,000
|
|
|
45,000
|
|
|
4,220,000
|
|
|
3,533,000
|
|
|
2,965,000
|
|
(1)
|
The Puerto Rico health plan began serving members effective April 1, 2015.
|
(2)
|
CHIP stands for Children's Health Insurance Program.
|
(3)
|
MMP members who receive both Medicaid and Medicare coverage from Molina Healthcare.
|
|
PMPM Premiums
|
||||||||||
|
Low
|
|
High
|
|
Consolidated
|
||||||
TANF and CHIP
|
$
|
120.00
|
|
|
$
|
290.00
|
|
|
$
|
180.00
|
|
Medicaid Expansion
|
320.00
|
|
|
490.00
|
|
|
370.00
|
|
|||
ABD
|
410.00
|
|
|
1,530.00
|
|
|
960.00
|
|
|||
Marketplace
|
180.00
|
|
|
370.00
|
|
|
250.00
|
|
|||
MMP – Integrated
|
1,210.00
|
|
|
3,220.00
|
|
|
2,220.00
|
|
|||
Medicare
|
810.00
|
|
|
1,100.00
|
|
|
1,030.00
|
|
|
Three Months Ended March 31,
|
||||||||||||||||||||
|
2016
|
|
2015
|
||||||||||||||||||
|
Amount
|
|
PMPM
|
|
% of Total
|
|
Amount
|
|
PMPM
|
|
% of Total
|
||||||||||
Fee for service
|
$
|
2,737
|
|
|
$
|
221.77
|
|
|
76.3
|
%
|
|
$
|
1,948
|
|
|
$
|
226.04
|
|
|
73.9
|
%
|
Pharmacy
|
525
|
|
|
42.53
|
|
|
14.6
|
|
|
351
|
|
|
40.75
|
|
|
13.3
|
|
||||
Capitation
|
295
|
|
|
23.87
|
|
|
8.2
|
|
|
217
|
|
|
25.10
|
|
|
8.2
|
|
||||
Direct delivery
|
16
|
|
|
1.34
|
|
|
0.5
|
|
|
27
|
|
|
3.11
|
|
|
1.0
|
|
||||
Other
|
15
|
|
|
1.23
|
|
|
0.4
|
|
|
93
|
|
|
10.80
|
|
|
3.6
|
|
||||
|
$
|
3,588
|
|
|
$
|
290.74
|
|
|
100.0
|
%
|
|
$
|
2,636
|
|
|
$
|
305.80
|
|
|
100.0
|
%
|
|
Three Months Ended March 31,
|
|
$ Change
|
|
% Change
|
|||||||||
|
2016
|
|
2015
|
|
|
|||||||||
|
(In millions)
|
|
|
|||||||||||
Health Plans:
|
|
|
|
|
|
|
|
|||||||
Premium revenue
|
$
|
3,995
|
|
|
$
|
2,971
|
|
|
$
|
1,024
|
|
|
34
|
%
|
Less: medical care costs
|
3,588
|
|
|
2,636
|
|
|
952
|
|
|
36
|
|
|||
Medical margin
|
$
|
407
|
|
|
$
|
335
|
|
|
$
|
72
|
|
|
21
|
%
|
Medical care ratio
|
89.8
|
%
|
|
88.7
|
%
|
|
|
|
|
|||||
Molina Medicaid Solutions:
|
|
|
|
|
|
|
|
|||||||
Service revenue
|
$
|
52
|
|
|
$
|
52
|
|
|
$
|
—
|
|
|
—
|
%
|
Less: cost of service revenue
|
46
|
|
|
36
|
|
|
10
|
|
|
28
|
|
|||
Service margin
|
$
|
6
|
|
|
$
|
16
|
|
|
$
|
(10
|
)
|
|
(63
|
)%
|
Service cost ratio
|
88.8
|
%
|
|
69.2
|
%
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||
2016
|
|
2015
|
|||||
|
(In millions)
|
||||||
Net income
|
$
|
24
|
|
|
$
|
28
|
|
Adjustments:
|
|
|
|
||||
Depreciation, and amortization of intangible assets and capitalized software
|
37
|
|
|
29
|
|
||
Interest expense
|
25
|
|
|
15
|
|
||
Income tax expense
|
40
|
|
|
39
|
|
||
EBITDA
|
$
|
126
|
|
|
$
|
111
|
|
|
Three Months Ended March 31,
|
||||||||||||||
2016
|
|
2015
|
|||||||||||||
|
(In millions, except diluted per-share amounts)
|
||||||||||||||
Net income
|
$
|
24
|
|
|
$
|
0.43
|
|
|
$
|
28
|
|
|
$
|
0.56
|
|
Adjustment, net of tax:
|
|
|
|
|
|
|
|
||||||||
Amortization of intangible assets
|
5
|
|
|
0.08
|
|
|
3
|
|
|
0.06
|
|
||||
Adjusted net income (1)
|
$
|
29
|
|
|
$
|
0.51
|
|
|
$
|
31
|
|
|
$
|
0.62
|
|
(1)
|
Beginning in the first quarter of 2016, we revised our calculation of adjusted net income. We no longer subtract “Amortization of convertible senior notes and lease financing obligations” from net income to arrive at adjusted net income. We made this change because various capital transactions that we completed in 2015 reduced our relative reliance on convertible notes and lease financing as sources
|
|
Three Months Ended March 31, 2016
|
||||||||||||||||||||||||
|
Member
Months
(1)
|
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR
(2)
|
|
Medical Margin
|
||||||||||||||||
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
|||||||||||||||
TANF and CHIP
|
7.4
|
|
|
$
|
1,324
|
|
|
$
|
178.47
|
|
|
$
|
1,198
|
|
|
$
|
161.46
|
|
|
90.5
|
%
|
|
$
|
126
|
|
Medicaid Expansion
|
1.9
|
|
|
679
|
|
|
365.11
|
|
|
574
|
|
|
308.30
|
|
|
84.4
|
|
|
105
|
|
|||||
ABD
|
1.2
|
|
|
1,112
|
|
|
961.49
|
|
|
1,041
|
|
|
899.79
|
|
|
93.6
|
|
|
71
|
|
|||||
Marketplace
|
1.6
|
|
|
409
|
|
|
251.85
|
|
|
334
|
|
|
205.86
|
|
|
81.7
|
|
|
75
|
|
|||||
MMP
|
0.1
|
|
|
340
|
|
|
2,220.68
|
|
|
317
|
|
|
2,070.23
|
|
|
93.2
|
|
|
23
|
|
|||||
Medicare
|
0.1
|
|
|
131
|
|
|
1,029.10
|
|
|
124
|
|
|
980.49
|
|
|
95.3
|
|
|
7
|
|
|||||
|
12.3
|
|
|
$
|
3,995
|
|
|
$
|
323.73
|
|
|
$
|
3,588
|
|
|
$
|
290.74
|
|
|
89.8
|
%
|
|
$
|
407
|
|
|
Three Months Ended March 31, 2015
|
||||||||||||||||||||||||
|
Member
Months
(1)
|
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR
(2)
|
|
Medical Margin
|
||||||||||||||||
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
|||||||||||||||
TANF and CHIP
|
5.5
|
|
|
$
|
972
|
|
|
$
|
177.40
|
|
|
$
|
897
|
|
|
$
|
163.67
|
|
|
92.3
|
%
|
|
$
|
75
|
|
Medicaid Expansion
|
1.3
|
|
|
507
|
|
|
397.99
|
|
|
393
|
|
|
308.59
|
|
|
77.5
|
|
|
114
|
|
|||||
ABD
|
1.0
|
|
|
940
|
|
|
894.70
|
|
|
863
|
|
|
820.72
|
|
|
91.7
|
|
|
77
|
|
|||||
Marketplace
|
0.6
|
|
|
194
|
|
|
332.52
|
|
|
156
|
|
|
268.60
|
|
|
80.8
|
|
|
38
|
|
|||||
MMP
|
0.1
|
|
|
225
|
|
|
2,206.17
|
|
|
199
|
|
|
1,950.71
|
|
|
88.4
|
|
|
26
|
|
|||||
Medicare
|
0.1
|
|
|
133
|
|
|
1,013.66
|
|
|
128
|
|
|
977.09
|
|
|
96.4
|
|
|
5
|
|
|||||
|
8.6
|
|
|
$
|
2,971
|
|
|
$
|
344.65
|
|
|
$
|
2,636
|
|
|
$
|
305.80
|
|
|
88.7
|
%
|
|
$
|
335
|
|
(1)
|
A member month is defined as the aggregate of each month’s ending membership for the period presented.
|
(2)
|
"MCR" represents medical costs as a percentage of premium revenue.
|
|
Three Months Ended March 31, 2016
|
||||||||||||||||||||||||
|
Member
Months
(1)
|
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR
(2)
|
|
Medical Margin
|
||||||||||||||||
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
|||||||||||||||
California
|
2.0
|
|
|
$
|
541
|
|
|
$
|
273.42
|
|
|
$
|
469
|
|
|
$
|
236.92
|
|
|
86.7
|
%
|
|
$
|
72
|
|
Florida
|
1.6
|
|
|
489
|
|
|
295.42
|
|
|
413
|
|
|
249.45
|
|
|
84.4
|
|
|
76
|
|
|||||
Illinois
|
0.6
|
|
|
149
|
|
|
267.10
|
|
|
132
|
|
|
236.76
|
|
|
88.6
|
|
|
17
|
|
|||||
Michigan
|
1.2
|
|
|
387
|
|
|
320.14
|
|
|
347
|
|
|
287.34
|
|
|
89.8
|
|
|
40
|
|
|||||
New Mexico
|
0.7
|
|
|
336
|
|
|
449.52
|
|
|
296
|
|
|
394.77
|
|
|
87.8
|
|
|
40
|
|
|||||
Ohio
|
1.0
|
|
|
488
|
|
|
489.14
|
|
|
449
|
|
|
450.11
|
|
|
92.0
|
|
|
39
|
|
|||||
Puerto Rico (3)
|
1.0
|
|
|
181
|
|
|
176.85
|
|
|
174
|
|
|
170.43
|
|
|
96.4
|
|
|
7
|
|
|||||
South Carolina
|
0.3
|
|
|
84
|
|
|
275.97
|
|
|
67
|
|
|
220.78
|
|
|
80.0
|
|
|
17
|
|
|||||
Texas
|
1.1
|
|
|
620
|
|
|
580.81
|
|
|
575
|
|
|
538.91
|
|
|
92.8
|
|
|
45
|
|
|||||
Utah
|
0.4
|
|
|
114
|
|
|
264.62
|
|
|
102
|
|
|
235.88
|
|
|
89.1
|
|
|
12
|
|
|||||
Washington
|
2.0
|
|
|
506
|
|
|
255.41
|
|
|
458
|
|
|
231.18
|
|
|
90.5
|
|
|
48
|
|
|||||
Wisconsin
|
0.4
|
|
|
97
|
|
|
250.36
|
|
|
92
|
|
|
238.01
|
|
|
95.1
|
|
|
5
|
|
|||||
Other (4)
|
—
|
|
|
3
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|||||
|
12.3
|
|
|
$
|
3,995
|
|
|
$
|
323.73
|
|
|
$
|
3,588
|
|
|
$
|
290.74
|
|
|
89.8
|
%
|
|
$
|
407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Three Months Ended March 31, 2015
|
||||||||||||||||||||||||
|
Member
Months
(1)
|
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR
(2)
|
|
Medical Margin
|
||||||||||||||||
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
|||||||||||||||
California
|
1.7
|
|
|
$
|
511
|
|
|
$
|
305.10
|
|
|
$
|
452
|
|
|
$
|
270.37
|
|
|
88.6
|
%
|
|
$
|
59
|
|
Florida
|
0.9
|
|
|
311
|
|
|
346.46
|
|
|
281
|
|
|
313.51
|
|
|
90.5
|
|
|
30
|
|
|||||
Illinois
|
0.3
|
|
|
104
|
|
|
341.86
|
|
|
90
|
|
|
293.58
|
|
|
85.9
|
|
|
14
|
|
|||||
Michigan
|
0.7
|
|
|
220
|
|
|
290.29
|
|
|
185
|
|
|
244.32
|
|
|
84.2
|
|
|
35
|
|
|||||
New Mexico
|
0.7
|
|
|
314
|
|
|
458.75
|
|
|
292
|
|
|
426.82
|
|
|
93.0
|
|
|
22
|
|
|||||
Ohio
|
1.0
|
|
|
515
|
|
|
488.26
|
|
|
413
|
|
|
391.56
|
|
|
80.2
|
|
|
102
|
|
|||||
Puerto Rico (3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
South Carolina
|
0.3
|
|
|
91
|
|
|
266.42
|
|
|
74
|
|
|
216.67
|
|
|
81.3
|
|
|
17
|
|
|||||
Texas
|
0.8
|
|
|
382
|
|
|
492.38
|
|
|
352
|
|
|
453.30
|
|
|
92.1
|
|
|
30
|
|
|||||
Utah
|
0.3
|
|
|
77
|
|
|
290.27
|
|
|
74
|
|
|
278.99
|
|
|
96.1
|
|
|
3
|
|
|||||
Washington
|
1.6
|
|
|
376
|
|
|
240.83
|
|
|
352
|
|
|
225.49
|
|
|
93.6
|
|
|
24
|
|
|||||
Wisconsin
|
0.3
|
|
|
60
|
|
|
199.61
|
|
|
49
|
|
|
161.13
|
|
|
80.7
|
|
|
11
|
|
|||||
Other (4)
|
—
|
|
|
10
|
|
|
—
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|||||
|
8.6
|
|
|
$
|
2,971
|
|
|
$
|
344.65
|
|
|
$
|
2,636
|
|
|
$
|
305.80
|
|
|
88.7
|
%
|
|
$
|
335
|
|
(1)
|
A member month is defined as the aggregate of each month’s ending membership for the period presented.
|
(2)
|
"MCR" represents medical costs as a percentage of premium revenue.
|
(3)
|
The Puerto Rico health plan began serving members effective April 1, 2015.
|
(4)
|
"Other" medical care costs include primarily medically related administrative costs of the parent company, and direct delivery costs.
|
|
Three Months Ended March 31,
|
||||||||||
|
2016
|
|
2015
|
|
Change
|
||||||
|
(In millions)
|
||||||||||
Net cash provided by operating activities
|
$
|
139
|
|
|
$
|
554
|
|
|
$
|
(415
|
)
|
Net cash used in investing activities
|
(314
|
)
|
|
(228
|
)
|
|
(86
|
)
|
|||
Net cash provided by financing activities
|
2
|
|
|
5
|
|
|
(3
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
$
|
(173
|
)
|
|
$
|
331
|
|
|
$
|
(504
|
)
|
•
|
The change in receivables resulted in a use of cash of
$266 million
in the
first quarter of 2016
, and was a source of cash of
$105 million
in the
first quarter of 2015
. In the current year, receivables increased due to the addition of receivables from our Puerto Rico health plan which began operations on April 1, 2015, and acquisition-related growth. In the prior year, receivables decreased due to significant collections of premiums receivable at our California health plan in the first quarter of 2015.
|
•
|
The change in deferred revenue resulted in a use of cash of
$129 million
in the
first quarter of 2016
, and a use of cash of
$26 million
in the
first quarter of 2015
. In the current year, deferred revenue decreased due to the advance receipt of $146 million in premium revenue at our Washington health plan as of December 31, 2015, with no corresponding receipt as of March 31, 2016. In the first quarter of 2015, the Washington health plan received comparable advanced receipts of premiums at the end of both December 2014 and March 2015.
|
•
|
Health Plans segment medical claims and benefits payable
. Refer to Part I, Item 1 of this Form 10-Q, Notes to Consolidated Financial Statements, Note
9
, "
Medical Claims and Benefits Payable
," for a table which presents the components of the change in medical claims and benefits payable, and for additional information regarding the factors used to determine our changes in estimates for all periods presented in the accompanying consolidated financial statements. Other than the discussion as noted above, there have been no significant changes during the
three months ended March 31, 2016
, to our disclosure reported in Part II, Item 7 of our Annual Report on Form 10-K for the year ended
December 31, 2015
.
|
•
|
Health Plans segment contractual provisions that may adjust or limit revenue or profit
. Refer to Part I, Item 1 of this Form 10-Q, Notes to Consolidated Financial Statements, Note
2
, "
Significant Accounting Policies
," for a discussion of amounts recorded in the
first quarter
of
2016
in connection with such contractual provisions.
|
•
|
Health Plans segment quality incentives
. For a discussion of this topic, including amounts recorded in our consolidated financial statements, refer to Part I, Item 1 of this Form 10-Q, Notes to Consolidated Financial Statements, Note
2
, "
Significant Accounting Policies
."
|
•
|
Molina Medicaid Solutions segment revenue and cost recognition
. There have been no significant changes during the
three months ended March 31, 2016
, to our disclosure reported in Part II, Item 7 of our Annual Report on Form 10-K for the year ended
December 31, 2015
.
|
|
Total Number
of Shares
Purchased (a)
|
|
Average Price
Paid per Share
|
|
Total Number of Shares
Purchased as Part of
Publicly
Announced
Plans or
Programs
|
|
Maximum
Number (or Approximate
Dollar Value)
of Shares that May Yet Be
Purchased Under the Plans
or Programs (b)
|
||||||
January 1 - January 31
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
50,000,000
|
|
February 1 - February 29
|
511
|
|
|
$
|
54.40
|
|
|
—
|
|
|
$
|
50,000,000
|
|
March 1 - March 31
|
102,583
|
|
|
$
|
63.74
|
|
|
—
|
|
|
$
|
50,000,000
|
|
Total
|
103,094
|
|
|
$
|
63.69
|
|
|
—
|
|
|
|
(a)
|
During the
three months ended March 31, 2016
, we withheld
103,094
shares of common stock under our 2011 Equity Incentive Plan to settle our employees' income tax obligations.
|
(b)
|
Effective as of December 16, 2015, our board of directors authorized the repurchase of up to $50 million in aggregate of our common stock or senior notes. This repurchase program extends through December 31, 2016.
|
|
|
|
MOLINA HEALTHCARE, INC.
|
|
|
|
(Registrant)
|
|
|
|
|
Dated:
|
May 2, 2016
|
|
/s/ JOSEPH M. MOLINA, M.D.
|
|
|
|
Joseph M. Molina, M.D.
|
|
|
|
Chairman of the Board,
|
|
|
|
Chief Executive Officer and President
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
Dated:
|
May 2, 2016
|
|
/s/ JOHN C. MOLINA, J.D.
|
|
|
|
John C. Molina, J.D.
|
|
|
|
Chief Financial Officer and Treasurer
|
|
|
|
(Principal Financial Officer)
|
Exhibit No.
|
|
Title
|
|
|
|
10.1
|
|
Second Amended and Restated Employment Agreement with Dr. J. Mario Molina, dated March 16, 2016. Filed as Exhibit 10.1 to registrant’s Form 8-K filed March 16, 2016.
|
|
|
|
10.2
|
|
Second Amended and Restated Employment Agreement with John C. Molina dated March 16, 2016. Filed as Exhibit 10.2 to registrant’s Form 8-K filed March 16, 2016.
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Rules 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934, as amended.
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Rules 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934, as amended.
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS
|
|
XBRL Taxonomy Instance Document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
1 Year Molina Healthcare Chart |
1 Month Molina Healthcare Chart |
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