(Reuters) – Molina Healthcare reported higher-than-expected costs tied to its government-backed Medicaid plans, sending the health insurer’s shares down nearly 9% in after-hours trading.
The end of a pandemic-era federal policy and redetermination of Medicaid eligibility by states have made insurers face higher costs for over a year, marking an uptick in sicker patients.
Long Beach, California-based Molina’s quarterly medical cost ratio, the percentage of premiums paid out for medical services, was 90.2%, higher than estimates of 88.43%, as per data compiled by LSEG.
Molina served about 4.89 million people through its Medicaid plans as of Dec. 31, an increase of 7.66% compared to the previous year.
Larger peers Centene Corp and UnitedHealth Group have also reported higher medical costs tied to the end of the pandemic-era federal policy.
Molina expects its 2025 total revenue to be $44 billion, with adjusted profit of at least $24.5 per share. Analysts on average had expected full-year revenue of $43.52 billion and adjusted profit of $25.71 per share.
Molina posted quarterly premium revenue of $9.98 billion. Its total revenue of $10.5 billion was above analysts’ estimates of $10.32 billion.
The health insurer posted a fourth-quarter adjusted profit of $5.05 per share, below Wall Street estimates of $5.72.
(Reporting by Unnamalai L in Bengaluru; Editing by Maju Samuel)
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