Molina Healthcare ( NYSE: MOH ) said that the California Department of Health Care Services (DHCS) announced the awards of Medi-Cal contracts to Molina Healthcare of California on Jan. 1, 2024.
The company added that the Dec. 30, announcement confirms Molina's footprint as originally announced in August 2022, including Medi-Cal awards in each of Riverside, Sacramento, San Bernardino, and San Diego Counties and as a subcontractor in Los Angeles County.
In Los Angeles County, Molina will share membership equally with the current commercial incumbent. In Riverside and San Bernadino Counties, Molina will remain the sole commercial plan, according to the company.
Molina added that DHCS also agreed to grant the company a contract to offer D-SNP products for dual eligible members in Los Angeles County.
Under the finalized award, Molina's Medi-Cal membership is expected to grow from ~600K members as of Sept. 30, 2022, to about 1.2M members in 2024.
Molina's current annual premium revenue related to its Medi-Cal contract of ~$1.9B is now expected to be ~$3.9B for full year 2024 versus the prior expectation of $5.5B based on DHCS's August 2022 announcement.
The projected combined 2024 revenues of California, Nebraska, and Iowa now total $4.2B, according to the company.
Molina said that the incremental earnings from these recently announced portfolio additions are updated to at least $3.50 per share at full run rate, now reflecting portfolio target margins and modest operating leverage.
The company added that the DHCS grant of a D-SNP contract for dual eligible members in Los Angeles County will create an additional revenue for Molina. This additional opportunity is expected to exceed $500M at full run rate and is not included in the updated $3.9B full year 2024 Medi-Cal revenue projection.
"This confirmation of significant growth represents an important step forward for our enterprise, doubling our presence in the state of California," said President and CEO Joe Zubretsky.
For further details see:
Molina eyes California Medicaid revenue doubling under revised Medi-Cal contracts