60855RAC4 Filings — Molina Healthcare, Inc. - FilingSpy
60855RAC4
Molina Healthcare, Inc.
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A government-sponsored health insurer that runs Medicaid, Medicare Advantage, and Marketplace plans for low-income and older Americans across the country. It was founded in 1980 by Dr. C. David Molina, an emergency room physician who opened his first clinic in Long Beach, California, after watching low-income patients get turned away by private doctors. Molina bought the run-down building for that first clinic with his own savings—his son later joked you could see the sky through the roof—and the company grew into a Fortune 500 name serving millions of members.
Q2 2026 net income fell to $60M as membership dropped 14% and consolidated MCR rose to 92.2%
Membership fell 14% to 4.9 million, the first such drop in years. declined 3.1% to $10.8B and was $0.27 a year earlier versus $4.75, with at 14.1% and the consolidated up 180 to 92.2% as medical costs rose across all segments. The company is shrinking enrollment to restore margins, leaving profitability at a multi-year low.
Key takeaways
Q2 2026 fell to $60M as premium decreased 6% to $10.2B, driven by a 14% membership decline to 4.9M partially offset by rate updates.
The consolidated increased 180 to 92.2%, reflecting a higher MCR across all segments amid a challenging medical cost environment.
Medicaid medical margin fell 16% to $585M on lower membership and a 140-basis-point MCR increase, while Marketplace margin dropped 61% to $69M on a 350-basis-point MCR increase.
Section summaries
Management's Discussion and Analysis
Q2 2026 net income fell to $60M as membership dropped 14% YoY and the consolidated MCR rose 180 bps to 92.2%.
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Premium decreased 6% to $10.2B, driven by a 14% membership decline to 4.9M, partially offset by rate updates.
A $93M was recorded in Q1 2026 related to the planned 2027 exit of the MAPD product, a one-off non-cash charge that cut prior-quarter pre-tax margin.
improved to $788M in H1 2026 from a $112M use in H1 2025, mainly due to timing of government and .
The company expects further Medicaid and Marketplace enrollment declines through 2027 as part of its strategy to restore target margins.
What changed
Q1 2026 flagged Medicaid MCR from 92.0% as OBBBA phases in: Q2 Medicaid MCR rose 140 on lower membership, reaching a level consistent with that trajectory.
Q1 2026 flagged Marketplace premium through 2026 after subsidy expiration: Q2 shows Marketplace margin down 61% to $69M on 350 MCR increase as enrollment shrinks.
Q1 2026 flagged whether holds above $1B: H1 2026 was $788M, below the $1,082M Q1 alone, showing timing-driven reversion.
Q1 2026 flagged and $3,767M : debt was flat sequentially at $3,767M with the $93M exiting the book.
FY 2025 flagged a ~50% Marketplace premium decrease in 2026: Q2 premium revenue fell 28% to $724M in Q1 and membership is being intentionally reduced.
What to watch
Medicaid MCR trajectory from the Q2 140- increase as OBBBA work requirements begin phasing in.
Marketplace membership and MCR through H2 2026 as the company executes the planned ~50% premium decrease.
Whether reverts below $1B next quarter after H1 came in at $788M.
Further enrollment declines into 2027 as management shrinks the book to restore target margins.
The consolidated MCR increased 180 to 92.2%, reflecting a higher MCR across all segments amid a challenging medical cost environment.
Medicaid fell 16% to $585M on lower membership and a 140 MCR increase, while Marketplace margin dropped 61% to $69M on a 350 bps MCR increase.
A $93M intangible asset was recorded in Q1 2026 related to the planned exit of the MAPD product in 2027.
improved to $788M in H1 2026 from a $112M use in H1 2025, mainly due to timing of government and .
The company expects further Medicaid and Marketplace enrollment declines through 2027 as part of its strategy to restore target margins.
Quantitative and Qualitative Disclosures About Market Risk
Our earnings and financial position are exposed to financial market risk relating to changes in interest rates, and the resulting impact on investment income and interest expense. Substantially all of our investments and restricted investments are subject to interest rate risk a…
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Our earnings and financial position are exposed to financial market risk relating to changes in interest rates, and the resulting impact on investment income and interest expense.
Substantially all of our investments and restricted investments are subject to interest rate risk and will decrease in value if market interest rates increase. Assuming a hypothetical and immediate 1% increase in market interest rates at June 30, 2026, the fair value of our fixed income investments would decrease by approximately $120 million. Declines in interest rates over time will reduce our investment income.
For further information on fair value measurements and our investment portfolio, please refer to Notes to Consolidated Financial Statements, Note 4, “Fair Value Measurements,” and Note 5, “Investments.”
Borrowings under the Credit Agreement bear interest based, at our election, on a base rate or other defined rate, plus in each case, the applicable margin. Our notes bear interest at specified rates, each payable semiannually in arrears. For further information, see Notes to Consolidated Financial Statements, Note 7, “Debt.”