Molina Healthcare faces risks from Medicaid redeterminations, fluctuating market interest rates impacting investment values, state budget pressures potentially reducing rates, evolving ACA Marketplace dynamics, acquisition integration challenges, and legal proceedings (e.g., Kentucky RFP, Texas qui tam litigation). The accuracy of medical cost estimations and potential for increased pharmacy costs are also noted as risks. The company's reliance on vendors like Change Healthcare also presents a risk.
Financial Upside
Molina Healthcare anticipates membership growth from new Medicaid contracts (Iowa, Nebraska, New Mexico, Florida, Wisconsin, Michigan, Mississippi, Texas, and California), acquisitions (Bright Health Medicare, My Choice Wisconsin, and potentially ConnectiCare), and expansion in existing markets. Increased premium revenue, investment income, and improved G&A expense ratios are expected to drive positive financial results. The company also has increased borrowing capacity.
