Molina Healthcare(US:MOH)2022-02-14 22:12Revenue Growth - Premium revenue for 2021 was $26,855 million, a 47% increase from $18,299 million in 2020[16] - Total revenue for 2021 reached $27,771 million, up from $19,423 million in 2020, reflecting a 43% growth[16] - In 2021, consolidated Medicaid premium revenue was $20,461 million, representing a significant increase from $14,265 million in 2020[61] - Marketplace revenue growth was 99% in 2021, with a total of 728,000 members, an increase of 129% compared to December 31, 2020[70] - The net effect of COVID-19 decreased 2021 net income per diluted share by $3.50, compared to a decrease of $2.30 in 2020[205] Membership Growth - The total membership as of December 31, 2021, was approximately 5.2 million, up from 4.0 million in 2020, representing a 29% increase[20] - Membership increased by 1.2 million members year-over-year to 5.2 million at December 31, 2021[207] - The acquisition of Affinity Health Plan added approximately 310,000 members in New York[27] - The acquisition of Magellan Complete Care added approximately 200,000 members and 25,000 long-term services and supports participants in Wisconsin[31] - Medicaid enrollment increased by approximately 750,000 members since March 31, 2020, primarily due to the suspension of redeterminations for Medicaid eligibility[69] Profitability and Margins - The after-tax margin for 2021 was 2.4%, down from 3.5% in 2020, indicating a decrease in profitability relative to total revenue[16] - The overall medical care ratio for the year ended December 31, 2021, was 88.3%, and a one percentage point increase would have reduced net income per diluted share from $11.25 to approximately $7.76, a difference of $3.49[166] - The consolidated Medical Care Ratio (MCR) increased by approximately 90 basis points in 2021 due to COVID-related inpatient costs, compared to an increase of approximately 50 basis points in 2020[205] - The company operates with very low profit margins, and small changes in operating performance can disproportionately impact reported net income[159] Acquisitions and Contracts - The acquisition of AgeWell New York is expected to close by Q3 2022, with AgeWell serving approximately 13,000 members and generating $700 million in premium revenue for 2020[28] - The acquisition of Cigna's Texas Medicaid and Medicare contracts was completed on January 1, 2022[30] - The Ohio Medicaid contract is expected to begin on July 1, 2022, and represented approximately $2,308 million, or 11%, of consolidated Medicaid premium revenue in 2021[39] - The Texas Medicaid contracts accounted for approximately $2,158 million, or 11%, of consolidated Medicaid premium revenue in 2021[40] - The Washington Medicaid contract represented approximately $3,939 million, or 19%, of consolidated Medicaid premium revenue in 2021[41] Regulatory and Compliance - The company is subject to stringent regulatory requirements, including maintaining minimum statutory capital and compliance with fraud and abuse laws[113] - The company has implemented a HIPAA compliance program to ensure adherence to privacy and security regulations[107] - Legislative proposals could significantly reduce federal or state spending on the Medicaid program, potentially adversely affecting the company's financial condition[75] - The company is subject to various risks in the government contracting process, including audits and investigations, which could lead to penalties or loss of contracts[140] Risks and Challenges - The company anticipates a 66% decrease in Marketplace enrollment in 2022, projecting a total of 250,000 members and a premium revenue decline of approximately 38%[55] - Increased pharmaceutical costs, including new high-cost specialty drugs, could adversely impact the company's financial condition and results of operations[137] - The company may incur increased costs due to the ongoing COVID-19 pandemic, affecting cash flows and operating results[126] - The pandemic has led to significant declines in state tax revenues, potentially impacting capitation payments to the company[126] - The company faces significant competition in the Medicare market, with large competitors holding substantial market shares[103] Employee and Operational Insights - As of December 31, 2021, the company employed nearly 14,000 employees, including over 2,600 from recent acquisitions[114] - The company has increased focus on employee health and safety, offering new benefits in response to the COVID-19 pandemic[115] - The company offers a comprehensive suite of benefits, including 401(k) matching contributions and wellness programs[123] - The company has introduced improvements in employee development and diversity as part of its workplace modernization program[116] Financial Management - The company completed a private offering of $750 million in senior notes, using approximately $725 million to redeem existing notes and fund general corporate purposes[32] - The company authorized a stock repurchase program of up to $500 million, which will be funded with cash on hand and extends through December 31, 2022[32] - The company received $564 million and $635 million in dividends from regulated health plan subsidiaries in 2021 and 2020, respectively[129] - The company has not paid cash dividends on its common stock to date, with future dividends dependent on various factors including financial condition and regulatory restrictions[202]