Molina Healthcare(MOH) - 2022 Q1 - Quarterly Report

Financial Performance - Total revenue for Q1 2022 was $7,770 million, a 19.2% increase from $6,522 million in Q1 2021[7] - Net income for Q1 2022 was $258 million, up from $228 million in Q1 2021, representing a 13.2% year-over-year growth[7] - Operating income for Q1 2022 was $372 million, compared to $335 million in Q1 2021, reflecting an increase of 11.0%[7] - Comprehensive income for Q1 2022 was $182 million, down from $217 million in Q1 2021, a decrease of 16.1%[8] - The total margin for the three months ended March 31, 2022, was $971 million, compared to $836 million in the same period of 2021, reflecting a margin increase of 16.1%[77] - Net income for the first quarter of 2022 was $258 million, compared to $228 million in Q1 2021, representing a 13.2% year-over-year growth[7] Membership and Revenue Sources - The company served approximately 5.1 million members eligible for government-sponsored healthcare programs across 19 states as of March 31, 2022[16] - Membership increased by 480,000, or 10%, year-over-year, totaling approximately 5.1 million members as of March 31, 2022[93][94] - Medicaid revenue increased to $6,187 million in Q1 2022 from $5,020 million in Q1 2021, representing a growth of 23.2%[76] - Medicare revenue rose to $949 million in Q1 2022, up 17.9% from $805 million in Q1 2021[76] - Premium revenue reached $7.5 billion, a 19% increase compared to $6.3 billion in Q1 2021, driven by organic membership growth and acquisitions[94][99] - Medicaid premium revenue increased by $1.1 billion, or 24%, in Q1 2022 compared to Q1 2021, driven by organic membership growth and acquisitions[130] Medical Care Costs - Medical care costs increased to $6,563 million in Q1 2022, up from $5,474 million in Q1 2021, indicating a rise of 19.8%[7] - The consolidated medical care ratio (MCR) was 87.1%, up from 86.8% in Q1 2021, with COVID-related factors increasing the MCR by approximately 50 basis points[94][101] - The medical margin for Medicaid increased by $106 million, or 18%, in Q1 2022 compared to Q1 2021, despite an increase in the medical care ratio (MCR) to 88.1%[132][133] - The Medicaid MCR increased by 60 basis points year-over-year, reflecting the net effect of COVID-19 and improved operations[133] Cash and Investments - Cash and cash equivalents at the end of Q1 2022 were $4,866 million, compared to $4,497 million at the end of Q1 2021, showing an increase of 8.2%[14] - As of March 31, 2022, cash and cash equivalents totaled $4,804 million, an increase from $4,431 million in the same period of 2021, representing a growth of 8.4%[26] - Cash, cash equivalents, and investments at the parent company totaled $250 million as of March 31, 2022, down from $348 million at the end of 2021[142] - Total cash, cash equivalents, and restricted cash and cash equivalents amounted to $4,866 million as of March 31, 2022, compared to $4,497 million in the prior year, indicating a year-over-year increase of about 8.2%[26] Acquisitions and Contracts - The company completed the acquisition of Cigna Corporation's Texas Medicaid and Medicare-Medicaid Plan contracts on January 1, 2022[20] - The acquisition of Affinity Health Plan, Inc. was finalized on October 25, 2021, for an initial purchase consideration of approximately $176 million, with subsequent adjustments resulting in a net increase of $11 million to goodwill[43] - The company announced an agreement to acquire the Medicaid Managed Long Term Care business of AgeWell New York for approximately $106 million, expected to close by Q3 2022[166] Legal and Regulatory Matters - The company is involved in legal proceedings that may impact its financial position, including a breach of contract case in Puerto Rico[84] - The company expects to announce the award for the California Medicaid procurement in early August 2022, with an effective date of January 2024[19] Financial Position and Liabilities - Total assets as of March 31, 2022, were $12,360 million, compared to $12,209 million at the end of 2021, reflecting a growth of 1.2%[10] - Total liabilities decreased slightly to $9,566 million as of March 31, 2022, from $9,579 million at the end of 2021[10] - The company had $2,174 million in total non-current long-term debt as of March 31, 2022, slightly up from $2,173 million as of December 31, 2021[63] - The minimum capital and surplus requirement for regulated subsidiaries was approximately $2.1 billion as of March 31, 2022, with aggregate capital exceeding this requirement[155] Operational Metrics - The medical care ratio (MCR) is a key metric for assessing performance, representing medical care costs as a percentage of premium revenue[74] - General and administrative (G&A) expense ratio was 7.4%, slightly up from 7.3% in Q1 2021, reflecting temporary labor costs and investments for growth[94][106] - Interest expense decreased to $28 million in Q1 2022 from $30 million in Q1 2021, following the early redemption of senior notes[94][109] COVID-19 Impact - The company recognized approximately $28 million related to COVID-19 risk corridors for the three months ended March 31, 2022, a decrease from $110 million recognized in the same period of 2021[34] - The company continues to monitor the financial impact of the COVID-19 pandemic, believing that cash resources and borrowing capacity will be sufficient to support operations[80] - The company recognized approximately $28 million for the impact of COVID-related risk corridors in Q1 2022, down from $110 million in Q1 2021[115]