Molina Healthcare(MOH)2025-02-06 16:32Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of 10 billion of premium revenue for Q4 2024, with full-year adjusted earnings per share of 38.6 billion, reflecting a 19% year-over-year growth, while the pretax margin was 4.3%, within the long-term target range [13][14] - The consolidated Net Cost Ratio (NCR) for Q4 was 90.2%, higher than expected due to medical cost pressures, with a full-year NCR of 89.1% [11][63] Business Line Data and Key Metrics Changes - In Medicaid, the full-year MCR was 90.3%, or 89.8% when adjusted for prior year items, with a Q4 MCR also at 90.2% due to higher utilization [14][63] - Medicare's full-year MCR was 89.1%, with Q4 MCR at 93.8%, reflecting higher medical costs [19][67] - Marketplace performed well with a full-year MCR of 75.4%, significantly below the long-term target range, allowing for reinvestment into pricing for growth [20][69] Market Data and Key Metrics Changes - The company expects to end 2025 with approximately 5 million Medicaid members, 250,000 Medicare members, and 580,000 Marketplace members, reflecting significant growth [75][78] - The 2025 premium revenue guidance is approximately 46 billion in premium revenue by 2026 and at least 7.75 for 2026 and beyond, supporting future EPS growth [31][88] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that Q4 results fell short of expectations but emphasized the ability to manage through industry-wide headwinds [53][56] - The company remains confident in achieving long-term targets and believes that any changes to the Medicaid program will be marginal [47][51] Other Important Information - The company closed its acquisition of Connecticut from EmblemHealth, expected to generate 500 million and closed a bond offering of $750 million [72] Q&A Session Summary Question: Can you provide more color on the components within the Medicaid MLR for 2025? - Management indicated that the MLR guidance for 2025 is flat with 2024, projecting a 4.5% rate increase and a 4.5% trend off the 2024 baseline [92][93] Question: What were the specific drivers for the Marketplace MLR in Q4? - Management attributed the Q4 Marketplace MCR of 83.3% to normal seasonality, noting that the full-year MCR of 75.4% was satisfactory [122] Question: Can you clarify the cost trends and what drives the assumptions for 2025? - Management explained that the 2024 cost trend was 6.5%, while the 2025 projection is 4.5%, reflecting a more stable utilization trend without the acuity shift seen in 2024 [135][136]