Molina Healthcare, Inc (MOH) Business Profile

What it does

Molina Healthcare provides managed healthcare services through Medicaid, Medicare and state insurance marketplaces. It sells health coverage and arranges care for people eligible for government-funded or subsidized programs, including low-income families, older adults and people with disabilities. Its primary customers are state Medicaid agencies and the federal government.

Under managed care, Molina receives premiums and takes responsibility for arranging and paying for covered healthcare. Its Medicaid plans serve groups including families with children, people with disabilities and individuals who need long-term services and supports. Its Medicare plans include products for people eligible for both Medicare and Medicaid. Marketplace plans serve people buying coverage through insurance exchanges, many of whom receive premium subsidies.

Molina also provides long-term services and supports consulting in Wisconsin and has a small commercial insurance business. It centralizes functions such as claims processing, customer service, technology and care management for its subsidiaries.

The company was founded in 1980 and is headquartered in Long Beach. Joseph M. Zubretsky is president and chief executive officer. Molina served approximately 5.5 million members across 21 states as of December 31, 2025. It had 19,000 employees in FY2025.

How it makes money

Molina earns most of its revenue from health insurance premiums. In Medicaid, state agencies pay its health plans a per-member, per-month rate in exchange for arranging and paying for covered services and assuming medical and administrative cost risk. Those rates vary by state, program, demographics and, in most cases, members’ health risks. They are subject to state appropriations and must be actuarially sound.

Medicare Advantage contracts likewise pay fixed monthly premiums that vary with factors including location, health status and plan quality ratings. Medicare risk adjustment can increase or decrease premiums retrospectively, and audits can lead to further adjustments. Marketplace rates are developed annually using estimates of care use, unit costs, member risk and other expenses, and are filed with regulators for approval.

Premiums recur while members remain enrolled, but the underlying contracts have different terms. State Medicaid contracts typically last three to five years and can be rebid; Medicare contracts vary by product, while Marketplace contracts are renewed annually. Molina’s Other segment includes consulting services and commercial coverage and is insignificant to consolidated results.

For 2025, total revenue was $45.4 billion and premium revenue was $43.1 billion; in the third quarter of 2026, premium revenue was $10.5 billion.

The amount left after medical costs depends on how premiums compare with the cost of members’ care. Molina’s medical care ratio measures medical care costs as a percentage of premium revenue. That ratio was 91.7% in 2025, compared with 89.1% in 2024. Molina reported a 92.9% consolidated medical care ratio for the third quarter of 2026.

Customers and how it sells

Molina’s primary customers are state Medicaid agencies and the federal government, while its members are the people covered by its plans. Medicaid members include low-income families, people with chronic disabilities or behavioral health impairments, and people receiving long-term care. Medicare products include plans for people eligible for both Medicare and Medicaid. Marketplace customers buy individual coverage through exchanges, often with government subsidies.

As of December 31, 2025, Molina served approximately 5.5 million members across 21 states. Its Medicaid contracts in California, New York, Texas and Washington each represented approximately 10% or more of consolidated Medicaid premium revenue in 2025. Medicaid represented 75% of consolidated premium revenue that year.

States typically choose Medicaid plans through formal bidding. Eligible members often select a plan, while those who do not choose one may be assigned automatically under state rules. Medicare customers can enroll with help from Molina’s agents or outside brokers, or through the internet. Marketplace members can enroll through agents or directly through exchanges.

Molina implemented the Florida Children’s Medical Services contract in 2026, taking on 115,000 members. It plans to reduce its Marketplace footprint to seven states for 2027.

Suppliers and costs

Molina arranges, pays for and manages healthcare services rather than manufacturing a physical product. Its costs include the care delivered to members, along with administrative expenses for functions such as claims processing, customer service, technology and compliance. Medical care costs include hospital services, pharmacy, behavioral healthcare and long-term services and supports.

Molina assumes medical and administrative cost risk in return for Medicaid and Medicare premiums. Utilization, the severity of members’ health needs and the cost of services can change faster than premium rates. In 2025, its consolidated medical care ratio rose to 91.7% from 89.1% in 2024. Molina attributed the increase to higher utilization and changes in member acuity across its segments.

The general and administrative expense ratio was 6.6% in 2025, compared with 6.7% in 2024. Molina provides centralized administrative services to its subsidiaries, including underwriting, claims processing, purchasing and actuarial work. It is also investing in care management, payment integrity and artificial intelligence tools to improve efficiency.

Competitive position

Molina competes for state Medicaid contracts through formal bidding processes. States can rebid contracts, and a plan that does not win a rebid may lose the business. In Medicare and Marketplace, Molina also competes for members choosing among available plans. No competing company is identified as such in the available descriptions of these markets.

From 2019 to 2025, Molina reported a 90% Medicaid re-procurement win rate representing $14 billion in retained revenue and an 80% new contract win rate worth $20 billion in premium. It was reported on 28 October 2026 that Molina had about 7% of the national Medicaid market.

Our reading: Molina’s procurement record and experience operating across state programs provide evidence of a competitive advantage, but contract rebidding limits how durable that advantage is. Its overlapping Medicaid and Medicare presence also supports plans for members eligible for both programs, although those plans remain subject to government contracts and regulation.

Molina offers Marketplace plans in many states where it has Medicaid plans, allowing members to stay with their providers when they transition between the programs. Medicaid auto-assignment rules may consider factors such as a plan’s quality, provider network and previous member enrollment.

Growth opportunities

Molina’s growth strategy combines organic expansion, state contract wins and acquisitions. The company’s long-term premium revenue growth target is 11% to 13%. It also aims to expand care management, value-based contracting and payment integrity, and to serve more people eligible for both Medicaid and Medicare.

In 2025, Molina acquired ConnectiCare, which served members across Marketplace, Medicare and commercial products in Connecticut. New Medicaid contract opportunities include the Florida Children’s Medical Services program, which Molina implemented in 2026. Molina expects its new Georgia and Texas contracts to start later than previously anticipated, in 2027 or 2028.

Molina has submitted bids in Missouri and Arizona and for the Texas Star Kids program; the Texas process is on hold. It said its Indiana bid would be finalized soon. The company sizes these near-term requests for proposals at approximately $26 billion.

Molina is also reshaping its portfolio. It intends to exit its Medicare Advantage prescription drug product for 2027 and focus its Medicare business on dual-eligible members. It plans to reduce its Marketplace footprint to seven states. The company expects 2027 premium revenue of at least $45 billion, including the annualization of the Florida contract and the effects of the portfolio changes.

Structural risks

• Medical costs and rates: State Medicaid rates may be insufficient to cover rising medical costs. Molina’s costs can change with utilization, member acuity, hospital costs, pharmacy costs and behavioral healthcare costs; state rate updates can lag those changes.

• Contract renewals: States can rebid Medicaid contracts or terminate them under their terms. Losing a significant contract could materially affect Molina’s business and cash flows. Its California, New York, Texas and Washington Medicaid contracts each accounted for approximately 10% or more of consolidated Medicaid premium revenue in 2025.

• Enrollment and regulation: Medicaid eligibility reviews can reduce enrollment and change the health needs of remaining members. Molina expects work requirements and more frequent eligibility verification to affect membership, with timing and impact varying by state.

• Premium adjustments and reporting: States can require repayment of premiums for people later found ineligible. Medicare risk-adjustment audits can also result in premium adjustments, while states increasingly use encounter data to set rates and assess compliance.

• Acquisition and capital constraints: Acquisitions can bring integration expenses, delays and member losses. Regulated health plans must maintain minimum capital and surplus, and dividends to the parent are subject to applicable regulations.

Bottom line

Our reading

Molina is a government-sponsored health plan business whose recurring premiums depend heavily on state contracts and enrolled membership. Our reading: its procurement record and expansion into dual-eligible care provide routes to growth, but its results remain exposed to medical costs rising ahead of rates, contract losses and eligibility changes. The Florida contract adds revenue, while its initial costs and the planned exits from other products make execution important.