Molina Healthcare (MOH) 9 Feb 232022 Q4 Earnings call transcript

Good morning, and welcome to Molina Healthcare’s Fourth Quarter 2022 Earnings Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Joe Krocheski, Senior Vice President, Molina Healthcare. ahead. go Please

welcome call. and Healthcare's quarter fourth Good to earnings XXXX morning, Molina

Joining CEO, website. our President our Molina's on market me are today is and and was after Keim. available press closed yesterday earnings Investor CFO, A Joe release quarter announcing Relations fourth our distributed the Mark and Zubretsky;

are for The numbers to Shortly after call, this days. of earnings a replay the XX replay in the conclusion will the release. be available access

of X, you this the updated of For has earnings who initial you as the rebroadcast call. not the we listen that presentation, those remarks of to remind today, XXXX. been are made to Thursday, subsequent February It

directly can press release. certain our measures. refer On this XXXX of will be fourth call, for quarter A non-GAAP we XXXX and GAAP found comparable measures the in XXXX these to most reconciliation measures with

XXXX statements recent embedded Mexico RFP limited During those New XXXX and guidance, will growth but Medicaid our call, in M&A lease acquisitions term submissions, we Florida, power our projected activity, margins. not and and strategy making certain our including, earnings and terminations, and regarding Indiana, future our awards, statements, recent long outlook forward-looking and revenue, to, including be our our RFP our

the the of the the we questions. that risk review risks materially cautioned XX-Q from to Form current risk in listed of call remarks, and are Form factors our take our filed listeners After all will are and report the results completion your discussed with certain statements the differ to with filings Listeners to We in our annual as SEC, uncertainties our cause subject to prepared open as forward-looking well actual that could factors expectations. XX-K our X-K our Form advise SEC.

turn call Officer, will Zubretsky. Chief I Executive our over Joe to the now Joe?

will Today, and Joe, you, morning. several good on provide we updates Thank topics.

earnings guidance, our year for premium successes our and revenue our growth, results strategy and XXXX, XXXX quarter growth profitable and on for business initial the our revenue fourth Our outlook full sustaining initiatives given for XXXX, financial our and XXXX. in new

Last representing with Let adjusted $X.XX, year-over-year. fourth me we XX% of earnings quarter reported quarter growth diluted per night, share start fourth the highlights.

care X.X% XX.X% pretax medical margin adjusted G&A performance. ratio, another fourth of operating Our ratio, operating fourth continued and strong quarter performance. X.X% quarter consolidated adjusted financial strong and demonstrate The year completes

For $XX.XX. XX% adjusted year, grew full by by to grew share earnings $XX the we revenue billion to premium XX% per approximately and

with long-term adjusted flows. enterprise cash Our to business our full of representing operating predictable flagship margin year approximately our targets. strong was XX% Medicaid, pretax produce and line in of results squarely X.X% continues and very revenue

and by driven recently the XX%, For growth. acquisitions by and grew Medicaid XX% year, organic approximately we the premium closed Nevada our contract, by of inception membership revenue

focused execution. on are strength The target underlying levels, MCR XX% medical is and rate the executing term of stable and pre-pandemic is long diversified environment management. year reported our we reflecting portfolio cost the our fundamentals low of and of The of with the our end consistent range at full

enterprise to Medicare income low continues and high of grow acuity Our representing niche operating XX% strong serving members demonstrate organically performance. revenue,

XX.X% income full but XX%. year we our includes term pressure our The and MCR long XXXX. by was which from XXX target by XX% revenue the above in was MAPD of doubled care. by driven Membership For growth range, modestly than basis COVID-related primarily membership year, premium more low reported grew approximately of points product,

performed On breakeven. basis, of our the business, of at three the a period and the both roughly terms lines smallest Marketplace, we in business repositioned business portfolio in of mix. its In the size metallic pure

XXXX. business performance year, the we positioned marketplace we margins believe the to our for While expectations have in financial our initial meet achieve did not target

execution strategy the in for to XXXX growth of now The the were Turning year. many. successes our

the In on to Wisconsin the fourth front, further the at the acquisition our we Texas Cigna's of beginning My of market the adding of LTSS beginning July, Medicaid business acquisition On the the announced franchise. AgeWell we quarter. acquisition, Choice And year. M&A closed at the leading

to on will while year Iowa premium ability exceptional. RFP rate first to $X.X In new in on continue the these responses Medicaid our and revenue. then franchise in performance year billion excellent XXX% demonstrate submitted. total, revenues. win contract for rate contract and of Mississippi, renewed our We Our enterprise our wins RFPs for In doubled our won summary, the two full in size margins, XXXX California we expanding premium results run add our that a growing produce Nebraska contracts: XXXX was project RFP the for year in by

now Turning guidance. XXXX to our

to drive easily and harvest built earnings Meanwhile, see earnings which can the margins. allows core of the store We backlog we and attractive us the the You pattern focus operating the the created. on operational continue contract to at results repeatable new grow fundamentals contracts and mature. have we improvements, acquisitions business as

project of jump-off XXXX since solid annual our $XX pivot serves as high growth to XXXX our guidance, representing earnings point. a revenue rate to we XXXX margin growth XXXX. in per regard $XX.XX a premium of compound billion, share earnings With The XX%

per emerge share $X into that embedded of will prior XXXX earnings earnings. expect We

of share and We improvements. core operational per $X.XX expect produce to growth

guidance $X.XX various elements of will We of have been RSV, flu, are guidance of one-time costs, share all COVID, implementation could impacts least which in per operating at earnings, impact results margin from combine improvements $XX.XX. redeterminations The adjusted which our any by least in offset these contract at to considered The of guidance. earnings produce informing our XXXX margins core per elements per supporting share share the XXXX durable. $XX.XX, expect earnings our

with by long-term The in metrics implied are ranges. our target guidance line squarely

growth is is in X.X% As our core basis. with attractive profile on pretax rate model adjusted a XX% growth an in that XX% earnings a margin, reported of guidance produces a and a This repeatable.

earnings potential beyond we an future XXXX. the guidance, build view growth profile, of the in earnings to our which forward within base embedded a addition In form provides of our for earnings the continue to our

the or our new This embedded continuing at component at consideration not is as on organic effect three into Medicaid earnings COVID, now to estimate acquisitions of earnings impact point does figure. $X per ongoing is which target margins earnings and from of $X The achieving the per new strategic net of share defined risk additional this growth future least share. take contract initiatives. store corridors, any growth future wins adds from remaining this earnings upside latent The

strategy. our now growth Turning to

XXXX carve organic the and revenue. Nevada major in and has Los our greater for and early filling of M&A a transactions part record build a Angeles member as and preserving country. this large incumbent continuing We $XX.X a middle growth, to in on doubling by strategy of have regulatory $XX securing and overcoming to $XX premium already reprocurements balanced, in at clear contracts pharmacy state billion. the stage, including already attraction near-term, retention taken have of wins, contract outs. one line billion significant we key the and the in of At to focusing strides member produced of stellar our Not The County, The expansion toward of goal. our billion is to our sight mention, headwinds XXXX. aspect of business, no now California Kentucky, strategy the of seven all time in redeterminations the pipeline new our size this

Services a on term in strategy. its as opportunities that an now a the growth service it posted related all intent update our Texas state. issuing to notice With Human our will specific At to in a our the long for of I the end existing of was flight backdrop, provide Health January, Plan, areas on award and some indicating Health notice Commission of that website eight Texas the contract

once able and We of provide expect be update to contracts been these more finalized to signed. have an

for Indiana the intends response in evaluation program it terminated that LTSS the has state as the been soon is and RFP according announced issue announcement. to New has reprocurement pending and to RFP expedited submitted, award release, their process press it possible. Mexico, an In subsequent was as Our

underway, in nearly our many have development including new potential business expanding We footprint initiatives former well to the other Florida. statewide state for

half Our states new XX and contracts. years, With to track we record, over only confident represents the state ability footprint state win capabilities, of growing multiple RFP coming with the remain managed our Medicaid. opportunities still in and referenceability Medicaid our new additional demonstrated

acquisition pipeline replete Our remains opportunities. with actionable

record from this While the predict, drive confidence important remains transactions and our ability success strength strategy. growth to track of element our us gives in of of to growth of our further timing our pipeline the difficult

share adjusted profile. $X new earnings per share COVID earnings growth created store At embedded if in Current with in strategy, per with our business XXXX. performance eliminated. a $X remaining share of we and the in identified revenue XXXX. are $XX.XX growing And an the solid era least $XX.XX of $XX.X financial are on per pleased core few when additional summary, of and XXXX of of billion corridors premium progress has and which power our earnings In very least made upside, at and

our is continued execution any growth All of the initiatives. before impact of from this

deepest team, these of the in could our we and this again proprietary management now thanks I heartfelt XX,XXX operating produced who model extend excellent approaching hallmark, dedicated accomplish have management and associates in course, all my without with not Of once our To concert team strong, entire process appreciation. results.

will that, With insight some the over to for financials. on call Mark? the turn I Mark additional

good additional XXXX I continued quarter will MCR our medical fourth fourth our year full results, consolidated the and Joe, our quarter full our for on performance, management. was Beginning morning, with reflecting cost Today, everyone. details XX.X%, quarter sheet Thanks, our year some fourth balance and strong strong and guidance. discuss and

being medical quarter, the the were line varied our in For but line impact and of RSV business, impacted. flu, with in disproportionately largely expectations, Medicare COVID-related with total by costs

our and XX%. consolidated continued was consistent year was the flagship our full driven Our strong with MCR of by business. expectations This performance was Medicaid result

by and within In cost favorable a retroactive our modest premiums. the MCR was Medicaid, was COVID reported effective MCR. reported net XX.X%. management, our performance was basis strong medical driven in quarter of This effect points XX The quarter fourth

full term levels. consistent end with at Our the MCR of was of year low pre-pandemic long XX% range target Medicaid our and

Medicare, in driven reported was higher of XX.X% effect significant our mix our of the growth MAPD. flu fourth MCR and quarter by In COVID,

COVID our net within basis effect MCR. the points of quarter, the reported was During XXX

handful Our similarly by MCR was modestly COVID MCR. The in by utilization range XXX of effect seasonality a XX.X%. long of The full MCR our XX.X% fourth our markets. points reported our marketplace, of quarter In was net within above term COVID. net basis approximately and normal target year Medicare MCR was and XX burdened effect reported points basis was impacted was of increased

our Marketplace basis impacted some by quarter, we settled provider prior approximately to the XXX years, MCR disproportionately also dating In balances which points.

full XXXX from XXX XXX effective impact exceeded Our the Marketplace range XX.X% as long-term MCR includes basis our target COVID, of risk the of quarter. of as points a net and year points approximately approximately true-up second adjustment recorded in basis well

drivers in of a which to ratio, and Additional strong G&A charitable adjusted year quarter enrollment expenditures expected results our with full community activities. open seasonal X.X% related quarter include and spending and fourth fourth on was line

we higher Our as focused we recent even adjusted feature investments expected X.X% to making the full results year leverage grow, as cost and delivering growth. in full also G&A increases our interest investment while as to sustain rates. Fourth on fixed from quarter income year-over-year appropriate ratio improved net year remain

to now Turning sheet. balance our

claims, continue acquisition consistent to our about decline AgeWell LTSS end remains claims closing of with quarter by sequentially. increased confident at settled XX%, an the the lower quarters, payable quarter. was the prior the approach cycle of three of as position. which we in quickly, mix reserve was and additional reserve The be from payment in the resulting well Days the Our in more as driven days

Debt remains at parent XX.X. and XX-month fall X.X end was quarter the ratios respectively. On basis, Our of cash, times capital times the debt-to-total company ratio X.X EBITDA, cap strong. a trailing and our debt XX.X%, to these was net of foundation net

dated long X%. just our on cost leverage fixed low. at eight weighted years bond and of debt All average Our are remains maturities average

strategies. of quarter, approximately have million ample on of XXX,XXX to and drive incremental organic our and end $XXX $XXX powder the growth we cash quarter parent, In the cash to debt and strong we flow of subsidiary was shares. hand our million. dry harvested the Parent With dividends capacity, company repurchased at the cash inorganic substantial

the operating due corridor XXXX prior full for year operating cash compared the primarily flow XXXX the to Medicaid risk billion. of Normalizing XXXX to lower cash cash $X.X payments, year these year, risk was adjustment settlement timing of in flow payments. marketplace and large prior was

Choice of our membership growth, redeterminations. offset the to guidance, inception from In we the contract Turning of by now organic quarter acquisition XXXX expect our midyear to My second the with membership. Iowa beginning resumption largely and Medicaid, be Wisconsin

year-end We X.X expect members. this approximately to result membership in XXXX million of

our enrollment during In based the period, with approximately year the total expect performance and we XXX,XXX XXX,XXX members Medicare, to with the to on membership XXXX in grow of year, annual members. ending begin continue

for is membership split products. XXXX between growth our and Medicare D-SNP to evenly Our be expected MAPD

open In target Marketplace, of attrition for enrollment, margins XXXX. year. XXXX reflecting through for approximately Accounting pricing strategy to based normal business a on expect the and SEP XXX,XXX begin limited we to levels members, in achieve with this our

end We expect to XXXX members. XXX,XXX approximately with

from redeterminations marketplace any We to continue to Medicaid projections. upside as membership these treat

Moving on to premium revenue.

revenue is representing growth is the expected Medicaid year full revenue Medicare $XXX of in $XX guidance Choice inception of impact comprised from contract. Wisconsin million of for Our guidance from My billion when billion $X.X XXXX new revenue acquisition closed. XXXX AgeWell our midyear for of $X Our and billion, the growth the and organic Iowa premium items, several X% and

impact for million we pass-through lower in for $XXX known $XXX million carve-outs, million expect in beginning April, resumption that the of include: $XXX million XXXX redeterminations in pharmacy the the the and recur don't of items offsetting for Several membership, to XXXX. revenue Marketplace $XXX

Turning to earnings guidance.

least full be to expect year per earnings We share. adjusted at $XX.XX

the the net earnings, Our from COVID a the per partially impact and approximately redeterminations. of the $X of realization consisting reflects of EPS portion guidance of by of effect share XXXX acquisitions of offset embedded contribution

drivers $X.XX of $X.XX for non-recurring least least now and to combined at impact to our pharmacy net several yields in project operating $XX.XX. estate of offset negative we real costs underlying known income, deliver for of this, contract share implementation including levers, by one-time strategy, share PBM core per of at the investment add growth per These new be the the earnings we To year guidance share, Recognizing organic plus our the our earnings XXXX that partially our carve-outs. reduction XXXX wins effect contract $XX.XX. full per

select Moving P&L guidance on metrics. to

XX%, to approximately consistent consolidated expect care We medical our ratio our be with XXXX results.

new disciplined growth. from leverage adjusted G&A fixed absorbing fall wins. contract one-time our management for This to slightly and while expect X%, We ratio non-recurring the impact to reflects the of even implementation cost costs revenue cost our our

roughly Excluding the improved our well implementation count be adjusted X.X%, expected year-over-year be G&A costs, is we have quarterly adjusted to margin per expected over Weighted the new first two ratio after-tax flat million of expect share share year long-term tax The would effective XX.X within average our shares. be to is the X.X%. profile quarters with fairly contract target And is rate the expected each. to to be at $X earnings range. XX.X%, our to adjusted year,

comprised and from My achieving of our for three share mentioned, and is new $X store wins, least share Joe $X.XX least power As accretion. and AgeWell at per contract acquisitions, at XXXX recent our Choice Wisconsin is embedded new per full earnings $X.XX

additional upside store be to continue era carry at $X for We embedded risk providing approximately $X earnings. growth COVID new potential of to least corridors

I'll the some to over now Joe turn call Joe? concluding for remarks.

awards Medicaid In in won our looking Mark. five $XX contracts. the briefly billion We short, to doubled revenue existing and defended profitable $X billion In years, we our period acquired accomplishments. over new over past on of Thanks, company's base. we in all the reflect revenue. pause We back the

products, industry-leading margins pretax in X% a on averaging produced X% core have to We basis. our

per a S&P to share per XXX We've Fortune growth from XXXX share to line in XXXX nearly expansion the in were ascended allowed and into guidance. to earnings status top loss promoted us grow margin and $XX The XXX.

continue this a care expand opportunities have years. to our and to build to for more take next We retrospective franchise excitement, pure-play on. and express and many enthusiasm journey government are grow There grow managed energy so We our to only franchise. the five

at time reaching an new five share in reaching point cause say later Day Investor company, merely as you plan for cost the at with here set one milestones the to year. for our not we the this goals. celebration, over We view but aspirational is consternation to marks next As a a years

Operator, our now questions. are remarks. This to concludes prepared take we ready

We question session. now Instructions] will first The comes question-and-answer [Operator Nephron begin the ahead. Josh Raskin with from Please go Research.

Hi. Thanks. Good morning.

maybe to meaningfully. be to So contributor. even some MLR is the fair of by you there not the a to guidance view be quantify could your MLR absolute meaning actually expect the flat. XXXX And maybe that MLR? the are in for it segment specifically changes would be based assume MLR fair down Medicaid Would size, on reterminations it up? and overall how embedded But assume just Marketplace is those impacting I the probably of Medicaid help

correct. is That Josh. Sure,

We are projecting business, we range of Marketplace the of way going down with we're each ratio the long-term to XX% that Obviously, our stable through pricing XXXX. slightly the the our in different small to bring strategy, and actions, that medical silver XXXX care of MCR XX%. year-over-year. with end and repositioning will consolidated within long-term produce range a get with XX% high a at the there in We guidance of of

in XX% range to us our we XX.X%, in mean, any all range a points to process to the underperformed middle the And the Medicaid, slightly being nuanced in range, yes, our are the We long-term of puts have project outperforming our XX%. COVID, its pressure. range. for long-term RSV, Medicare XX% we guidance considering been come into because the year flu, Medicare reversion at of long-term perhaps target range target that potential of long-term of middle basis impacts the forecasting of now revenue, of because retermination XXX that will our reaction

the tail of that's tape for of So projection MCR XXXX. line the business into

Josh, Total That's at right, Mark. guidance Joe. it's MLR. XX%

pretty of middle the long-term right As Joe got in I've the of mentioned, each much segments guidance.

Medicare X%. So to think XX.X% XX% of Advantage it, and XX%; XX Medicaid, Marketplace, call

about For Advantage, this bit a weightings, little year, the what probably had similar we about XX% which Medicaid. smaller marketplace, is Medicare to about in pretty X% portfolio as XX%

you that round all So out.

year we obviously XXXX roughly I'd XX%. guidance at is, our in an XX.X% saying other Medicaid full Medicaid. for thing only an We're finished The say in

I'm conservatism, an that's for who knows So there. just XX general or MLRs how additional points stores, basis about new that's the but redetermination thinking

Okay.

explicit points of in capturing no conservatism? but basis general it that So redetermination, sort XX of specific

it, way the That's to think about Josh.

Perfect. Thanks.

The from comes next Rice Suisse. ahead. Credit question with A.J. Please go

and peers Any huge your because Thanks. are to -- Hi, from decline marketplace, just it's market seeing. portion, you thought. 'XX, with you everyone, hear become was for showing not. very know And growth, there's -- that but for you your put Are slight saw decline you've I perspective. to make others in that people you while everybody. know smaller a benefits comment price the some you Maybe I sensitive quite seems a in in and this public in exchanges enrollment like, enrollment. as we as about what I'll changes would are been talking surprised are can on in people just what trying divergence margin. It on for what a that or consistent I'm

out the I'm maybe on might like you have they you, have the come exchanges know if And than up a a pool, the baking be And there, sense because discussion sicker today. average a lot But view? risk would net-net, Can possibly not you're anyway, as I out. in not you commentary. about you the been lives for even public the play of of it don't then assuming the redetermined that those think little anything look what have positive how that that they're you're give in saying lives you might us public there's fleshing exchanges if when assumption just on on of a you'll public any exchange any do guidance? do redeterminations pick exchanges your you affect person some

that allocators shown aggregate XXX,XXX members, fully does enrollment we're the to this that to the and period starting to introduction Sure, capital for year with respect our XXX,XXX that year risk pricing some instability about and billion A.J. by has was finishing results volatility. premium The with with line of the strategy. $X.X it in with the the members. the in And inherent year. membership our special business other We'll Look, of have the pool of due factors expectations

the over also There years. of has pricing been past some irrational couple

of So good the silver and margin place the landed a we pushing for going button has if XXXX for conclude stabilized rational, business pool digit the more this achieve stable, that small in exactly likely to our us due of conclude business to was and it in lack government grow the the allocate right movement risk approach has is pause rules, to mid-single target, and of line pool the risk again. capital would to pricing we

Mark, anything to add?

Yeah, A.J., good morning.

X% starting with end XXX,XXX year, mentioned, this members Joe what put expected. the into going rate think, As down, market We exactly year. by to off of the really I we XXX,XXX the

at look that put so the and of the we not what with X% you we all. the got surprised into If pricing with at result market, mix

quite Those MLRs be to about asked we They the folks underwriting up range. new from expecting the you our pent-up I'm will MLRs. consistent over not to be folks be demand. the in with To health coming coming pick redetermination, insurance. extent Now with not will

a stable they So come as I'm pretty pool expecting over.

Okay. That’s Thanks great. lot. a

Please go ahead. from comes Research. question with Wolfe Justin next Lake The

A morning. couple on Good questions the numbers side. Thanks. of

to Medicaid membership? give I us know membership, on going be First, can flat. you the it's

should how some think your You in us XXXX you terms 'XX there mind? acquisitions growth into buckets? redeterminations of Can we of offsetting expecting those each give from in numbers And talked those about for new what you're about redeterminations. of then,

in this saw year, there look year DCP paid it in like year fourth I take paid bunch heard of in fourth in reserved as a quarter. about a a at the quarter and or on reserves, the this of quarter last I've significant the and percentage of you fourth versus then And mentioned was versus that didn't release go the costs, payments of you quarter did to medical a talk I total year. claims look change last kind back

hoping could that little Thanks. flesh in terms seeing just you what you there? bit So were of a out

Great.

Justin. So a bunch there,

members. Let start with We with me XXXX million Medicaid. X.X ended about

earlier, We'll about to pieces As in more The guys. the XXXX mentioned conclude of or expect replaced same. is a go around with by I Joe XXX,XXX there. off, moving probably coming number good but redetermination

Iowa the the example, My acquisition Choice about of XXX,XXX members, bunch acquisition a members; XX,XXX For about offsets California fee-for-service in coming there.

So pretty from much perspective. year a the flat membership over

related DCP, the the the talking triangles, general, reserving, our and On payments same external medical I the about at to same actuarial purchase you're In It's the our our review. at when leadership, development approach is and to look audit look on expenses. same and I same. DCP

lot whole our So faster is, the pays a AgeWell, fourth membership, membership and whole faster. process. has that I adjudicates in a which What confident feel LTSS the quarter, about very lot in changed added brought we

We also had the extra cycle. payment

we fourth paid in the more So medical than when at I look recorded quarter, actually expense. I what

to that's a of decline DCP XX. Hope XX helps. that driving So that from bunch

color. Thanks the Right. for

next with go The from question Sternick comes Please JPMorgan. ahead. Calvin

morning. Good Hey.

in your that saying market Marketplace next going I your evaluation than in Just grow that's could you for you of on this the look outlook just that said Marketplace year the reevaluate marketplace let forward. you the if to it down a want your context again was year-to-year. the that comments just understand kind based growth overall are year. next little And It you kind like something of grow different Is the look year, sounds strategy. where some to that membership of of float up just want you you follow-up. a stable, sounded or previous and to to and quick

what business, stability Now and risk the be the people that become put and period are many convinced us around target market risk that of we a into stabilize with the that's of in pricing look of eligible to at of rational. who's competitors to line the pool, that in the we respect rules going years, If how eligible, by when pool that chasing couple are instability. consider the now is and government thrown they has to past into eligible moving should the we're

I've capital allocate business responsible and always could a it growth it back grow to in this the put but more measured grow way. into it, we said, category, and very

but anything strategy sure, right keep now, until measured more conclude it allocate grow not responsible I'm small stable we along. and we capital way. in And So that and silver it we're our a new, been should seeing all to very and that's it

Got know sense have curious just pre-COVID. growth you're But from not Marketplace I redeterminations. from what forecasting you it. And a if recapture for the rate was

when got often Marketplace typically they someone long how And Molina go elsewhere? did got able they redetermined guess Medicaid, how So coverage to are in a of you I before in uninsured recapture some those product? members

we to to worked in reasons the models answer with create capture how because would we We I not mean that forecasted forecast it. is various is pretty past imprecise. of scenarios. is the could one haven't data way the around it's all the The I decided

uncharted to determined text, growth. them that them reestablish in in channels it but that and and distribution eligibility but members upside protocols over membership and through place our this operational in will consider states is for been it's manner. they phone it's outreach if ineligible eligible help transfer mail to with a highly subsidized that then Medicaid Marketplace for warm have member We allow product, the waters, before, are that we -- But as Marketplace just forecast model chose done for to and because a create to it, never our not capture we

All right. Great. Thanks.

ahead. Stephens. with from Scott comes Please question next The go Fidel

other a Good I to Thanks. fill I'll try use out just to morning. guess, Hi. XXXX. question elements of modeling for my couple the

you us for cash and if interest give flow, on investment XXXX? income interested also could and thoughts then your operating Just expense

Sure. it's Mark. Scott,

to cash parent organically I to and I take fund. I've the that's because some got year pay this cash need about restocks think expect for I've what dividends. focus So few at my operating firepower. got that flow acquisitions when flow, a growth I on I to pretty meaningful

billion told, at expect have the the more end all $X.X to year. So parent, of the than I by

rates. Interest XXXX forward, my the expense, bonds, $X that. wildcard, across my finishing to about of year guessing expect at the billion investments. on model going We're know can about you XXXX including you you income, that's know interest investments, I a all with everything right? and end of subs. with billion cash cash and On $X.X

kind what this is, here raise right? We've wildcard an the one interest Fed on put to already rate Now that, had of year.

maybe half or the declines Funds back look got of one future We've two rates. you maybe Fed raise the one and at If year. more coming

how about that Not I year? do across think sure. So the quite

could any place between think there. a a and credible mid and on I yield interest pretty high forecast Xs basis out with come you model

follow-up Okay. Thanks. And question. just one quick

Just you're on the in and sort engagement Obviously, XXXX. significant some about the in new of pacing you've of thinking got pipeline side, installations M&A of flight. business the how

So M&A interested in layering Thanks. about as in how you're well. thinking

Scott. And new deep changed local with we can this pursue of continue our story to significant operators the continued continue nothing to M&A part respect we Molina and the state contract and enterprise, to and larger to really listen of to the their for mission and -- Yeah, aggressively have of new profit implementations financial has that and be to plans access fulfill the pipeline. to single broad want where they they Even acquisitions the resources bring. integrations both have on with in-flight backlog appetite and wins, not capabilities

some and and confident of given and of the of activity would the has story in pipeline feel very really of nothing here say, the opportunities, we So it's there. some changed size the in level the great a I XXXX. announcements maturity

you. Thank Okay.

from ahead. Please Hall comes question next Michael with Morgan Stanley. The go

you. Thank Hi.

and about like happened marketplace, touch Just wanted again ask in on 'XX. to just the what

the than a large XX% but ended I to balances year, think QX at the of scheduling excluding really MLR, even past XXX was then up year XX%. beginning expected. you're expectation there of And higher past So expecting the miss full quarter, provided bps still this

at you're end Now to the year. XX%

than recalibration more thought metal So I cover. your disciplined went major you was to pricing of peers this through

from divergent with we initial So have us Marketplace what expectations? MLR saw. what than Could the and why through you expected would I large like stability more about happened walk

our one-time adjustment quarter, middle the Sure. significant said we risk in fourth even items the the COVID-related And as exclusion balances, in that renewed prepared the items, And true-up SEP of remarks, of settlement with year. the the from in the the MLR MLR. meet of continued membership on drag the marketplace. current did continuing not expectations prior year, provider that our year some to drag The significant we into in the

we're now was a believe priced year SEP this the XX,XXX more and the produce might for X,XXX gives to where the month special it. the stability, X,XXX period producing height enrollment a We month, it XX,XXX risk and full of to that

we're our year, not even good that scores So membership that visibility we in the we mid-single risk on low-single items. But one-time margins did our expectations feel to ignoring we the increase, appropriate digit trend, make renewal to digit digit shape in while this meet good XXXX. high-single price get with sure hit

The next Fargo. with go question Stephen Wells comes ahead. Baxter Please from

kind consistently should too color we or your there to line we is I but on throughout close be thinking do it Hi. Thanks. the that wanted probably know operate expectations. Medicaid level appreciate quarterly, Medicaid MLR maybe want that that I year How any the MLR? slope I on think of generally about? around you XX.X guide about should question. expect to Yeah. up you to to follow the

And the a give of Thanks. would into bow sense then DCP you AgeWell just question basis, a look stand-alone the DCPs context? just we that could business, to can for us what the the try put kind on of a like put on to on

it to over slightly have Mark. and of patterns businesses emerge, the changed, time. changed has But MCRs changed the the mix given seasonal of business of the of how turn I'll dynamics the many So yes, has

to turn you view perform of might a Mark Medicaid I'll give how over quarters. the to it So

flat. pretty we've in Medicaid, Yeah. you I'm expecting on Medicare than run the if And certainly more so look historically, marketplace. consistently pretty

you So straight model line. I that think pretty one can

we on up the can you On with you. average, but that. with don't a number have AgeWell, I offline. to Thank I does what follow it follow-up my we'll that. discrete weighted know

Nathan The next ahead. from with question Sachs. Goldman Please comes Rich go

questions. Great. the for Thanks

share just per that? the you going take potentially from You do earnings? for And earnings pools as redeterminations states three on then plays out COVID corridors. potentially time mentioned to place. rates, the What's potential occur the risk revisiting state you. rates do underlying more realize of remaining to how Thank generally line approach the power and these to you are think $X the process states changes How think risk the

because something margins the They from Washington We Washington, articulated We M&A the entirely two during we either matter. or harvesting they being proven view, of to of Mississippi, that were earning outside separated actually don't latent two and our COVID. separated we time $X over compressed because we earnings one put the consciously embedded $X lingering eliminating track COVID them is that. era have in and contracts Nathan. will Sure, place but COVID. three of our and major There control a is of components on of doing. record that our them State They're believe target in remaining of our are controllable, that corridors control. be related as eliminated, is,

and be will to that that to not, we that the will rates, there to we'll aware redetermination of it. states, them significant the business respect we about able us if if acuity believe due the actuaries that. if make of shift they're soundest for that -- of a actuarial vary their certainly would at say we and experience process. somewhere customers would an With is it, And somewhere conversation fact acuity are aware a our aware And in least productive prevail, and in leads the principle have to or potential book shift the I

XX any and Medicaid on our number our a if us, that that, to that were build of reopen are there's told states willing redetermination, states when quite in now. to of number from just impact they on Nathan, have to it. A revisit

we commitment So between move they and need that our rates the feel to. will as good that efforts advocacy

you. Thank

ahead. The with question Taylor Please comes from Cowen. go next Gary

is of that potential et Is distributed and driven And rate repricing. the evenly is enrollment loss Good margins, or the by around on Most exchange questions membership pretty your investor redetermination of quick all out my decline? just the you'd Molina risk cetera. answered, point two morning, secondly, One are ones. just Hey. XX% in guys. there on impact about then incoming in that any angst because footprint state increase particular

would additional us around provide of utilizers, your cetera? I you've know Thanks. shared think. wondered helpful, with low if to you people, redetermined, might before else add zero utilizers, you Medicaid, populations Just just some MLR that could some most done I and anything work comfort any share on likely be be guide et you've to

the numbers because MLRs. year at year Gary, on kick MLR greater than one focus I'll We the more arguments members one less for members look duration. the one data. to happen. look and with second theoretical And is an and could the at duration, your shift acuity looking year XX% at with We at to members the year We data. then shared of greater we're answer less the question But Mark than and many than for look We than analysis duration, there's you first duration. one zero all investors we've same one, it that detail. so with why

rate Medicaid to zero. a the rate gone is that which book. We the at in hasn't still There disenrollment look of occurs lapse membership,

leads book, that or the all a So be but expansion tenant not we to the it in believe a a easy deal and actually ABD at us shift we slight are look Mark? believe there shift of and could manageable book, unsound. and is that productive the maybe makes be the data, to the when in probably discussion book there aware that states acuity have somewhere while acuity will it particularly rate and if with, we'll because rates in

Yes.

the couple XX% not more of folks every versus seeing less points, XX% with bucket. increase, we're folks Expansion, really the of just the to is an the the our changing. us but Remember, across of a than data So we year update not conclusion bit revenue. board this zero much. analysis the in MCR is one is quarter and Joe little a expansion total mentioned

an The that that been a little we or population. bit do about of other see expansion. again, coordination of increase benefits is benefits, any have data folks of really, Once duplication in not talking some point

there So across Maybe, board, really it's is something the here? but minimal.

an here impact the So to not expecting plays out. again, it much of extent

I state XX dense. previous think Now in it. are we any fairly I on across distribution to disproportionately quite your Marketplace? our to are distributed outliers see pretty don't being where refer amenable the real here. estate good revisiting question, even I We've one our first On states back any question, density of got states the Yeah.

you. Thank

ahead. with next go comes The from question Steven Barclays. Valiquette Please

morning. Good Thanks. Great.

So just business. a on exchange follow-up the question

to Here you the silver demonstrates profile has move mentioned from bronze shift the margin right been the that. better

your just or a talked again has know bronze ago, year about a change greater this have Has us a comfort within but year give reexplore I point gotten that to proven just of to level? you ago? view. to tricky to that remind would So you versus why on Thanks. better be bronze worse more currently more from What

anything the an bronze from priced not can to really it's absolute is point perspective, same I where product anomaly design, industry of that that the thing fact the way an design, Steven, is we product revenue in but than just less make for one the same the HCCs, produces is member Mark? it the and less risk acuity with bronze therefore, aspects And other in does there same same and that it level, silver silver. score are services slightly attractive. the of the in it

lower say building Yeah. just couple product. thoughts. a Joe's I'd things a of actuarial It's value on

attracts whole do, a better product is risk up, the adjustment on on rules lot that Sometimes think that going don't the they're to but the balance folks use way are set load, a finally, of other revenue and it attractive and at from gold than on less just perspective becomes is And operating ratios. G&A a lower silver our some slightly bronze. a it

margins just the You see there. take more and those don't things it's volatile, all we together,

Thanks. Okay.

ahead. We'll Please Fischbeck go some The I'm right, may connection questioner, next Bank not Mr. who's ahead. question with Bank. comes Hill, your All from to you. Deutsche go sure, George Kevin down. the gone Hill Please have next go with of America. hearing trouble

the to that in Great. addition the XXX% embedded Is is The that coming of quick I jump before it wasn't clear to $X.XX question me. $X $X.XX Thanks. One back clarification in the earnings, or question. X.XX? into real

guy net the which costs, effective other items other So $X out. store EPS; two in in of $X.XX. of the also there cancel $X.XX, is the COVID; in each the of total but hit $X a and There's And redetermination implementation which are on is there current away that then, new year are also there's of XXXX, of year, remaining expecting next bad right? go $X

at you're So looking those other cancel $X out, and two each $X.

Okay.

power $X that not on So number. XX guidance earnings is XX, on the the current

Correct.

about I redeterminations then redeterminations sounds as because the is different, in in the it MLR it you And which just right. the then hand, call, a want how like pressure All dismissed one talked as more throughout thought you've I potential guidance, back about your but potential kind MLR a pressure because it than to think, it's interesting to Medicaid on of past, to the one you've go time MLR.

like because then that, And basis or a lower but time bit rates? something So kind something think on year, are higher you it points more most are what to to adjust including that to just pressure or or year? are be being trying because exactly guidance? you you lower if states I it's this in is you Thanks. to have like finer a you in, next about Higher would pressure guess build determined you've are exactly expect more understand XX little of it and put this thinking saying members year's how that, or set immaterial

it Kevin, I'll give to Mark.

haven't the into outperform not to our the range. think which range just Medicaid margins that an produces to the been continue outperforming We business, forecast continue the range, trend outperforming and but to we even go it's have prudent a end are that we we'll best-in-class industry all parsed factors specific and forecast of low not MCR for that

it So we a call the reversion mean. to

the increases. RSV that knowing citing due pressures acuity cost medical experienced a probably any the the shift retroactive forecasting of pressure with be acuity will an We're the be which right middle in an range, like then, rate any significant might for items shift of XX.X% COVID, and is to absorbed course, by flu, that business, of Medicaid

we forecasting continuing rather going forecast were somewhat to long-term So in I'm we Medicaid why range it. parse than not it, but of outperform the to middle our conservative that that's

That's exactly right.

we finished XX% year year. the last for at So an

reversion anticipates and flu, coming Iowa, attribute a mean any think in an in the to of My potentially redetermination. something that's forget, the bit not Choice attributing any Wisconsin. In to specifically to acquisition basis could mean. stores things of RSV, general, to in that's we've the guidance just to a mean, different little some there. the But But general, driver. that, We're reversion new the Don't basis conservatism, conversation there. acknowledging we points of along, all look, in don't specific enough. number about have XX.X%, Our had reversion we points we also our

you Now next also mentioned what happens year. maybe

out. will back-end play the any to manifest the be loaded way is this just starts year, redetermination to So given to extent going it the in of largely

just think of partners soundness lot I to as thing. concept much rates make anticipate state all that the time gives to with of us anticipate actuarial same our that but work sure it in a the of

you. Thank right. All

from with Bank. comes next The Hill question ahead. George Please go Deutsche

Hi, time working better around? it guys. this Is

Yes. Thank you, sir.

hear you. we Yes,

kind kind of you I commented out part my no think just question I just part around assume answer, that's all away was and on into. that going 'XX there's buckets that in this And touched XXXX. that of implementation costs cost fall guess to in they're the and typically you structure again, in but on, in no goes durable. Joe, repeats that could of of guys. break you, this Thank last was Okay. $X.XX I the the but

last your I'll question of answer first. part the

for service cost one-time continue people themselves. implementation and as that. to Nebraska, and course, nature. the in that the a than those Mark? which fixed for I we contract new $X.XX On many spend going once on And a need advance obviously major you hope times, implementations, technology future, implementation which are yes, are are to these of have Iowa, tongue businesses is of But stream, then, cost. I in California the revenue of not hire better said in can spent the not wins There the repeat -- cheek, in costs have should to part

build Right. just that. I'll on

about you staffing, about the way mostly fixed ahead it have up $X.XX, about component about day think is IT, to right? of a two-thirds the third of of think it, sort membership. a highly I variable, and staff So if We is of it one

think that's obviously, start it. to the revenue. it we So booking when ahead to way about us of It comes

of specifically. course, run goes The talked about it operating of What booking not is away into We've goes store we're yet. is, does $X.XX That costs. So we is revenue have margin I once wouldn't embedded the $X.XX $X.XX -- new earnings reason it say businesses. of after here. we anticipated same-store that these it

it. So one-third, the variable, $X.XX, to right fixed; two-thirds that's about think way

away into goes a it consumed the way of about think to new as becomes rate item, the one-time the It run Yeah. it. contracts but is

That’s helpful. Thank you.

with Please last Our question comes Jefferies. go David from Windley ahead.

Thanks want redetermination in as do for of morning. rates, that in will their redetermination they to progresses. few cycle taking you notice can will of the I Meaning, discussion Good a me. that willingness state's small these state or discussion that? ones. Do have next or my the around, question. you sense your I after the the has around hope hear In have to revisit have majority relatively they played rate short a on the out. urgency a

of changes, they're theoretical retrospective in to specifically. data result acuity has but driven. the rate that know there's possibility that And an don't in shift it aware prospective is the likely, all know rate also We that be changes. book, could we All

to has analyzed is and timing, has figure to be rate get mature. data a complete, the So point in out the people whether the reasonable data The room change will to to on a then claims have necessary. and

until So I it's is they're But know the to going don't it, I be to whether complete. entire would redetermination process driven. got look at wait data

the to complete, data and and be verifiable actionable. has it to has So

with states encouraging fact David, here. led a The will Mark. And also this somewhat that it's have me number to thought, is be these of proactive unprompted that

interesting. Okay. That's

as in that on whether to not. and medical distinction durable are more is Second any betting or that maybe question on you're post-COVID thoughts costs trends

utilization about So of things like that thinking type things. lower and ER

what experienced is medical as almost rate spiking, component, into basis. late as seem the more the as COVID have we've to to the where it certainly monthly the run it run costly and And a know of we I No, trends It million sort certainly in and lack Medicare rate volatility understanding rate. think is is pattern actually as long of long like stable, million a $XX -- the $XX infection cost costing fallen hits year is on a certainly more nice book. Medicaid inpatient evolved stays into that than the COVID the of,

pretty month. have a But a late cost services $XX into line sort to nice sight good We in year, into will million of us. of pattern million the $XX it those of what settled

or impact appetite? Has impacted And then like appreciate capital it I your valuation cadence -- side? sounds it very Does in your the robust. on still of on cost expected the pipeline environment the lastly, Joe, your comments M&A is change seller

at of not free We more measure were returns we all. we're our cash Obviously, capital. No, earning than before. weighted average cost against obviously the on now the

appetite want momentum hasn't caused So there's to for any think about becoming in and the no, counterparties less enterprise. Molina the speak of it market But of in of part drag. terms change a us to in the to

I had. all Thank you. That’s Great.

Molina call. and you for Healthcare's attending quarter session Thank question-and-answer our XXXX earnings fourth today's concludes presentation. This

disconnect. now may You