MOH - Earnings call 3 2023 | Molina Healthcare, Inc.

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Operator

Good morning, and welcome to the Molina Healthcare Third Quarter 2023 Earnings Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Joe Krocheski, Senior Vice President of Investor Relations. Please go ahead.

Joseph Krocheski

Good morning, and welcome to Molina Healthcare's Third Quarter 2023 Earnings Call.

Molina's Keim. CEO, are our Zubretsky; today Mark CFO, me President Joe and and Joining release our available press market Relations A announcing closed after was website. yesterday the distributed and is on Investor third our quarter earnings after will available replay for call, be the conclusion days. Shortly this a of XX earnings numbers The the access replay the to in are release.

the and For presentation, made that XXXX, you the refer remarks can not we initial the A these we our earnings are call. measures October you On XXXX with of have found all be this reconciliation listen Thursday, to call, the will quarter most to subsequent measures GAAP release. who of third updated remind measures. certain comparable in those directly rebroadcast non-GAAP this earnings today, of as to of been of XX,

M&A turn over our Joe to remarks, will SEC. filings Officer, our factors the open statements our report During the limited RFP related prepared not earnings could call from current with risk SEC certain Zubretsky. we are the Medicaid After our call making filed acquisitions to power and of in annual certain and our redeterminations, guidance, in our the to subject growth, be now your will outlook, risks listeners That our results with expectations. We activity, cause Form to call, embedded advise including, take our and review recent we forward-looking and well Form our to but materially actual Listeners Executive Joe? statements that all uncertainties. and will cautioned completion strategy differ XX-K XXXX our regarding our awards Form listed our XXXX X-K of recent discussed margins. Chief long-term the our risk our XX-Q factors questions. I statements as the to, the revenue forward-looking are growth and as

Joseph Zubretsky

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

strategy results of Medicaid outlook. XXXX, our year full financial and for XXXX profitable our the our premium Our for growth third our quarter sustaining redeterminations, guidance, and initiatives growth XXXX

me XX% of Let adjusted we or on our share earnings quarter year-over-year $X.X $X.XX quarter night, Last performance. revenue. for start growth reported the of billion per with premium third diluted third

execution Our sustaining strategy results reflect the our growth. for continued of profitable

XX.X% margin, Our management. third and cost medical continued operating quarter adjusted MCR consolidated X.X% pretax and demonstrate strong

year-to-date squarely is year-over-year margin and to continues of bolster in range. pretax with profile. income already growth Our range investment consolidated strong XX.X% high of long-term We the earnings and our our above our a line that target end the X.X% MCR is note margin

Medicaid performed Our expected. business as we

with was our is of net expectations outpatient, experience MCR in-home effect higher cost perform long-term services, trends reported several our with pricing XX.X% acuity which of results states, shifts our MCR adjustment was continues reported assumptions, came bids. And and finally, Medical quarter, corridors XXXX with continue we XX.X% meaningful. well. expectations. Medicare's of a professional appropriately XX.X%. we in in the are target addressed risk including below Our trend utilization our believe In to the in improved cost range. in in Medical marketplace our redetermination of our and all performance line within MCR we within a to of

first stable summary, our silver half quarter performance. small results on third strong Our strategy build is working. In our

per long-term full least our consistent third at of of adjusted quarter Turning per with affirming share now we XXXX target XX%. XXXX or XX% growth our to earnings year our results, XX% earnings guidance. our are growth on to share Based $XX.XX year-over-year, guidance

seasonality and conservatism. Our and fourth our quarter performance outlook takes full year-to-date of for account considerations

redeterminations. Medicaid Now a few about words

of net quarter. Despite offset from member of have the Growth begun Iowa from the Medicaid quarter membership the and third unchanged XXX,XXX all Medicaid the As our redetermination second was closing acquisition initiation decrease Wisconsin of nearly our the Choice impact states My of contract and disenrolling the redeterminations enrollment. the July, members. driven the activity, by new

While we Mark it believe many retention to XX% will the our from billion for in to lower $XX next for premium XX%. revenue impact and remarks. uncertainties in now unchanged assumption ultimate prudent of address on revenue redetermination, year remain implications outlook for our his

the several overall combined who expectations. Although Mark the MCR of to will members with was Medicaid average. corridor When on within the more the during medical be in more his continues remarks. profile impact cost redeterminations portfolio states, left have our Medicaid than favorable of our provide color roles offsets

strategy on proceeding our an will to as recent our and the The for XXXX X, $X premium which new our contract, nearly double planned current California wins. start in January profitable annual Turning date. growth, of size growth and our sustaining in implementation membership state is initiatives update for our the now billion approximately add state beginning with a of

numerous the With incremental footprint. entrants expectations. July, attracting STAR+ launched successfully our membership members, our share, in retaining of plan for state driving the expect Texas share In grow, entire July, to approximately premium we approximately XXX,XXX with revenue contract of low Also we program, million. our finalized new our consistent we Iowa in annual likely health serving our existing $XXX

again we annual XXXX, launch will of announced Mexico. will million. In X, implementation successful New we serving premium state beneficiaries tracking and Our August, Nebraska is contribute estimated on in of be the once that Medicaid to January a $XXX

to million contract new in produce premium and annual mid-XXXX the approximately revenue. begin $XXX expect We

state available XXXX, and deemed as product state readiness requirements in have January Medicare required. the India, the the In for met due by X, contract XXXX, X, not not to January Medicaid DSNP a our on us becoming to

as to we our initial did requirement. proud but won meet one skills, are disappointed testimony readiness proposal have to We award the not that

premium year. of revenue billion with us and Our as wins changing in reprocurements retention, growth and these in of XXXX, agenda forecasted. all new on is Indiana approximately for combined in full the assumptions Even previously to redetermination development contract track keep $XX

closing Wisconsin the premium acquisition. Choice regulatory is billion process My Shifting to transaction of approval Recall, Medicare announced our planned. proceeding adds acquisition the Bright $X September, The this and members MLTSS XX,XXX M&A for revenue. mostly we activity. In as approximately in the early approximately annual

work to and remaining first management to to on XXXX. continue by continue closing quarter expect of with satisfying the conditions We close bright the

to ahead XXXX. looking Now

close Assuming Medicare the executing additional of all revenue initiatives. XXXX, XX% remain $XX line a acquisition, even represents of approximately strategic growth, billion to which we building timely before provide on year-over-year Bright known in blocks confident the of premium that sight of

positive moment. factors, has which While which developed. year, catalysts next to Mark speak yet going fully are also there are There a some many into in earnings will not

with will we February. our earnings guidance you As in specific provide customary, is

annual Day the our rate to we that centerpiece Investor year, which long-term per long-term at is our Recall this XX%. announced share XX% earlier compound financial earnings of of growth targets, a

next we rate With compound into the target that over earnings annual to years. visibility the trajectory, our we have commitment growth comfortable our are reaffirming X in

our results. As worked would to like tirelessly who always, I to management deliver thank team these every day

keep and Reynolds has position our Bacon; team adding lead Mark, Jim Deb Dave Recall further our under execute In we Executive and President, to X our of evolved the Our veterans, will and shaping the with and flagship now Vice our of Jim Officer. President Jim Chief Operating lineup Vice Keim Medicaid title Molina Senior business. strategy. each with growth to that to Mark Woys of stage pace Executive recently, promoted both most

across team, and our executive platform, are with Not our talent privilege thanks up who growth. our dedicated the service. will a serve our In We for are members. It with all nearly nation but want is Marketplace his my of and high-quality our colleagues enterprise the I company to support be and and Medicare throughout group to businesses performance our Mark our also with only to vital to additional our adding quarter. to substantial such management very to extend my Bruso access scaling in are success. this thanks summary, deliver leaving to integration our we all committed capable healthcare to are of XX,XXX special professionals. pleased our associates the

attractive will our call turn some Mark generate profile With on maintained margin to unprecedented the to growth. process, over redetermination additional during that, have Mark? financials. this double-digit I while We the continuing color industry-wide for

Mark Keim

of I'll the on drivers also balance an guidance additional with our the I'll morning, provide XXXX good Thanks, earnings. thoughts details performance, quarter Joe, earnings. third everyone. premium and of embedded redeterminations, and on XXXX and Beginning early Today, update our our results. sheet some discuss quarter revenue XXXX some third and outlook our

reported was XX.X%. redetermination we adjusted our MCR included acuity per quarter, states. a MCR the net from a several in moderate The For shifts of the of MCR at impact and of In $X.XX corridors XX.X%. consolidated effect reported earnings Medicaid, share

categories York long-term rate expectations quarter-to-quarter our were State. target was slightly elevated Our with a In also line reported major in medical in the was fluctuations. cost MCR third Medicaid MCR and adjustment Medicare, our above segment, XX.X%, New Across provisional quarter our largely normal trend range. our retroactive from

we quarter, a emerging inform our the utilization we in-home bids outpatient, of in of first professional During saw services. time and increased to benefit the trends quarters these Recall, XXXX observed and in second and continuation design.

bid XXXX produce target margins our year. confident will are We next

business MCR our margins. In our return This to reported Marketplace, was reflects target pricing XX.X%. strategy to result this strong

silver to year. year-to-date target risk and for and Based the renewal exceed us we positioned adjustment. mid-single-digit Our focus on are our helps our enhanced performance well drive members strong on performance, margins to

XXXX on Marketplace Also the to due risk financial that of in in our receivable participant quarter major Marketplace, one we charge recorded program adjustment a state. from nonrecurring in the Texas difficulties

we made While to to shortfall collecting pursue of regulatory receivable best the collections, our will the full estimate in due paths to us. we have continue

it Given its have earnings. excluded nature, onetime adjusted unusual from our and we

new was business for adjusted result with expectations. contracts several a quarter contract in as ratio wins new our well Our G&A beginning as new This spending in includes Iowa for the consistent implementation XXXX. X.X%,

Turning sheet. now balance to our

unchanged remains quarter-over-quarter subsidiary We the reflecting for our a used trailing for X.Xx Net approximately ample $XXX ratio balance $X.X billion. Debt capital approximately additional amount cash was of EBITDA at dividends X.Xx acquisition, quarter end and ratios just XX.X%. strong. our growth parent and quarter investment. our leverage cash company Wisconsin XX.X%, low at to cash, debt-to-cap capital these fall foundation our similar parent in with harvested position million company the XX-month the unchanged of of capacity and and Our at leaving at and

reserves. to Turning

due claims payable with the approach of plan. to levels new consistent reported with and position. our we at confident QX normal temporary Wisconsin of and inclusion have consistent was been the this Days the would reserve be Adjusted reserve impact, in DCP remains the elevated quarters, XX, levels. to in end for strength Our Choice of quarter our our Iowa QX continue My from prior and

additional and XXXX on Now guidance some embedded color earnings. our

guidance year $XX.XX. adjusted full least at our affirming are We XXXX of per earnings share

includes and now guidance which expectations results, conservatism. quarter the remaining considerations year were seasonality quarter fourth and full for largely third Our effectively with consistent our reflects our

New of approximately new share comprised run store includes achieving wins contract. our at of earnings embedded Texas $X per AgeWell, previously $X wins Mexico, amount expected new share for per Choice remains and for business. $X.XX contract recent now STAR+ New acquisitions. the replacing same accretion Bright share The Health our from includes $X.XX and the $X.XX unchanged acquisition Indiana for $X.XX per of earnings My the for combination and full contract rate The from Medicare

Turning to redeterminations.

XX% on we As ineligibility. approximately of financial and and of have meet have due rather criteria of of X/X understand our retention been actual Across verification than promptly over tracking systems calls, maximize turned, our built discussed to who members to been any disenrollments monitoring we which to reviewed states, the procedural of also redeterminations. impacts prior have eligibility members robust

approximately As the a approximately due grow. In to we to the members these seeing redeterminations, the XXX,XXX expect impact are estimated quarter, XX% of nearly and those being figure of to reconnected, we result, lost numbers we bringing XXX,XXX. year-to-date we net turned

currently Given the likely and expect CMS and membership of we increasing will decreasing losses. terminations reconnects reported procedural high state interventions, number continue

in rate we we who potential with seeing seek Throughout both team increasing to Medicaid warm marketplace lose marketplace the our eligibility, to members interact enrollment ours former and of an enroll As are transfer competitors, products. for process, our our members, in them we product. that

our to see average. of members terminated that have We on Turning medical margin redeterminations. than the lower observations costs the portfolio impact

shifts However, overall in the our combined impact well and expectations the our of remains several the acuity within year. with corridors effect outlook from for MCR states, net

or working state emerged, as of we fiscal impact in the necessary. rates with normal partners rate retrospectively, course, have to prospectively year either reflect the redeterminations, off-cycle Of cycle, if our are trends ensure

September, of through our with our adjustments. In with draft included XX considering an rates retroactive states the final end XX acuity have or of mid-cycle several adjustment

our with revenue on starting premium Lastly, XXXX, some outlook. additional color

to the approximately approximately billion recent These Mexico of sight XXXX our As from or organic STAR+ largely revenue of blocks $XXX $XX XX% line our blocks billion. deliver from million that $X have our premium with growth we from of year. approximately Joe guidance growth building to in $XX that we premium $X.X wins our include projected approximately footprint, billion expected mentioned, plus XXXX billion contracts current state of and the premium for replacing Texas contract building are expected New had next Indiana previously the in

billion To we this, of for of of known is pharmacy acquisition. Wisconsin impact billion drivers My and [indiscernible] approximately the add Bright growth carve-outs. and Partially California premium Choice $X.X $X.X acquisition-related the of consisting offsetting these Medicare redeterminations

redetermination activity seen assumption our we revised a have conservative forecasting. original approach generally have We XX% retention to XX% and the reflecting to earlier

marketplace $XXX and cross-sell we strong billion our will OEP revenue in in premium XXXX through We lower expected that expect for this an XXXX. outlook maintained will increasing result. $XX assumption changing this effectively SEP premium revenue gains by in While million, offset

the Finally, the that XXXX We thoughts following our XXXX will influence early some elements on earnings. of drivers earnings trajectory. positively note

have baseline earnings which of solid We off to grow. XXXX a

$X.XX to meaningful Our future continue provide new and unchanged earnings remain our potential. into growth store earnings embedded at visibility

a be recording continue we income as costs will performance year, go of $X.XX We XXXX result to Medicare our as our business begin And of likely strong. new implementation wins. away this impact on believe revenue business Investment new of bids. will share premium a the our improve

close remaining XXXX. move XXXX variables there into However, are we some as and

another activity redetermination observed. outlook quarter better informed of XXXX First, with will our be

impacting XX% confident for adjustments actuarial premium to appropriate rates will satisfactory. have are are of but Medicaid that XXXX We rates note been still that we have including do soundness the revenue generally principle Second, finalized our of unknown, prevail, been date acuity redeterminations.

quarter In earnings very year targets. and review. we we our to from the acquisition first remarks. Operator, summary, performance contribution ready pleased still our Bright we growth with have the established This questions. are now are under concludes the third Finally, achieving take momentum is our prepared toward

Operator

[Operator Instructions]

from question Research. comes first Our Josh Nephron from Raskin

Joshua Raskin

that exchanges of trends is around Does that, then early they've in coming little that then early it on coming And what up a curious into I'm the seeing right if pick terms view out and the of your in that redeterminations the product last insured I'm quarter, said and coming for to last be your assume in risk. fair would want Medicaid. that change XXXX. low growth members think They're probably previously been And curious I thread understand in. just from 'XX? this exchange experience, be you're less better terms relatively you premiums I of and retention. of they would growth to

Joseph Zubretsky

redetermination to and growing. monthly in the it It the to and a seeing comes when exchange month until -- we and averaging process happened Josh, special enrollment business XX,XXX increase an to period, increased are special enrollment, special the enrollment. it's a X,XXX month was X,XXX

the from a place into cases, flow business. We are of from not that membership footprint, our only business, isn't of competitively getting competitors as Medicaid marketplace as have redeterminations, do book a -- every our book but in product competitors. competitive have are but many priced in we product So from we Medicaid

book where getting competitively Medicaid own priced, we're membership competitors marketplace our getting So from other membership business. we're we're and of from Medicaid

we pleased growth. So we're not membership Marketplace that did forecast pretty

we're result and seeing Mark, case, membership to there. add? anything our to upside get to continue We a nice

Mark Keim

members to the quarter lost Medicaid. net added I XX,XXX in about Sure. in Josh, XXX,XXX through we the compared SEP

XX,XXX Medicaid it, good, you came rate book, someone So is how XX%. XX% Medicaid else's rate put some conversion our of on book the conversion to call if pretty many that or from

like that marketplace. run in in they're coming at portfolio much within pretty not anything at, rate our it coming looks demand the or We're pent-up On seeing like they're rate that.

so So and far good implications for pretty the margins to looking the we're volume. us. future pickup liking are And those

Joseph Zubretsky

members losses with our to of any high, likely rate and you XXX,XXX lose percentage. averaging to and of moving eligibility. who . The is, to now those And about means specifically result. data ill-advised We and extrapolate they process. states membership Many by follow first front-loaded top-loading, Josh, more procedural it's the question, current second part thing to to your we asked mean the that the the have retention terminations date, say members of XX% that eligibility, XX% of the fact we reconnect were the been XX% targeted lost has just

terms now members it So we would pickup well. as number we I the suppose whatever of during and that data, and XXX,XXX likely increase just the XXX,XXX we're would that we lose increased pandemic follow the is in mean seeing XXX,XXX. to said we originally of has likely would that that gained marketplace And

Operator

next Bank Fischbeck of question from comes The America. from Kevin

Kevin Fischbeck

I to Medicaid that way the corridors It seems far what talked you like then as in it like and business, as caught but you like guess risk it came do corridors? offset the X Is coming time of with about your things quantify QX And sounds net questions. One, have you MA line bid. how within can without the as still saying been MLR we risk in there you would in pressure expectations. the that, any that. worse, commentary, mentioned is for of also you're

if expectations, how be could So bids QX be than you a submitted MLR I'm figure to higher but for June? trying in in out not XXXX, problem

Joseph Zubretsky

But point on MLRs the always here of we've On Mark industry for and medical an performance. big minimum pre-COVID I'll of at benchmark made this margin that the as of said Investor MLR, we to Day, set sort more Medicaid corridors kick color. a it and

many the those in corridors, form into in we're to routinely have our the of which XXX% tier. deep benchmarks, a gives state that those meaning we're a in outperformed We of And them, in liability states. to of rise payback some the

said, having year acts whether it's that whatever of whether knew the reason, the that performance that developing trend redetermination, acuity whether modest concept shift flu from absorb of it it's before financial the COVID, planned. is, it's acuity sort exactly trend or as an of being rates up, during would deteriorates, with beginning fulfilling today. on and pick act bed quarter credit been So the their actuarial of for manageable and cushion rates, for shift, said baked the this what's a process assumptions it pressure always acuity to if any as that as liability would to it we've adjustments, meaning reason, the first financial trend, into as takes shift We this and acuity soundness. And cushion the point put of that's first underlying exactly MCR, full our process rate until liabilities the the is inflection happening

Mark Keim

just around increases underlying to corridor that, note, quarter-to-quarter the in booking and put And you're corridor But third situation, expense to expense still corridor meaningful in important booked times little a our just color I normal at book trend I'll Right. less it's quarter. expense. if

like it's significant and still completely So not we corridor offset. not We're a those the have ultimate expense still liabilities. been corridor on has booking

Now us keeps the in well corridor best-in-class current cycle it's currently which and for in then fiscal about new running. us remember, to rate be and we works that replenishes margins, And mode we're year. our works as the cycle. position that tend Joe always means corridor mentioned, rate But new the

Joseph Zubretsky

in in was It We're quarter margins and still MCR, high that. in the your at XXs pretax business. to on year. to be that which admittedly the hot was Kevin, X.X% part on target ran in XX.X% should produce running X% twice the the Medcare second question earlier of the

X% running to and of that visits outpatient, believe getting year-over-year, slightly our increased earlier part right to is inflections in fully but And observed screenings on business year year, expect are first than had medical side cost X% we were pricers. We and to of these third trend but LTSS we we PCP caught pretax. than we hours, captured to now services margins at the the in the in be a X% conservative and quarter the our professional we to some whether higher quarter. yes, which we're captured back, in members trail XXXX. behavioral expected, were in-home is both on side medical X% view All the assigned bids saw the believe in XXXX X% trends in, that in some of we the higher Our hours target trend, back conservative we've the Medicare services, pretax and the

Operator

The question from from next comes Goldman Sachs. Nathan Rich

Nathan Rich

Joe, bit on then Thanks the little I year growth X you to for a the biggest on just point earnings of years. of detail growth the next maybe next that the more I from over XX% XX% guess clarification. could your to go EPS on is into drivers range? detail view kind you that just next impact the year. of for think average XX% to quick the sort and could And a unknowns relative XX% framed

adjustment New possible rate you do an is be see it On York, the forward that more a had retroactive to going to potentially in to And quarter? impact this the favorable? adjustment in what potential quantify for

Joseph Zubretsky

Sure, I'll and some blocks Mark. think the it remarks. then kick provide I And the gave in prepared to of framing his Mark building Nathan.

we're we're That's revenue First and billion margins. a best-in-class outlook next year year. where for very growth producing XX% year-over-year in still foremost, the $XX in confident

starting we're say solid high baseline. a earnings very XXXX quality, would I First, with

is there base an on the believe We a rates and both new our of contract does. into high, new into interest then will in. of bond, the next remain going year so of they're will are that term rates portfolio the $X.XX interest in wins, certainly generally outlook grow short-term be costs the Those high to share of going continue Embedded fluctuate even But to organically $X.XX a in is earnings reverse. Fed store, year. that both next it's rates mind year. We next with to locked our all intermediate what catalyst investable implementation M&A bear end footprint. And half

specific XXXX spoken. our to XX% in develop like The rates on more ultimate is for been our know completely how We loss actually forecast And before revenue from our the we'd quarter. assumption need Medicaid has that revenue been our on year. of our next redetermination X rates it about in fourth a To share XX% does have date, we emerge giving line of next experience increase we Medicaid per year. the did expectation, with see variables earnings as rates Those see of sound. to how

been acuity with adjustments. satisfied We've the

those As acuity were in the the out XX Mark resident that see XX rates want know we said, about, to we how adjustments the of but of book. already rates develop on XX%

So variables those are the going next into year.

at means of $XX.XX. earnings will we cited baseline, long-term than which per you your XX% to anything the to Mark, higher the that XX% of growth share question, XX% to rate up XXXX committed beginning XX% share XXXX, be earnings the are confident XXXX As and add? to per off

Mark Keim

gets is little other But several rates a specific is that place only of XX estimate about quarter. our optimistic New Medicaid asked this revisited. little constantly some you I'm moment, in I'd phenomenon. York. it's to bit And one the reason The Yes. adjustment. rate XX.X% know, we I adjustment you around the the that retro uncertain We the thing, bps the think in better. related Nathan, at for as an get a that booked in reported, states,

Operator

from question comes Lake next Research. The Wolfe Justin from

Justin Lake

to previous. were on I to had of development the high things X relative amount touch kind a fair wanted in third of year prior abnormally The quarter you

having want to Joe, margin the income. on less was your set income of at target little didn't rates of a before "Geez, is secondly, that take target is investment looking are pay could higher a on still when of margin, left sound investment potential with That your then these might we there? And segments earnings to states outside investment because I business really mentioned you because earnings income and actuarially say, conversations you that's the confirm, have income. they I'm drove curious just the it. historically, investment rates. the calculation." states the like understanding bit which margin the my they curious, Are as Just behind with impact you're and maybe

Joseph Zubretsky

focus medical income second rates, that's outside the some call also trend rare margin generally but or infrequent. focus cases, is not which In but we load, almost a entirely the Investment answer I'll generally and question only on conversation what of first. they G&A on assumptions.

identify On the make. points a routines things should not postpaid our of Mark PYD, and of a definition, confident team it from payment you a is balance integrity to very providers. perspective, for . Two and From By in relates that accounted are I'll because our prior paid to because recover for that and report. period both large we're business development in kick any is it where That sheet. periods. prepaid have the postpayment share period prior strength that prior I'll development you we

state in period quarter to to PYD, that went to a point muted have a don't impact. is, Second the note where a existed in terms it we of forget, core prior periods. And against then of financial liabilities was relating some liability of extent its these

Mark Keim

was fairly the pulled and our well. right. That's largely part amount corridors. Integrity operations become prior exactly a year that release offset you earnings by fundamental we of it Payment such from has do That

days period to tempting point see to about strength concerned it's to more our development, like reserving XX growth current current prior -- when DCP, Now I'd position make they did the strong that. point versus be Look, reserve the we the earnings, revenue. somehow of to offset something

function. current So as integrity payment position reserving I prior through good this about year exercise but well our the feel of strength our

Operator

from Our Calvin JPMorgan. Sternick from next question comes

Calvin Sternick

here if those to know I past, in it's investing just going seeing the you're membership on window, you there you're little are what expected? gears afterwards, cohort to editions about noise of in I'm bit. early move efforts auto-assign much or the I'm up switching in what XX- algorithms. if what fruit just here net to Medicaid too realized with initiatives to they're talked who but curious relative members wondering redeterminations. bear still haven't the or Maybe just eligible And a quality seeing that the XXX-day reconnected still in you've looking tell for like too within

Joseph Zubretsky

That is given of I answered and your statement little May we've that supposition, your to because don't XXX theoretical obviously correct. is But you or June. gap was to last data seen member the realize think throws for to question very to going days, go a the termination. supposition the script redetermination it, doctor is then with no that in your XX full in retroactivity have and service back reconnect the to pharmacy a the they service or

requiring So in average will member be portfolio back come the we around they'll services. suspect that because Anything somewhere add Mark? to

Mark Keim

the within to for reconnect, on we we and though they up coverage, call set what think realized they of lost XXX X XX the to the everybody, that premium. categories, as just When seamless never back about and contacted lost talk we pick about agency most days, coverage retro are we they got is to stage Yes. them tend

X, mentioned, dynamic. we're Joe as Now only this X X, months into

We that better And people typical are a XX- gap. we're in assign through are auto-assigns to on those reconnects auto getting XXX-day window better number the the outside to through process. the will and in of now. only call come algorithms, emerge a So starting with They states.

recapture reconnects our about good with feel the those I of gap. So

Calvin Sternick

nitpicking a coming a follow-up, ask rates bit generally lower. a but just this maybe little said New that can satisfactory. and little are if you asked I against I is the just bit, Was I If a York, hedge in apologize

in you as other have of if expected. you Just you're good as book something seeing on or curious rest generally if are on things some aren't side the line what the that better, the

Joseph Zubretsky

guest. retroactive entire obviously, the use because we rate were industry us word the that think we I not advocating a reporting is a but only generally,

about term. actuarially that sound have XX% know the to been But rates was that in the that for business, for we adjustments XX% be consider impact of Medicaid about our rates the So revenue have what acuity. of for the for we XXXX part, the actuarially included reasonable most and reason

Operator

The Baxter from Stephen next Wells question comes from Fargo.

Stephen Baxter

just to discussion. I back to acuity come wanted the

have in you do higher much make good I mentioned guess having how point? that will how expectations like line what I you that I population was think does of disenrollments, can feel think I you with sort past and at you over that? then there data impacted this guess, there mentioned your it challenging at the visibility it to the guess, to level couple of And you like that? like of the see this for utilizations this years the the you at I line look point. about running you like with look people. reconnect point do expected, Or have rest those you in of back stayers. MLRs the support be think for procedural

at it's that's a wondering I'm kind point of working data just period? based So if on still this or

Mark Keim

in reconnects closer So the themselves, average. on seeing the stayers back them to portfolio come average, the we're

both I Now pretty the reconnects, these I But over benchmarks about didn't but of phenomena. MLR your feeling to is such have years, really X problem historical question of am we about the with last seamless a appreciate and the data, the X good gap.

Joseph Zubretsky

of PHE, The XX% by the redetermination many way people -- than the that, business the produced portfolio on business. as That's fewer to be -- a can have tracking the leave, of the and important a issue leaving other a through on to that during Durational leaving track XX% to to lever to business all the there's XX%, make using and end is average. and this time it. And because not they to That's phenomenon Medicaid point average one. this and important The we joining. just it's maybe because book out than XX.X% in It's portfolio they they it new People really lower is more services last and than And way need the of is services, environment, here MCR. acuity the higher on average, the average. the come between twice in works. forecast they're works. able point pause stayers joiners

So this and the reconnect joiners has certain very analysis points, come is process. it always process. procedural tracking extrapolate to early the is likely expected durational phenomenon. We've high, been higher point data as you of the acuity. to these front-loaded had well. for a termination states and than levers, growing. But anybody stayers with And We And really rate rate suggested, It made the so being ill-advised earlier. is the the back mathematically we I in understand mechanisms any

Operator

Fidel Stephens. comes from question from Next Scott

Scott Fidel

about of meaningfully come sort does XXXX sort optimal levels. let's your bright positioning be right that just if going into performance levels give exist that sort a maybe talk current asset factoring us maybe say, Medicare just below of if sense now in, that on some with bid you bit of Would how thinking comfort your the protections about appreciate you're outlook of, of I guess, the acquiring. can you're and the to downside the performance then your And that and

Joseph Zubretsky

California, in from So state taking to the obviously, billion Medicare Medicaid doubling Scott, we're the for business. it with $X our us, strategic of very nearly very in business to a $X our a complement where we're size pleased billion business business, a important

a of very confident pricing ultimately, doing the rate embedded about the perspective, us strategic it a we're works, earnings excited is but we're per from to in way earnings than there, share, accretion of a to given normal it. In take $X So our so. cycle run CMS is rationale going longer get level little

I'll stop financial their company. material a public This their performance. a to operations. about They're is commenting short on

it when I of don't them variables the have allow we into into And We we on performing. in that we we when on the visibility because know they're close how said doing. But how year performing going know be it do first So one would next they're don't how will will is perform it. year. report to where yet

doing. that earnings Medicare I'll on of business and how report soon, their is inappropriate. performance because they'll commenting you stop get the view to would can as be short a Obviously,

Operator

A.J. Our question UBS. Rice question from comes next from next

Albert Rice

least know low us the what MCR Sometimes as a you've about their you year-to-date quarter utilization. sounds Can and people of to Obviously, sense for and the exchanges. exchanges. I a significant see limits, at deductible cetera, et any more. you've been maybe ask pretty fourth in you conservatism, exchanges baked running the baked not you've got to repriced It like that I'm not believe like take you bit some it have your to in. Just hit uptick? active a give you Why in you margin Are that sounds lot allowing was line comment like made business year a missing premium something. in? of 'XX, more growth, And product? you're maybe little you've this look it hitting pretty product targets well. and pretty as the you're I seems ahead think given approach year, we next Or easily growing that expecting

Joseph Zubretsky

So yes, anything. aren't question. the for you missing Thanks

about asked one membership growth. about and Let one questions, me of MCR you terms in it frame the X

at guidance the built in half we the obviously, roughly end quarter, third in of back MCR, second when gave the that On quarter. we the we And MCR. XX% an outperformed

put end below is fourth for of We for silver low the given continue which to the points XXX year, X% volatility range. XX% pretax quarter, produce bake in would for and us which stable the the full pool. the for the risk potential something at in mid-XXs in to year. is work This to going X.X% business inherent margins Small, the the basis

this I think we have right.

your now grow year. early it plan to he marketplace our give are grow counties it are modestly. add it single-digit the XX% versus you Anything one on all some, mid-single-digit this do to year. In product, mentioned stat which really #X Mark? producing Silver pricing we which The prepared It that's pretax our but year measurably next I'll just we next and Now priced very will is margins. with and to modestly, be high pretax measuredly important. mentioned point, year. We product, the his this grow plan business that #X remarks and margins, XX% our or to Mark We flagship view read competitiveness. will our of in least plan do at it, and to

Mark Keim

in about this is only adamant small, has been thing J. the I'd product. Joe add stable and silver

last thought It the risk on stabilized is we strangely of we more for with them risk set looks where on we position. out, pool than has I a means mentioned year a before rates expecting the pricing margins our growing seeing our margin expectations. we're the June, result some us we're or on June, of much get to like our I'm XX%, volume next now discipline which #X our when the XX% committed set conform county of that as dropping #X, rest is Joe players discipline. so pool And which stabilizing means to with at to more better last competitive

outlook. good we're So feeling about that

Operator

next question Deutsche Hill from comes The Bank. George from

George Hill

process? be of And might way retrospective rate adjustments owed -- respect you how trued that with to to any how you are the simplistically I to be guys think much that you there kind you is speaking, quantify far rate up guys guess guys from historically? I the both that guess, adjustments talked didn't need about, money through

Mark Keim

take say data-driven I'd course, But to and there's by been them. benefits rates data book receptive committed play contractually position out. that where come. when to And We'll is and let now on I'll to partners. I'll our George, that. retro with Obviously, no there we're actuarial discussion. in our comment haven't is I'm in compelling. the that handful working process, And those a right our The of if the state they with team state

Operator

from comes question Taylor from Cowen. next Gary The

Gary Taylor

embedded $X.XX think of the I sort that was of Indiana I $X.XX. on which $X.XX reiterated just or have that only earnings, had you might was portion X a I been of questions. think One historically

sure like to I to mark it make understanding profitability sounds the sort embedded at much fair? question embedded the just maybe the in And if now realized earnings that guess, terms that keep that XXXX. of how $X.XX. just biggest wanted year get agree, of you also, will bright So I of is in backfilling right earnings Is what would X

Joseph Zubretsky

an number. it Yes, earnings, And Indiana as and now removed right. First question, Joe. I with we very embedded but said, finalized. New period we're Texas accretion absolutely you're that is this the terms target to and is saying know year. X-year just replaced earnings that Mexico again, We from per contract to earnings achieve that just embedded we're yes, of going $X expansion what confident closing earnings as in share the in margins Gary, we're per inherit get And forecast a to share first don't after can bright the we

Mark Keim

year. next is is for probably through company what themselves, outlook their working And OEP still that into given they're going

comment us one. it's situation definitely given the early too So that on for to

Operator

question last Fitzgerald. Sarah The comes from James from Cantor

Sarah James

XX is a maybe split why the in states the that clarification either coming versus started corridors able pattern the X exchanges back those you're were or how cost redeterminations there, the you that determine outliers? timing in in rejoiners, any see can that And acuity didn't the of then are on in, to Medicaid? with One put that what's back of us the able X adjustments, structured risk in coming they rate to give is how coming maybe on the you

Joseph Zubretsky

I'll second point is on cover on it make first but for the question. the your Mark I'll to kick these,

think Medicaid that of include the word before possible incepts only X which our the mind, what it appropriately department even project for need redetermination it haven't. Bear I any acuity in rate to the the some shift makes in yet started, actually we cycle process not would to starting be. as

states. Mark? or retro yet. adjustment introduce who a So word we'll get I mid-cycle those And the a maybe would knows, X on

Mark Keim

term seamless Sarah, Medicaid reconnects, on the and the is a use reconnects, both a purely with that concept. we gap,

earlier, Medicaid picking members the to the closer So separately, seeing XX,XXX then strictly up in we're I mentioned that is in I within third -- SEP marketplace. as that we're through XX% quarter. mentioned to XX% going

The data-driven fiscal started fiscal states then sales a years retro Joe getting be -- but The year story. And concept the component, have periods. yet, impacts a there's matter seen the is membership that of a things the So timing all few with cases, actuarial we to in the appropriate different of means And a how it obviously, enterprise, on where concept. timing exactly of driving folks as in when into the consistent would quickly data overall develops it's definitely just an XX process. and that. is X only haven't timing right, helps a the of data of

us majority the already vast feel we And have those concessions. that So given about good process. again,

unfold. about good feel we So process the how will

Operator

you This has today's Thank concludes attending our concluded. question-and-answer session. conference now The for presentation.

may disconnect. You now

Molina Healthcare (MOH) 26 Oct 232023 Q3 Earnings call transcript