Molina Healthcare, Inc 10-K for FY2023

Molina Healthcare, Inc. (MOH)

10-K 2024-02-13 For: 2023-12-31

Added on April 10, 2026

About this 10-K

Molina Healthcare, Inc filed this 10-K on February 13, 2024, covering the fiscal year ended December 31, 2023 (FY2023).

Headline figures

Fiscal year ended December 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $34.07B; up 6.6% from $31.97B a year earlier
Net income: $1.09B; up 37.8% from net income of $792M a year earlier
Diluted EPS: $18.77; up 38.5% from $13.55 a year earlier

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Delaware						13-4204626
(State or other jurisdiction of						(I.R.S. Employer
incorporation or organization)						Identification No.)


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $0.001 Par Value	MOH	New York Stock Exchange


		Page

Part I
Item Number
1.	Business	3

1A.	Risk Factors	19

1B.	Unresolved Staff Comments	Not Applicable.

1C.	Cybersecurity	33

2.	Properties	34

3.	Legal Proceedings	34

4.	Mine Safety Disclosures	Not Applicable.

Part II

5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	34

6.	[Reserved]	Not Applicable.

7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37

7A.	Quantitative and Qualitative Disclosures About Market Risk	49

8.	Financial Statements and Supplementary Data	50

9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	Not Applicable.

9A.	Controls and Procedures	88

9B.	Other Information	91

9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	Not Applicable.

Part III

10.	Directors, Executive Officers and Corporate Governance	91

11.	Executive Compensation	91

12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	91

13.	Certain Relationships and Related Transactions, and Director Independence	91

14.	Principal Accountant Fees and Services	91

Part IV

15.	Exhibits and Financial Statement Schedules	92

16.	Form 10-K Summary	Not Applicable.


	Year Ended December 31,
	2023			2022

	(In millions, except per-share amounts)
Premium Revenue	$	32,529		$	30,883
Total Revenue	$	34,072		$	31,974
Medical Care Ratio (“MCR”) (1)	88.1		%	88.0		%
Net Income	$	1,091		$	792
Net Income per Diluted Share	$	18.77		$	13.55


	As of December 31,
	2023	2022



Medicaid	4,542,000	4,754,000


Medicare	172,000	156,000

Marketplace	281,000	348,000
Total	4,995,000	5,258,000


☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________ TO ________


	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)
October 1 - October 31	1,700	$	328.24	—	$	750,000,000
November 1 - November 30	—	$	—	—	$	750,000,000
December 1 - December 31	—	$	—	—	$	750,000,000
Total	1,700	$	328.24	—


Increase (Decrease) in Estimated Completion Factors	Increase (Decrease) in Medical Claims and Benefits Payable
(6)%	$	982
(4)%	654
(2)%	327
2%	(327)
4%	(654)
6%	(982)


(Decrease) Increase in Trended Per Member Per Month Cost Estimates	(Decrease) Increase in Medical Claims and Benefits Payable
(6)%	$	(342)
(4)%	(228)
(2)%	(114)
2%	114
4%	228
6%	342


			Page
Report of Independent Registered Public Accounting Firm			51
Audited Consolidated Financial Statements:
Consolidated Statements of Income			53
Consolidated Statements of Comprehensive Income			53
Consolidated Balance Sheets			54
Consolidated Statements of Stockholders’ Equity			55
Consolidated Statements of Cash Flows			56
Notes to Consolidated Financial Statements			58


						Incurred but not paid (IBNP) claims reserves

Description of the Matter						As of December 31, 2023, the Company’s liability for fee-for-service claims incurred but not paid (“IBNP”), comprised $2,901 million of the $4,204 million of Medical Claims and Benefits Payable. The Company’s IBNP liability is determined using actuarial methods that include a number of factors and assumptions, including completion factors, which seek to measure the cumulative percentage of claims expense that will have been paid for a given month of service as of the reporting date, based on historical payment patterns, and assumed health care cost trend factors, which represent an estimate of claims expense based on recent claims expense levels and healthcare cost levels. There is significant uncertainty inherent in determining management’s best estimate of completion and trend factors, which are used to calculate actuarial estimates of incurred but not paid claims.


How we addressed the matter in our audit						We obtained an understanding, evaluated the design, and tested the operating effectiveness of the Company’s controls over the process for estimating the IBNP liability. This included testing management review controls over completion and trend factor assumptions, and management’s review and approval of actuarial methods used to calculate IBNP liability, including the data inputs and outputs of those models.

						To test the IBNP liability, our audit procedures included, among others, testing the completeness and accuracy of data used in the calculation by testing reconciliations of underlying claims and membership data recorded in source systems to the actuarial reserving calculations, and comparing a sample of claims to source documentation. With the assistance of EY actuarial specialists, we evaluated the Company’s selection and weighting of actuarial methods by comparing the weightings used in the current estimate to those used in prior periods and those used in the industry for the specific types of insurance. To evaluate significant assumptions used by management in the actuarial methods, we compared assumptions to current and historical claims trends, to those used historically and to current industry benchmarks. We also compared management’s recorded IBNP liability to a range of reasonable IBNP estimates calculated independently by our EY actuarial specialists. Additionally, we performed a review of the prior period estimates using subsequent claims development, and we reviewed and evaluated management’s disclosures surrounding fee-for-service claims IBNP.


	December 31,
	2023		2022

	(Dollars in millions, except per-share amounts)
ASSETS
Current assets:
Cash and cash equivalents	$	4,848	$	4,006
Investments	4,259		3,499
Receivables	3,104		2,302
Prepaid expenses and other current assets	331		277
Total current assets	12,542		10,084
Property, equipment, and capitalized software, net	270		259
Goodwill and intangible assets, net	1,449		1,390
Restricted investments	261		238
Deferred income taxes, net	227		220
Other assets	143		123
Total assets	$	14,892	$	12,314

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Medical claims and benefits payable	$	4,204	$	3,528
Amounts due government agencies	2,294		2,079
Accounts payable, accrued liabilities and other	1,252		889
Deferred revenue	418		359
Total current liabilities	8,168		6,855
Long-term debt	2,180		2,176
Finance lease liabilities	205		215
Other long-term liabilities	124		104
Total liabilities	10,677		9,350
Stockholders’ equity:
Common stock, $0.001 par value per share; 150 million shares authorized; outstanding: 58 million shares at each of December 31, 2023, and December 31, 2022	—		—
Preferred stock, $0.001 par value per share; 20 million shares authorized, no shares issued and outstanding	—		—
Additional paid-in capital	410		328
Accumulated other comprehensive loss	(82)		(160)
Retained earnings	3,887		2,796
Total stockholders’ equity	4,215		2,964
Total liabilities and stockholders’ equity	$	14,892	$	12,314


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive (Loss) Income		Retained Earnings		Total
	Outstanding	Amount

	(In millions)
Balance at December 31, 2020	59	$	—	$	199	$	37	$	1,860	$	2,096
Net income	—	—		—		—		659		659
Common stock purchases	(1)	—		(2)		—		(120)		(122)








Other comprehensive loss, net	—	—		—		(42)		—		(42)
Share-based compensation	—	—		39		—		—		39
Balance at December 31, 2021	58	—		236		(5)		2,399		2,630
Net income	—	—		—		—		792		792
Common stock purchases	(1)	—		(5)		—		(395)		(400)








Other comprehensive loss, net	—	—		—		(155)		—		(155)
Share-based compensation	1	—		97		—		—		97
Balance at December 31, 2022	58	—		328		(160)		2,796		2,964
Net income	—	—		—		—		1,091		1,091









Other comprehensive income, net	—	—		—		78		—		78
Share-based compensation	—	—		82		—		—		82
Balance at December 31, 2023	58	$	—	$	410	$	(82)	$	3,887	$	4,215


	Year Ended December 31,
	2023			2022

	(In millions, except per-share amounts)
Premium revenue	$	32,529		$	30,883
Less: medical care costs	28,669			27,175
Medical margin	3,860			3,708
MCR (1)	88.1		%	88.0		%

Other revenues:
Premium tax revenue	1,069			873


Investment income	394			143
Other revenue	80			75

General and administrative expenses	2,462			2,311
G&A ratio (2)	7.2		%	7.2		%

Premium tax expenses	1,069			873

Depreciation and amortization	171			176
Impairment	—			208
Other	128			58
Operating income	1,573			1,173
Interest expense	109			110

Income before income tax expense	1,464			1,063
Income tax expense	373			271
Net income	$	1,091		$	792

Net income per diluted share	$	18.77		$	13.55

Diluted weighted average shares outstanding	58.1			58.5

Other Key Statistics:
Ending Membership	5.0			5.3
Effective income tax rate	25.5		%	25.5		%
After-tax margin (3)	3.2		%	2.5		%


	Year Ended December 31,
	2023						2022
	Premium Revenue		Medical Margin		MCR		Premium Revenue		Medical Margin		MCR

Medicaid	$	26,327	$	2,973	88.7	%	$	24,827	$	2,981	88.0	%
Medicare	4,179		388		90.7		3,795		437		88.5
Marketplace	2,023		499		75.3		2,261		290		87.2
Total	$	32,529	$	3,860	88.1	%	$	30,883	$	3,708	88.0	%


	Year Ended December 31,
	2023						2022
	Amount		PMPM		% of Total		Amount		PMPM		% of Total

	(In millions, except PMPM amounts)
Fee-for-service	$	21,415	$	342.25	74.7	%	$	19,703	$	318.55	72.5	%
Pharmacy	3,987		63.72		13.9		4,346		70.26		16.0
Capitation	1,651		26.39		5.8		1,637		26.47		6.0
Other	1,616		25.84		5.6		1,489		24.07		5.5
Total	$	28,669	$	458.20	100.0	%	$	27,175	$	439.35	100.0	%


	Year Ended December 31,
	2023		2022		2021

	(In millions, except per-share data)
Revenue:
Premium revenue	$	32,529	$	30,883	$	26,855
Premium tax revenue	1,069		873		787


Investment income	394		143		52
Other revenue	80		75		77
Total revenue	34,072		31,974		27,771
Operating expenses:
Medical care costs	28,669		27,175		23,704
General and administrative expenses	2,462		2,311		2,068
Premium tax expenses	1,069		873		787

Depreciation and amortization	171		176		131
Impairment	—		208		—
Other	128		58		61
Total operating expenses	32,499		30,801		26,751
Operating income	1,573		1,173		1,020
Other expenses, net:
Interest expense	109		110		120
Other expenses, net	—		—		25
Total other expenses, net	109		110		145
Income before income tax expense	1,464		1,063		875
Income tax expense	373		271		216
Net income	$	1,091	$	792	$	659

Net income per share:
Basic	$	18.91	$	13.72	$	11.40
Diluted	$	18.77	$	13.55	$	11.25
Weighted average shares outstanding:
Basic	57.7		57.8		57.8
Diluted	58.1		58.5		58.6


Assets acquired:
Current assets	$	96
Goodwill	126
Intangible assets	18
Other long-term assets	7
Liabilities assumed:
Medical claims and benefits payable	(96)
Amounts due government agencies	(19)
Accounts payable, accrued and other long-term liabilities	(58)
Net consideration transferred	$	74


	Fair Value		Life

	(In millions)		(Years)
Contract rights - member list	$	13	7
Trade Name	3		2
Provider network	2		10
	$	18


	Total		Level 1		Level 2		Level 3

	(In millions)
Corporate debt securities	$	2,732	$	—	$	2,732	$	—
Mortgage-backed securities	911		—		911		—
Asset-backed securities	365		—		365		—
Municipal securities	166		—		166		—
U.S. Treasury notes	40		—		40		—


Other	45		—		45		—
Total assets	$	4,259	$	—	$	4,259	$	—


	December 31, 2023				December 31, 2022
	Carrying Amount		Fair Value		Carrying Amount		Fair Value

	(In millions)
4.375% Notes due 2028	$	794	$	757	$	792	$	729
3.875% Notes due 2030	644		583		643		554
3.875% Notes due 2032	742		654		741		629
Total	$	2,180	$	1,994	$	2,176	$	1,912


	December 31, 2023
	Amortized Cost		Gross Unrealized				Estimated Fair Value
			Gains		Losses

	(In millions)
Corporate debt securities	$	2,781	$	16	$	65	$	2,732
Mortgage-backed securities	951		4		44		911
Asset-backed securities	376		1		12		365
Municipal securities	172		—		6		166
U.S. Treasury notes	40		—		—		40


Other	47		—		2		45
Total	$	4,367	$	21	$	129	$	4,259


	In a Continuous Loss Position for Less than 12 Months					In a Continuous Loss Position for 12 Months or More
	Estimated Fair Value		Unrealized Losses		Total Number of Positions	Estimated Fair Value		Unrealized Losses		Total Number of Positions

	(Dollars in millions)
Corporate debt securities	$	263	$	1	160	$	1,553	$	64	754
Mortgage-backed securities	123		2		98	549		42		283
Asset-backed securities	—		—		—	195		12		91
Municipal securities	—		—		—	117		6		116


Other	—		—		—	17		2		17

Total	$	386	$	3	258	$	2,431	$	126	1,261


	Operating		Finance
	Leases		Leases

	(In millions)
2024	$	24	$	34
2025	20		30
2026	14		26
2027	11		24
2028	9		25
Thereafter	50		194
Subtotal - undiscounted lease payments	128		333
Less imputed interest	(23)		(107)
Total	$	105	$	226


	December 31, 2023						December 31, 2022
	Cost		Accumulated Amortization		Carrying Amount		Cost		Accumulated Amortization		Carrying Amount

	(In millions)
Contract rights and licenses	$	520	$	357	$	163	$	507	$	279	$	228
Provider networks	59		29		30		57		24		33
Trade names	22		7		15		19		5		14
Total	$	601	$	393	$	208	$	583	$	308	$	275


	Year Ended December 31, 2023
	Medicaid		Medicare		Marketplace		Consolidated

	(In millions)
Medical claims and benefits payable, beginning balance	$	2,815	$	452	$	261	$	3,528
Components of medical care costs related to:
Current year	23,749		3,802		1,545		29,096
Prior years	(395)		(11)		(21)		(427)
Total medical care costs	23,354		3,791		1,524		28,669
Payments for medical care costs related to:
Current year	20,999		3,293		1,323		25,615
Prior years	2,069		431		234		2,734
Total paid	23,068		3,724		1,557		28,349
Acquired balances, net of post-acquisition adjustments	82		14		—		96
Change in non-risk and other provider payables	261		(1)		—		260
Medical claims and benefits payable, ending balance	$	3,444	$	532	$	228	$	4,204


	Year Ended December 31, 2022
	Medicaid		Medicare		Marketplace		Consolidated

	(In millions)
Medical claims and benefits payable, beginning balance	$	2,580	$	404	$	379	$	3,363
Components of medical care costs related to:
Current year	22,097		3,390		1,972		27,459
Prior years	(251)		(32)		(1)		(284)
Total medical care costs	21,846		3,358		1,971		27,175
Payments for medical care costs related to:
Current year	19,655		2,944		1,746		24,345
Prior years	1,966		361		343		2,670
Total paid	21,621		3,305		2,089		27,015
Acquired balances, net of post-acquisition adjustments	12		—		—		12
Change in non-risk and other provider payables	(2)		(5)		—		(7)
Medical claims and benefits payable, ending balance	$	2,815	$	452	$	261	$	3,528


	Year Ended December 31, 2021
	Medicaid		Medicare		Marketplace		Consolidated

	(In millions)
Medical claims and benefits payable, beginning balance	$	2,129	$	392	$	175	$	2,696
Components of medical care costs related to:
Current year	18,321		2,970		2,652		23,943
Prior years	(182)		(39)		(18)		(239)
Total medical care costs	18,139		2,931		2,634		23,704
Payments for medical care costs related to:
Current year	16,284		2,573		2,291		21,148
Prior years	1,601		340		139		2,080
Total paid	17,885		2,913		2,430		23,228
Acquired balances, net of post-acquisition adjustments	205		(8)		—		197
Change in non-risk and other provider payables	(8)		2		—		(6)
Medical claims and benefits payable, ending balance	$	2,580	$	404	$	379	$	3,363


Incurred Claims and Allocated Claims Adjustment Expenses							Total IBNP		Cumulative number of reported claims
Benefit Year	2021		2022		2023

	(Unaudited)		(Unaudited)
	(In millions)
2021	$	24,167	$	23,979	$	23,912	$	18	133
2022			27,459		27,128		77		163
2023					29,096		2,803		153
					$	80,136	$	2,898


Cumulative Paid Claims and Allocated Claims Adjustment Expenses
Benefit Year	2021		2022		2023

	(Unaudited)		(Unaudited)
	(In millions)
2021	$	21,148	$	23,871	$	23,894
2022			24,345		27,051
2023					25,615
					$	76,560


	RSAs	Weighted Average Grant Date Fair Value		PSUs	Weighted Average Grant Date Fair Value
Unvested balance, December 31, 2022	511,105	$	237.10	312,830	$	193.09
Granted	294,604	277.37		470,284	233.50
Vested	(224,269)	210.22		(328,998)	124.98
Forfeited	(45,993)	261.71		(43,742)	261.01
Unvested balance, December 31, 2023	535,447	$	268.41	410,374	$	286.77


	Number of Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual term

		(Per share)		(In millions)		(Years)
Stock options outstanding as of December 31, 2022	5,000	$	33.02
Exercised	(5,000)	33.02
Stock options outstanding, vested, and exercisable as of December 31, 2023	—	—		$	—	0.0


			MOLINA HEALTHCARE, INC.

			By:						/s/ Joseph M. Zubretsky
									Joseph M. Zubretsky
									Chief Executive Officer (Principal Executive Officer)


Signature						Title

/s/ Joseph M. Zubretsky						Chief Executive Officer, President and Director
Joseph M. Zubretsky						(Principal Executive Officer)

/s/ Mark L. Keim						Chief Financial Officer
Mark L. Keim						(Principal Financial Officer)

/s/ Maurice S. Hebert						Chief Accounting Officer
Maurice S. Hebert						(Principal Accounting Officer)

/s/ Barbara L. Brasier						Director
Barbara L. Brasier

/s/ Daniel Cooperman						Director
Daniel Cooperman

/s/ Stephen H. Lockhart						Director
Stephen H. Lockhart

/s/ Steven J. Orlando						Director
Steven J. Orlando

/s/ Ronna E. Romney						Director
Ronna E. Romney

/s/ Richard M. Schapiro						Director
Richard M. Schapiro

/s/ Dale B. Wolf						Chairman of the Board
Dale B. Wolf

/s/ Richard C. Zoretic						Director
Richard C. Zoretic


*			Management contract or compensatory plan or arrangement.
**			Certain portions of this agreement have been omitted in accordance with Item 601(b)(10) of Regulation S-K. A copy of any omitted portion will be furnished to the Securities and Exchange Commission upon request. The location of the redacted confidential information is indicated in the exhibit as “[redacted]”.
+			Portions of this exhibit have been omitted pursuant to a request for confidential treatment filed with the Securities and Exchange Commission under Rule 24b-2. The omitted confidential material has been filed separately. The location of the redacted confidential information is indicated in the exhibit as “[redacted]”.


Name			Jurisdiction of Incorporation
2028 West Broadway, LLC			Delaware
Central Health Plan of California, Inc. ++++++			California
MHAZ, Inc.*			Arizona
Molina Healthcare Data Center, LLC			New Mexico
Molina Healthcare of Arizona, Inc.			Arizona
Molina Healthcare of California			California
Molina Healthcare of Florida, Inc.			Florida
Molina Healthcare of Georgia, Inc.*			Georgia
Molina Healthcare of Illinois, Inc.			Illinois
Molina Healthcare of Indiana, Inc.*			Indiana
Molina Healthcare of Iowa, Inc.			Iowa
Molina Healthcare of Kansas, Inc.*			Kansas
Molina Healthcare of Kentucky, Inc.			Kentucky
Molina Healthcare of Louisiana, Inc.*			Louisiana
Molina Healthcare of Michigan, Inc.			Michigan
Molina Healthcare of Mississippi, Inc.			Mississippi
Molina Healthcare of Nebraska, Inc.*			Nebraska
Molina Healthcare of Nevada, Inc.			Nevada
Molina Healthcare of New Mexico, Inc.			New Mexico
Molina Healthcare of New York, Inc.			New York
Molina Healthcare of Ohio, Inc.			Ohio
Molina Healthcare of Oklahoma, Inc.*			Oklahoma
Molina Healthcare of Pennsylvania, Inc.*			Pennsylvania
Molina Healthcare of Puerto Rico, Inc.			Puerto Rico/Nevada
Molina Healthcare of Rhode Island Holding Company, Inc.			Delaware
Molina Healthcare of Rhode Island, Inc.+*			Rhode Island
Molina Healthcare of South Carolina, Inc.			South Carolina
Molina Healthcare of Tennessee, Inc.*			Tennessee
Molina Healthcare of Texas, Inc.			Texas
Molina Healthcare of Texas Insurance Company			Texas
Molina Healthcare of Utah, Inc.			Utah
Molina Healthcare of Virginia, LLC			Virginia
Molina Healthcare of Washington, Inc.			Washington
Molina Healthcare of Wisconsin, Inc.			Wisconsin
Molina Healthcare of Wisconsin CMO, Inc.*			Wisconsin
Molina Clinical Services, LLC			Delaware
Molina Care Connections, LLC			Texas
Oceangate Reinsurance, Inc.			Utah


Name			Jurisdiction of Incorporation
SWH Holdings, Inc.			Delaware
Senior Health Holdings, LLC++			Delaware
Senior Health Holdings, Inc.+++			Delaware
AlphaCare Holdings, Inc.++++			Delaware
Senior Whole Health of New York, Inc.+++++			New York
Senior Whole Health, LLC++++			Delaware
The Management Group, LLC			Wisconsin
Universal Care, Inc.++++++			California