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Molina (MOH) Wins Deal to Serve Michigan's Medicaid Members
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Molina Healthcare, Inc.’s (MOH - Free Report) health plan unit, Molina Healthcare of Michigan, recently received a Comprehensive Health Care Program contract from the Michigan Department of Health and Human Services (MDHHS). The award imparts MOH the capacity to cater to the healthcare needs of six service regions of the state.
The new Medicaid contract is likely to commence from the very beginning of October 2024 and will run for a period of five years. It will also have the option of three extensions for one year each.
The contract win will allow Molina Healthcare to extend enhanced healthcare coverage across a state that has around 2 million Medicaid beneficiaries. Therefore, it will further serve as a means to strengthen the footprint of the health insurer across Michigan.
The strength of its Medicaid business has fetched numerous contract wins from time to time. As evidence of its business prowess, Molina Healthcare of Michigan was among the nine health plans selected to provide healthcare coverage for Michigan’s massive Medicaid customer base. Two of the other health insurers awarded the same Medicaid contract by the MDHHS are Centene Corporation (CNC - Free Report) and reportedly, UnitedHealth Group Incorporated (UNH - Free Report) .
Last year, MOH’s New Mexico subsidiary received a three-year Medicaid managed care contract from the New Mexico Human Services Department. Also, it won a four-year Medicaid contract from the Indiana Family and Social Services Administration in March 2023 and remains well-poised to serve roughly 100,000 Medicaid LTSS members. Both contracts are backed with extension options.
Such contract wins reinforce the faith that members have in a particular health insurer and may serve as a means to retain existing customers as well as attract new ones. This, in turn, is expected to increase the overall membership and subsequently, drive premiums. Premiums remain the most significant contributor to a health insurer’s top line.
As of Dec 31, 2023, Medicaid membership of Molina Healthcare was 4.5 million but the redetermination process somewhat impacted the metric. Premiums from this business line improved 6% year over year in 2023. For 2024, management estimates Medicaid membership to be around 5.1 million, which reflects an increase of 12% from the 2023 figure. The business is expected to gain from the addition of an estimated 650,000 members in 2024 as a result of its recent contract wins.
In addition to relying on contract wins, Molina Healthcare also follows an inorganic growth route for further strengthening its Medicaid business. Contract wins and numerous acquisitions make management optimistic about achieving long-term premium revenue growth in the range of 13-15%.
Shares of Molina Healthcare have gained 24.5% in the past year against the industry’s 9.1% decline. MOH currently carries a Zacks Rank #3 (Hold).
Organon’s earnings surpassed the Zacks Consensus Estimate in two of the last four quarters and missed the mark twice, the average beat being 5.06%. The consensus estimate for OGN’s 2024 earnings indicates a rise of 2.4% while the same for revenues suggests an improvement of 1% from the corresponding year-ago reported actuals.
The consensus estimate for OGN’s 2024 earnings has moved 1% north in the past 60 days. Shares of Organon have declined 25.4% in the past year.
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Molina (MOH) Wins Deal to Serve Michigan's Medicaid Members
Molina Healthcare, Inc.’s (MOH - Free Report) health plan unit, Molina Healthcare of Michigan, recently received a Comprehensive Health Care Program contract from the Michigan Department of Health and Human Services (MDHHS). The award imparts MOH the capacity to cater to the healthcare needs of six service regions of the state.
The new Medicaid contract is likely to commence from the very beginning of October 2024 and will run for a period of five years. It will also have the option of three extensions for one year each.
The contract win will allow Molina Healthcare to extend enhanced healthcare coverage across a state that has around 2 million Medicaid beneficiaries. Therefore, it will further serve as a means to strengthen the footprint of the health insurer across Michigan.
The strength of its Medicaid business has fetched numerous contract wins from time to time. As evidence of its business prowess, Molina Healthcare of Michigan was among the nine health plans selected to provide healthcare coverage for Michigan’s massive Medicaid customer base. Two of the other health insurers awarded the same Medicaid contract by the MDHHS are Centene Corporation (CNC - Free Report) and reportedly, UnitedHealth Group Incorporated (UNH - Free Report) .
Last year, MOH’s New Mexico subsidiary received a three-year Medicaid managed care contract from the New Mexico Human Services Department. Also, it won a four-year Medicaid contract from the Indiana Family and Social Services Administration in March 2023 and remains well-poised to serve roughly 100,000 Medicaid LTSS members. Both contracts are backed with extension options.
Such contract wins reinforce the faith that members have in a particular health insurer and may serve as a means to retain existing customers as well as attract new ones. This, in turn, is expected to increase the overall membership and subsequently, drive premiums. Premiums remain the most significant contributor to a health insurer’s top line.
As of Dec 31, 2023, Medicaid membership of Molina Healthcare was 4.5 million but the redetermination process somewhat impacted the metric. Premiums from this business line improved 6% year over year in 2023. For 2024, management estimates Medicaid membership to be around 5.1 million, which reflects an increase of 12% from the 2023 figure. The business is expected to gain from the addition of an estimated 650,000 members in 2024 as a result of its recent contract wins.
In addition to relying on contract wins, Molina Healthcare also follows an inorganic growth route for further strengthening its Medicaid business. Contract wins and numerous acquisitions make management optimistic about achieving long-term premium revenue growth in the range of 13-15%.
Shares of Molina Healthcare have gained 24.5% in the past year against the industry’s 9.1% decline. MOH currently carries a Zacks Rank #3 (Hold).
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A Stock to Consider
A better-ranked stock in the Medical space is Organon & Co. (OGN - Free Report) , currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Organon’s earnings surpassed the Zacks Consensus Estimate in two of the last four quarters and missed the mark twice, the average beat being 5.06%. The consensus estimate for OGN’s 2024 earnings indicates a rise of 2.4% while the same for revenues suggests an improvement of 1% from the corresponding year-ago reported actuals.
The consensus estimate for OGN’s 2024 earnings has moved 1% north in the past 60 days. Shares of Organon have declined 25.4% in the past year.