Molina Healthcare revised its financial outlook for the year and now expects to generate higher earnings as profit grew in the second quarter on increased membership.
The healthcare insurer’s premium revenue increased 18% in the second quarter compared with the prior-year period as the Long Beach, California-based insurer saw membership increase 9% to 5.1 million members.
Molina reported that net income grew 34% to $248 million in the quarter.
Insurers have benefited from relaxed policies enacted during the pandemic that have helped swell enrollment in Medicaid. The federal government has barred states, which contract with insurers like Molina, from kicking members off Medicaid coverage during the duration of the public health emergency.
Molina reported a medical loss ratio of 88.1% for the quarter, down from 88.4% in the prior-year period. The medical loss ratio is an important metric that measures how much is spent on medical care.
The MLR decline missed analysts’ expectations. But the payer did beat Wall Street forecasts on other key metrics like earnings and revenue.
Centene, Molina’s rival, narrowed its second-quarter loss to $172 million down from $535 million in the prior-year period. Centene also raised its financial forecast for the year.
In other news, Molina said it renegotiated its pharmacy benefit management contract with CVS Caremark, securing more favorable pricing. Executives did not provide more details on the terms of the deal. Pharmacy spending accounts for about 15% to 20% of Molina’s medical spend.
Also, Molina executives said the company would make remote work permanent and, as a result, will cut its real estate footprint by two-thirds.