Molina Healthcare (MOH) UBS Global Healthcare Conference summary

Earnings outlook

• 2026 EPS guidance is $5.25; building blocks point to at least $9.50 for 2027, before any Medicaid MLR improvement, and are not formal guidance.

• The 2027 bridge includes $4 of embedded earnings, $0.75 from Marketplace reaching break-even, and a $0.20–$0.25 California UIS headwind, taking the illustrative $10 to about $9.75.

• Of the $4 embedded earnings targeted for 2027, $1.50 comes from Florida CMS Kids reaching at least break-even, $1 from exiting general-issue Medicare, and $1.50 from G&A efficiencies.

• The remaining $5 of embedded earnings is expected in 2028–2029; revenue projections include natural growth from $42B in 2026 to $45B in 2027.

• Medicaid MLR improvement beyond the 92.6% 2026 guidance level would add upside to the 2027 earnings building blocks; typical annual earnings are 55%–70% front-end loaded, not a 2027 forecast.

Medicaid rates and membership

• 2027 Medicaid rate outlook is 6% versus 5.5%–6% medical cost trend; if trend is at the low end, the 50 bps rate-trend gap would benefit MLR.

• Core Medicaid trend is running at a stable 4.5%, with LTSS, behavioral health, office visits and high-cost drugs among the key cost areas; membership acuity shift adds to trend.

• Markets are estimated to be underfunded by 300 bps, with rates expected to address some existing underfunding as well as new core trend; states are beginning to incorporate acuity adjustments.

• The 2027 revenue framework assumes a 6% membership decline from OB3; membership-related acuity is estimated to add 1%–1.5% to trend, on top of core trend.

• Initial work-rule impacts may be softer after states gained flexibility on frailty definitions, members received six months to document frailty, and plaintiff states received until May 1 to begin implementation; the 6% decline assumption remains pending February guidance.

Contracts and Florida CMS Kids

• 90% of reprocurements were retained and 80% of new procurements won; state RFP evaluation increasingly checks performance references across states.

• Georgia and Texas awards under protest were removed from the 2027 revenue build and shifted to 2028 for conservatism; readiness costs and capital commitments are already in estimates.

• Florida CMS Kids launched in October 2026; Q4 is expected to show a $1 loss, 99% MLR and 5% pre-tax loss, including 2% of one-time reserve costs.

• Florida CMS Kids is expected to reach at least break-even in 2027, requiring roughly 300 bps improvement; management expects more than half from medical costs and the remainder from G&A.

• New-footprint execution should improve over time, while the October-to-October rate cycle affects results; management expressed confidence in the overall 2027 break-even path.