Molina Healthcare Inc (MOH) — Agentic Tribune

PART I

Item 1. BUSINESS

OVERVIEW

ABOUT MOLINA HEALTHCARE

Molina Healthcare, Inc., a FORTUNE 500 company, provides managed healthcare services under the Medicaid and Medicare programs, and through the state insurance marketplaces (the “Marketplace”). Molina was founded in 1980 as a provider organization serving low-income families in Southern California and reincorporated in Delaware in 2002. We served approximately 5.5 million members as of December 31, 2025, located across 21 states.

Our business footprint, as of December 31, 2025, is illustrated below.

FINANCIAL HIGHLIGHTS

	Year Ended December 31,
	2025			2024
	(In millions, except per-share amounts)
Premium Revenue	$	43,052		$	38,627
Total Revenue	$	45,426		$	40,650
Medical Care Ratio (“MCR”) (1)	91.7		%	89.1		%
Net Income	$	472		$	1,179
Net Income per Diluted Share	$	8.92		$	20.42

_______________________

(1)Medical care ratio represents medical care costs as a percentage of premium revenue.

OUR SEGMENTS

We currently have four reportable segments consisting of: 1) Medicaid; 2) Medicare; 3) Marketplace; and 4) Other.

The Medicaid, Medicare, and Marketplace segments represent the government-funded or sponsored programs under which we offer managed healthcare services. The Other segment, which is insignificant to our consolidated results of operations, includes long-term services and supports consultative services in Wisconsin and the

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commercial portion of the business acquired in connection with the ConnectiCare transaction that closed effective February 1, 2025.

Refer to Notes to Consolidated Financial Statements, Note 16, “Segments,” for further information, including segment revenue and profit information.

SEGMENT MEMBERSHIP

The following table summarizes our membership by segment as of the dates indicated:

	As of December 31,
	2025	2024
Medicaid	4,568,000	4,890,000
Medicare	262,000	242,000
Marketplace	655,000	403,000
Other	6,000	—
Total	5,491,000	5,535,000

SEGMENT PREMIUM REVENUE

The following table presents our consolidated premium revenue by segment for the periods indicated:

	Year Ended December 31,
	2025		2024
	(In millions)
Medicaid	$	32,240	$	30,579
Medicare	6,235		5,542
Marketplace	4,487		2,506
Other	90		—
Total	$	43,052

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Financial statements

data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .

From 10-Q filed 2026-07-23 (period ending 2026-06-30).

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (“MD&A”)

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Form 10-Q”) contains forward-looking statements. We intend such forward-looking statements to be covered under the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, or Securities Act, and Section 21E of the Securities Exchange Act of 1934, or Securities Exchange Act. Many of the forward-looking statements are located under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements provide current expectations of future events based on certain assumptions, and all statements other than statements of historical fact contained in this Form 10-Q may be forward-looking statements. In some cases, you can identify forward-looking statements by words such as “guidance,” “future,” “anticipates,” “assumes,” “believes,” “embedded,” “estimates,” “expects,” “growth,” “intends,” “plans,” “predicts,” “projects,” “will,” “would,” “could,” “can,” “may,” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Form 10-Q include, but are not limited to, statements regarding our future results of operations and financial position, industry and business trends, legislative and regulatory developments and their potential impact, business strategy, strategic transactions and commercial arrangements, market and offering changes, membership, medical cost and market trends and our objectives for future operations. Readers are cautioned not to place undue reliance on any forward-looking statements, as the future is inherently unpredictable. Thus, forward-looking statements are not guarantees of future performance and the Company’s actual results may differ significantly due to numerous known and unknown risks and uncertainties.

Those known risks and uncertainties include, but are not limited to, the risk factors identified in the section titled “Risk Factors” in our 2025 Annual Report on Form 10-K, including without limitation risks related to the following matters:

•Medicaid, Medicare, or Marketplace capitation rates that are insufficient to fully cover our medical care costs and/or the rates of utilization and the health acuity status of our members, including without limitation inpatient and outpatient costs, pharmacy costs, and behavioral health care costs, and insufficient rate increases that do not keep pace with or catch up to the medical care cost trend;

•federal or state legislative or regulatory changes, including changes effected by, or negative public perceptions of the Medicaid program created by, the One Big Beautiful Bill Act, or changes effected through Executive Orders or HHS/CMS administrative agency rulemaking with regard to the Medicaid, Medicare, or Marketplace programs, including potential reductions in Medicaid funding, political pressures directed at the health insurance industry regarding managed care and prior authorization practices, advocacy for and potential implementation of aspects of the so-called Great Healthcare Plan, changes to the federal matching percentage paid to states, the implementation of Medicaid work requirements, block grants or per capita caps, the reduction or elimination of provider taxes, uncertainty regarding the status or effect of Marketplace subsidies, the implementation of new program integrity rules, insufficient Medicare Advantage rate adjustments, new rules pertaining to Medicare Risk Adjustment Data Validation, or amendments of the Affordable Care Act (“ACA”);

•budget pressures on state governments, CMS’ withholding of FMAP payments to states based on allegations of fraud, and states’ efforts to reduce rates and limit rate increases to avoid budget deficits;

•evolving Marketplace dynamics including issues impacting enrollment, special enrollment periods, member choice, premium subsidies, broker rates, risk adjustment estimates and results, Marketplace plan insolvencies or receiverships, and the potential for disproportionate enrollment of higher acuity members;

•the success of our efforts to retain existing or awarded government contracts, the success of our bid submissions in response to requests for proposal, our ability to identify merger and acquisition targets to support our continued growth over time at projected levels, and our ability to realize the full amount of our embedded earnings;

•the success of the scaling up of our operations in new states in connection with request for proposal wins, including our new Florida Kids program contract and operations, and the satisfaction of all readiness review requirements under the new Medicaid contracts;

•our ability to integrate our acquisitions and realize expected benefits and limit our liabilities as projected;

•subsequent adjustments to reported premium revenue based upon subsequent developments or new information, including retroactive Medicaid rate adjustments in a state or changes to estimated amounts payable or receivable related to Marketplace risk adjustment;

•effective management of our medical costs, and the accurate estimation of incurred but not reported or paid medical costs across our health plans;

•our ability to predict with a reasonable degree of accuracy utilization rates;

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•cyber-attacks, ransomware attacks, or other privacy or data security incidents involving either ourselves or our contracted vendors, that result in an inadvertent unauthorized disclosure of protected information or operational delays;

•the ability to manage our operations, including maintaining and creating adequate internal systems and controls relating to authorizations, approvals, provider payments, and the overall success of our care management initiatives;

•operational improvements, efficiencies, and cost savings that are less than anticipated, or that result in unforeseen consequences, from our investments in artificial intelligence (“AI”) administrative tools and initiatives;

•the impact of our working in a remote work environment;

•our receipt of rates adequate to support increasing pharmacy costs, including costs associated with specialty drugs and costs resulting from formulary changes that allow the option of higher-priced non-generic drugs;

•the interpretation, implementation, and estimates of amounts owed for federal or state medical cost expenditure floors, administrative cost and profit ceilings, premium stabilization programs, profit-sharing arrangements, and risk adjustment provisions and requirements;

•the interpretation and implementation of at-risk premium rules and state contract performance requirements regarding the achievement of certain quality measures, and our ability to recognize revenue amounts associated therewith;

•the transition of Medicare-Medicaid pilot programs in California, Illinois, Michigan, Ohio, South Carolina, and Texas serving those dually eligible for both Medicare and Medicaid, the increasing integration of Medicare and Medicaid programmatic and compliance requirements, and the extension or incorporation of federal Medicare requirements developed by CMS into state-administered Medicaid programs;

•changes in our annual effective tax rate due to federal and/or state legislation, or changes in our mix of earnings and other factors;

•the efficient and effective operations of the vendors on whom our business relies;

•complications, member confusion, or enrollment backlogs related to the renewal of Medicaid coverage;

•fraud, waste and abuse matters, including the recent expressions of a federal crackdown on Medicaid fraud in certain of the states in which we operate, government audits, reviews, investigations, or comment letters, and any fine, sanction, enrollment freeze, debarment, corrective action plan, monitoring program, or premium recovery that may result therefrom;

•the success of our providers, including delegated providers, the adequacy of our provider networks, the successful maintenance of relations with our providers, the accuracy of our provider directories incidental to provider turnover and network changes, and potential medical or pharmaceutical supply shortfalls suffered by our providers incidental to the implementation of tariffs;

•approval by state regulators of dividends and distributions by our health plan subsidiaries;

•high dollar claims related to catastrophic illness;

•the favorable resolution of litigation, arbitration, or administrative proceedings consistent with our expectations;

•the greater scale and revenues of our health plans in California, New York, Texas, and Washington, and risks related to the concentration of our business in those states;

•the failure to comply with the financial or other covenants in the Credit Agreement (as defined below) or the indentures governing our outstanding senior notes;

•the availability of adequate financing on acceptable terms to fund and capitalize our expansion and growth, and to meet our general liquidity needs;

•the failure of a state in which we operate to renew its federal Medicaid waiver;

•risks associated with vaccine hesitancy and the potential for a new epidemic or pandemic, including risks presented by the flu, measles, or other contagious diseases;

•changes generally affecting the managed care industry, including any new federal or state legislation that impacts the business space in which we operate, or negative perceptions that may arise about managed care practices or government healthcare programs;

•increases in government surcharges, taxes, and assessments;

•the impact of inflation on our medical costs and the cost of refinancing our outstanding indebtedness;

•the unexpected loss of the leadership of one or more of our senior executives; and

•increasing competition and consolidation in the Medicaid or general healthcare sector.

Each of the terms “Molina Healthcare, Inc.” “Molina Healthcare,” “Company,” “we,” “our,” and “us,” as used herein, refers collectively to Molina Healthcare, Inc. and its wholly owned subsidiaries, unless otherwise stated. The forward-looking statements in this Form 10-Q are based upon information available to us as of the date of this Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive

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inquiry into, or review of, all potentially available relevant information. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Form 10-Q. The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.

This Form 10-Q and the following discussion of our financial condition and results of operations should be read in conjunction with the accompanying consolidated financial statements and the notes to those statements appearing elsewhere in this report, and the audited financial statements and Management’s Discussion and Analysis appearing in our 2025 Annual Report on Form 10-K.

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OVERVIEW

SECOND QUARTER 2026 HIGHLIGHTS

We reported net income of $60 million, or $1.19 per diluted share, for the second quarter of 2026, which reflected the following:

•Membership of 4.9 million at June 30, 2026, which decreased 820,000, or 14%, compared with June 30, 2025, primarily due to general market contraction in Medicaid, the expiration of our Medicaid Virginia contract, and a decrease in Marketplace membership resulting from our product and pricing strategy;

•Premium revenue of $10.2 billion, which decreased 6% compared with the second quarter of 2025, mainly reflects the impact of lower membership, partially offset by rate updates;

•Consolidated medical care ratio (“MCR”) of 92.2% compared with 90.4% for the second quarter of 2025, as we continue to navigate a challenging medical cost environment;

•General and administrative expense (“G&A”) ratio of 6.7%, compared with 6.2% for the second quarter of 2025, reflecting the impact of lower premium revenues and continued operating discipline; and

•Pre-tax margin of 0.8%.

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CONSOLIDATED FINANCIAL SUMMARY

The following table summarizes our consolidated results of operations and other financial information for the periods indicated:

	Three Months Ended June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
	(In millions, except per-share amounts)
Premium revenue	$	10,244		$	10,868		$	20,416		$	21,496
Less: medical care costs	9,440			9,829			18,710			19,308
Medical margin	804			1,039			1,706			2,188
MCR (1)	92.2		%	90.4		%	91.6		%	89.8		%
Other revenues:
Premium tax revenue	505			431			1,009			819
Investment income	101			106			199			214
Other revenue	24			22			46			45
General and administrative expenses	724			711			1,503			1,485
G&A ratio (2)	6.7		%	6.2		%	6.9		%	6.6		%
Premium tax expenses	505			431			1,009			819
Depreciation and amortization	40			58			79			106
Impairment	—			—			93			—
Other	20			25			48			50
Operating income	145			373			228			806
Interest expense	54			48			108			91
Income before income tax expense	91			325			120			715
Income tax expense	31			70			46			162
Net income	$	60		$	255		$	74		$	553
Net income per share – Diluted	$	1.19		$	4.75		$	1.46		$	10.19
Diluted weighted average shares outstanding	51.3			53.7			51.2			54.3
Other Key Statistics
Ending Membership	4.9			5.7			4.9			5.7
Effective income tax rate	33.5		%	21.5		%	38.1		%	22.7		%
Pre-tax margin (3)	0.8		%	2.8		%	0.6		%	3.2		%

________________________

(1) MCR represents medical care costs as a percentage of premium revenue.

(2) G&A ratio represents general and administrative expenses as a percentage of total revenue.

(3) Pre-tax margin represents income before income tax expense as a percentage of total revenue.

CONSOLIDATED RESULTS

NET INCOME AND OPERATING INCOME

Net income in the second quarter of 2026 amounted to $60 million, or $1.19 per diluted share, compared with $255 million, or $4.75 per diluted share, in the second quarter of 2025. Net income in the six months ended June 30, 2026 amounted to $74 million, or $1.46 per diluted share, compared with $553 million, or $10.19 per diluted share, in the six months ended June 30, 2025.

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Operating income decreased to $145 million in the second quarter of 2026, compared with $373 million in the second quarter of 2025. Operating income in the six months ended June 30, 2026 decreased to $228 million, compared with $806 million in the six months ended June 30, 2025.

The change in operating income was mainly due to the impact of lower premium revenue, the increase in MCR, and the $93 million impairment charge related to our planned exit of the MAPD product in 2027 that was recorded in the first quarter of 2026.

PREMIUM REVENUE

Premium revenue decreased $624 million, or 6%, in the second quarter of 2026, when compared with the second quarter of 2025, and decreased $1.1 billion, or 5%, in the six months ended June 30, 2026, when compared with the six months ended June 30, 2025. The lower premium revenue in both periods reflects the impact of lower membership, partially offset by rate updates. See further discussion in “Reportable Segments—Segment Financial Performance,” below.

MEDICAL CARE RATIO

The consolidated MCR in the second quarter of 2026 increased to 92.2%, compared with 90.4% in the second quarter of 2025, or 180 basis points, and the consolidated MCR in the six months ended June 30, 2026 increased to 91.6%, compared with 89.8% MCR for the six months ended June 30, 2025, or 180 basis points. The increase in both periods reflects a higher MCR in all of our segments, as we continue to navigate a challenging medical cost environment. See further discussion in “Reportable Segments—Segment Financial Performance,” below.

The impact of prior year reserve development in the six months ended June 30, 2026 was mostly absorbed by minimum MLRs and medical cost corridors.

PREMIUM TAX REVENUE AND EXPENSES

The premium tax ratio (premium tax expense as a percentage of premium revenue plus premium tax revenue) was 4.7% and 3.8% for the second quarter of 2026 and 2025, respectively, and 4.7% and 3.7% for the six months ended June 30, 2026 and 2025, respectively. The current year ratio changes were mainly due to state mix changes in our Medicaid segment.

INVESTMENT INCOME

Investment income decreased to $101 million in the second quarter of 2026, compared with $106 million in the second quarter of 2025, and decreased to $199 million in the six months ended June 30, 2026, compared with $214 million in the six months ended June 30, 2025. The decrease was mainly attributable to a decline in prevailing interest rates and investment yields.

OTHER REVENUE

Other revenue amounted to $24 million in the second quarter of 2026, compared with $22 million in the second quarter of 2025, and totaled $46 million in the six months ended June 30, 2026, compared with $45 million in the six months ended June 30, 2025. Other revenue mainly includes service revenue associated with long-term services and supports consultative services we provide in Wisconsin.

G&A EXPENSES

The G&A expense ratio was 6.7% in the second quarter of 2026, compared with 6.2% in the second quarter of 2025. The G&A expense ratio was 6.9% in the six months ended June 30, 2026, compared with 6.6% in the six months ended June 30, 2025. The change in G&A ratios reflect the impact of lower premium revenues and continued operating discipline.

DEPRECIATION AND AMORTIZATION

Depreciation and amortization was $40 million in the second quarter of 2026, compared with $58 million in the second quarter of 2025, and was $79 million in the six months ended June 30, 2026, compared with $106 million in the six months ended June 30, 2025. The decrease is due to certain intangibles becoming fully amortized.

IMPAIRMENT

In the first quarter of 2026, we recognized an impairment of $93 million on intangible assets due to our strategic shift to focus exclusively on dual-eligible members in Medicare and plan to exit MAPD for 2027.

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OTHER OPERATING EXPENSES

Other operating expenses decreased by $5 million in the second quarter of 2026, compared with the second quarter of 2025, and decreased by $2 million in the six months ended June 30, 2026, compared with the six months ended June 30, 2025. Other operating expenses primarily include service costs associated with long-term services and supports consultative services we provide in Wisconsin, as noted above.

INTEREST EXPENSE

Interest expense was $54 million and $48 million in the second quarter of 2026 and 2025, respectively, and $108 million and $91 million for the six months ended June 30, 2026 and 2025, respectively. The increase is mainly attributable to the issuance of $850 million of notes in November 2025.

INCOME TAXES

Income tax expense amounted to $31 million in the second quarter of 2026, or 33.5% of pretax income, compared with income tax expense of $70 million, or 21.5% of pretax income, in the second quarter of 2025. Income tax expense amounted to $46 million in the six months ended June 30, 2026, or 38.1% of pretax income, compared with income tax expense of $162 million, or 22.7% of pretax income, in the six months ended June 30, 2025. The difference in the effective tax rate is due to the impact of nondeductible expenses and unfavorable discrete tax items as a percentage of lower pretax income in 2026, net of a decrease in state and local income taxes.

TRENDS AND UNCERTAINTIES

LEGISLATIVE AND REGULATORY DEVELOPMENTS

One Big Beautiful Bill Act (“OBBBA”)

The President signed the OBBBA into law in July 2025, which contains changes to the Medicaid and Marketplace programs. For Medicaid, the law requires states to establish work requirements, more frequent redeterminations, and cost sharing for the Expansion program over the period from 2027 to 2029, among other modifications. These changes are expected to reduce enrollment in state Medicaid programs, but the timing and magnitude of the reductions may vary by state depending on how quickly states implement the changes, as well as macroeconomic factors since some changes are subject to suspension in case of increases in local unemployment rates. We estimate the reduction in enrollment will emerge gradually and reduce premium 2% to 3% annually through 2029, primarily in Medicaid Expansion, and any acuity shift should be minor and gradual. An estimated two-thirds of our Expansion members already work in some capacity. The law also reduces revenues that states can raise through provider taxes to finance their share of Medicaid spending and limits payments to Medicaid providers to 100 percent of the mandated Medicare rate for Expansion states and 110 percent of the Medicare rate for non-Expansion states. These changes are scheduled to begin in 2028, and we expect they may take 5 to 10 years to be fully implemented. Their impact is uncertain at this time and will depend on how states may adapt their future tax and Medicaid funding policies in response.

The law limits which legal aliens may be eligible for Marketplace premium tax credits (“PTCs”) and will require pre-enrollment eligibility verification for enrollees to receive PTCs. These changes are planned to be phased in over the period from 2026 to 2028 and are expected to reduce national Marketplace enrollment as well.

Marketplace Program Integrity and Affordability Rule

In June 2025, the Department of Health and Human Services (“HHS”) finalized the Marketplace Program Integrity and Affordability Rule. The rule, among other changes, shortens the open enrollment period starting in 2027, eliminated the special enrollment period for people with incomes at or below 150% federal poverty level, and tightened eligibility verification requirements for all enrollees. Certain provisions of the Marketplace Program Integrity and Affordability Rule have been subject to legal challenges and stayed pending a final ruling. The Notice of Benefit and Payment Parameters (“NBPP”) Final Rule for the 2027 plan year reintroduces updated versions of certain of the stayed provisions, which could significantly impact the Marketplace. Certain of the provisions have been subject to legal challenge, and the outcome of these legal challenges and the long term impacts of the Marketplace Program Integrity and Affordability Rule and the NBPP Rule are uncertain.

OTHER RECENT DEVELOPMENTS

RFPs

Wisconsin Procurement—Medicaid. In July 2026, the Wisconsin Department of Health Services issued a notice of intent to award a contract to provide services under the Family Care and Family Care Partnership programs in its

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Geographic Service Region 3 to our Wisconsin health plan. The new contract is expected to begin on January 1, 2027 with an expected duration of one year, with an option to renew for an additional seven, one-year renewals.

Illinois Procurement—Medicaid. In June 2026, the Illinois Department of Healthcare and Family Services awarded a HealthChoice Illinois Medicaid Managed Care program contract to our Illinois health plan. The go-live date for the new contract is expected to be January 1, 2027. The contract is expected to have a duration of four-and-a-half years, with the option to extend the contract up to an additional five-and-a-half years at the discretion of the state.

Idaho Procurement—Medicaid and Medicare. Our new contract commenced on January 1, 2026.

Michigan Procurement—Medicare. Our new contract commenced on January 1, 2026 in select regions.

Massachusetts Procurement—Medicare. Our new contract commenced on January 1, 2026.

Ohio Procurement—Medicare. Our new contract commenced on January 1, 2026.

Florida Procurement—Medicaid. In November 2025, the Florida Agency for Health Care Administration issued a Notice of Agency Decision that it intends to award a contract to provide Statewide Medicaid Managed services to enrollees of the Title XIX and Title XXI Children’s Medical Services Program (“Florida Kids”) to our Florida health plan. We are the sole plan selected and expect to serve approximately 120,000 enrollees. The contract is expected to commence on October 1, 2026, and is expected to run through January 2030.

Wisconsin Procurement—Medicaid. In August 2025, the Wisconsin Department of Health Services awarded a contract to provide services under the Family Care and Family Care Partnership programs in its Geographic Service Regions 2 and 7 to our Wisconsin health plan. The contract commenced on January 1, 2026 and is expected to have a duration of two years, with an option for three two-year extensions.

Nevada Procurement—Medicaid. In March 2025, the Nevada Department of Health and Human Services Division of Health Care Financing and Policy awarded a Medicaid and Children’s Health Insurance Program managed care contracts to our Nevada health plan. The new contract will cover Urban Clark and Urban Washoe. The new contract commenced on January 1, 2026 and will run through December 31, 2030, with one two-year extension.

Illinois Procurement—Medicare. In March 2025, the Illinois Department of Healthcare and Family Services awarded a contract to provide a Fully Integrated Dual Eligible Special Needs Plan to our Illinois health plan. This contract will replace the state’s Medicare-Medicaid Alignment Initiative demonstration program. The new contract commenced on January 1, 2026. The contract is expected to have an initial term of four years, with the option to extend the contract from the initial term so long as the total contract term does not exceed ten years.

Business Trends

Medicaid. We expect our Medicaid enrollment to decrease in 2026, to a total of 4.5 million members by the end of the year, due to general market contraction. The associated revenue loss from the additional member attrition is expected to be offset by higher revenue in Marketplace, as discussed below.

MMP Transition—Medicare. On January 1, 2026, we successfully completed the transition of Medicare-Medicaid Plan (“MMP”) members in five states (Illinois, Michigan, Ohio, South Carolina, and Texas) to new integrated dual eligible special needs plans, which totaled approximately $1.9 billion in total premium revenue in 2025. Our duals business will be the long-term strategic focus for our Medicare segment. As previously mentioned, we will exit the MAPD product in 2027.

Medicare. We continue to expect our Medicare enrollment to decrease by approximately 12% in 2026, including further reductions in MAPD membership aimed at improving margins to a total of 230,000 members by the end of the year. In 2026, we are participating in Medicare in all our markets except Florida.

Marketplace. In 2026, we are participating in the Marketplace in all our markets except Arizona, Iowa, Massachusetts, Nebraska, and New York. We now expect our Marketplace enrollment to decrease to approximately 250,000 members by the end of the year, in line with our product and pricing strategy towards restoring our target margins. We expect to make further reductions in Marketplace enrollment for 2027 towards restoring our target margins, which we estimate to result in a $1 billion decrease in Marketplace premiums compared to 2026.

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REPORTABLE SEGMENTS

As of June 30, 2026, we served approximately 4.9 million members eligible for Medicaid, Medicare, and other government-sponsored healthcare programs for low-income families and individuals, including Marketplace members, most of whom receive government premium subsidies.

We currently have four reportable segments consisting of: 1) Medicaid; 2) Medicare; 3) Marketplace; and 4) Other.

HOW WE ASSESS PERFORMANCE

We derive our revenues primarily from health insurance premiums. Our primary customers are state Medicaid agencies and the federal government.

The key metrics used to assess the performance of our segments are revenue, margin and medical care ratio (“MCR”). MCR represents the amount of medical care costs as a percentage of premium revenue. Therefore, the underlying margin, or the amount earned by the segments after medical or service costs are deducted from revenue, represents the most important measure of earnings reviewed by management, and is used by our chief executive officer, who is our chief operating decision maker, to review results, assess performance, and allocate resources. Such oversight and decision making includes, among others, pricing, approving capital expenditures, and identifying growth opportunities. We do not report total assets by segment since this is not a metric used to assess segment performance or allocate resources.

Management’s discussion and analysis of the change in medical margin is discussed below under “Segment Financial Performance.” For more information, see Notes to Consolidated Financial Statements, Note 8, “Segments.”

SEGMENT MEMBERSHIP

The following table sets forth our membership by segment as of the dates indicated:

	June 30,	December 31,	June 30,
	2026	2025	2025
Medicaid	4,418,000	4,568,000	4,774,000
Medicare	224,000	262,000	267,000
Marketplace	283,000	655,000	690,000
Other	1,000	6,000	15,000
Total	4,926,000	5,491,000	5,746,000

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SEGMENT FINANCIAL PERFORMANCE

The following tables summarize premium revenue, medical margin, and MCR by segment for the periods indicated (dollars in millions):

	Three Months Ended June 30,
	2026										2025
	Premium Revenue				Medical Margin		MCR				Premium Revenue		Medical Margin				MCR
Medicaid			$	8,049					$	585					92.7	%			$	8,029	$	697	91.3	%
Medicare	1,565				146		90.7				1,608		161				90.0
Marketplace	628				69		88.9				1,200		175				85.4
Other (1)	2				4		NM				31		6				NM
Total	$	10,244			$	804	92.2	%			$	10,868	$	1,039			90.4	%

	Six Months Ended June 30,
	2026										2025
	Premium Revenue				Medical Margin		MCR				Premium Revenue		Medical Margin				MCR
Medicaid			$	15,976					$	1,216					92.4	%			$	16,159	$	1,488	90.8	%
Medicare	3,082				300		90.3				3,076		333				89.2
Marketplace	1,352				185		86.3				2,204		358				83.7
Other (1)	6				5		NM				57		9				NM
Total	$	20,416			$	1,706	91.6	%			$	21,496	$	2,188			89.8	%

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(1) The Other MCRs are not meaningful.

Medicaid

Medicaid premium revenue increased $20 million, or 0.2%, in the second quarter of 2026, when compared with the second quarter of 2025, but decreased $183 million, or 1%, in the six months ended June 30, 2026, when compared with the six months ended June 30, 2025. The change in both periods reflects the impact of lower membership due to general Medicaid market contraction and the expiration of our Medicaid Virginia contract effective June 30, 2025, rate updates, program changes, and member mix changes.

The medical margin in our Medicaid program decreased $112 million, or 16%, in the second quarter of 2026 when compared with the second quarter of 2025, and decreased $272 million, or 18%, in the six months ended June 30, 2026 when compared with the six months ended June 30, 2025. The changes for both periods were driven by the decreased premium revenues discussed above and the increase in the MCR, as described below.

The Medicaid MCR increased 140 basis points to 92.7% in the second quarter of 2026, from 91.3% in the second quarter of 2025, and increased 160 basis points to 92.4% in the six months ended June 30, 2026, from 90.8% in the six months ended June 30, 2025. The increase in both periods reflects a challenging medical cost environment, program changes, and member mix changes, partially offset by rate updates that were in effect during the six months ended June 30, 2026. The MCR is in line with our expectations.

Medicare

Medicare premium revenue decreased $43 million, or 3%, in the second quarter of 2026 compared to the second quarter of 2025, and increased $6 million, or 0.2%, in the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease in the second quarter mainly reflects the impact of further reductions in our MAPD footprint due to our pricing strategy aimed at improving margins. The increase in the six months ended June 30, 2026 primarily reflects changes in product mix, as we transitioned MMP members into integrated duals products, and membership growth associated with the ConnectiCare acquisition that closed on February 1, 2025, partially offset by the impact of further reductions in our MAPD footprint due to our pricing strategy aimed at improving margins.

The medical margin for Medicare decreased $15 million in the second quarter of 2026, and decreased $33 million in the six months ended June 30, 2026, when compared to the same periods in 2025. The decrease in both periods was mainly due to the increase in MCR discussed below, and the year-over-year changes in premium revenues discussed above.

Molina Healthcare, Inc. June 30, 2026 Form 10-Q | 29

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The Medicare MCR increased to 90.7% in the second quarter of 2026, or 70 basis points, compared to the second quarter of 2025, and increased to 90.3% in the six months ended June 30, 2026, or 110 basis points, compared to the six months ended June 30, 2025. The increase in both periods was mainly attributable to the product mix changes resulting from transitioning MMP members into integrated duals products discussed above, partially offset by product pricing and benefit adjustments implemented for 2026. The second quarter MCR is favorable to our expectations, mainly due to lower than expected medical cost trend in our new integrated duals products.

Marketplace

Marketplace premium revenue decreased $572 million in the second quarter of 2026 compared to the second quarter of 2025, and decreased $852 million in the six months ended June 30, 2026 compared to the six months ended June 30, 2025, due to an expected decrease in membership in line with our product and pricing strategy towards restoring our target margins and the impact of changes in estimate for prior year risk adjustment. Our Marketplace membership as of June 30, 2026, amounted to 283,000 members, representing a decrease of 407,000 members compared to June 30, 2025.

The Marketplace medical margin decreased $106 million in the second quarter of 2026 when compared with the second quarter of 2025, and decreased $173 million in the six months ended June 30, 2026 when compared with the six months ended June 30, 2025. The changes in each period were primarily due to the decline in premium revenue discussed above and the MCR changes discussed below.

The Marketplace MCR increased to 88.9% in the second quarter of 2026, or 350 basis points, compared to 85.4% in the second quarter of 2025, and increased to 86.3% in the six months ended June 30, 2026, or 260 basis points, compared to 83.7% in the six months ended June 30, 2025. The increase in MCR for both periods mainly reflects the impact of changes in estimate for prior year risk adjustment, continued CMS program integrity initiatives resulting in unfavorable prior year premium adjustments and unfavorable current year member acuity mix. The second quarter MCR was higher than our expectations.

Other

The Other segment includes service revenues and costs associated with long-term services and supports consultative services we provide in Wisconsin, the commercial portion of the business acquired in connection with the ConnectiCare transaction that closed effective February 1, 2025, and certain corporate amounts not allocated to the Medicaid, Medicare, or Marketplace segments. Such amounts were immaterial to our consolidated results of operations for the three and six months ended June 30, 2026 and 2025.

LIQUIDITY, FINANCIAL CONDITION AND CAPITAL RESOURCES

LIQUIDITY

We manage our cash, investments, and capital structure to meet the short- and long-term obligations of our business while maintaining liquidity and financial flexibility. We forecast, analyze, and monitor our cash flows to enable prudent investment management and financing within the confines of our financial strategy.

We maintain liquidity at two levels: 1) the regulated health plan subsidiaries; and 2) the parent company.

Our regulated health plan subsidiaries’ primary liquidity requirements include payment of medical claims and other health care services; payment of certain settlements with our state and federal customers, such as minimum medical loss ratio and risk corridors and Marketplace risk transfers on behalf of CMS; general and administrative costs directly incurred or paid through an administrative services agreement to the parent company; and federal tax payments to the parent company under an intercompany tax sharing agreement. Our regulated health plan subsidiaries meet their liquidity needs by generating cash flows from operating activities, primarily from premium revenue; cash flows from investing activities, including investment income and sales of investments; and capital contributions received from our parent company.

Our regulated health plan subsidiaries are each subject to applicable state regulations that, among other things, require the maintenance of minimum levels of capital and surplus. We continue to maintain levels of aggregate excess statutory capital and surplus in our regulated health plan subsidiaries that we believe are appropriate. See further discussion under “Regulatory Capital and Dividend Restrictions” below. When available and as permitted by applicable regulations, cash in excess of the capital needs of our regulated health plan subsidiaries is generally paid in the form of dividends to our parent company to be used for general corporate purposes. In the three and six months ended June 30, 2026, the parent company received $109 million and $144 million, respectively, in dividends

Molina Healthcare, Inc. June 30, 2026 Form 10-Q | 30

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and return of capital from the regulated health plan subsidiaries. See further discussion of dividends below in “Future Sources and Uses of Liquidity—Future Sources.”

Parent company liquidity requirements generally consist of payment of administrative costs not directly incurred by our regulated operations, including, but not limited to, staffing costs, lease payments, branding and certain information technology services; capital contributions paid to our regulated health plan subsidiaries, including funding for newer health plans; capital expenditures; debt service; funding for common stock purchases, acquisitions and other growth-related activities; and federal tax payments. In the three and six months ended June 30, 2026, the parent company contributed capital in the aggregate amount of $15 million and $30 million, respectively, to our regulated health plan subsidiary in New Mexico to satisfy statutory capital and surplus requirements. Our parent company normally meets its liquidity requirements from administrative services fees earned under administrative services agreements; dividends received from our regulated subsidiaries; federal tax payments collected from the regulated subsidiaries; proceeds received from the issuance of debt and equity securities; and cash flows from investing activities, including investment income and sales of investments.

Cash, cash equivalents and investments at the parent company amounted to approximately $290 million and $223 million as of June 30, 2026, and December 31, 2025, respectively. The change for the six months ended June 30, 2026 was primarily due to timing of certain corporate payments, partially offset by the impact of dividends received from, and contributions made to, our regulated health plan subsidiaries.

Investments

After considering expected cash flows from operating activities, we generally invest cash of regulated subsidiaries that exceeds our expected short-term obligations in longer term, investment-grade, and marketable debt securities to improve our overall investment return. These investments are made pursuant to board-approved investment policies which conform to applicable state laws and regulations.

Our investment policies are designed to provide liquidity, preserve capital, and maximize total return on invested assets, all in a manner consistent with state requirements that prescribe the types of instruments in which our subsidiaries may invest. These investment policies require that our investments have final maturities of less than 15 years, or less than 15 years average life for structured securities. Professional portfolio managers operating under documented guidelines manage our investments and a portion of our cash equivalents. Our portfolio managers must obtain our prior approval before selling investments where the loss position of those investments exceeds certain levels.

The overall rating of our portfolio is AA-. Our investment policy has directives in conjunction with state guidelines to minimize risks and exposures in volatile markets. Additionally, our portfolio managers assist us in navigating the current volatility in the capital markets.

Our restricted investments are invested principally in cash, cash equivalents, U.S. Treasury securities, and corporate debt securities, and we have the ability to hold such restricted investments until maturity. All of our unrestricted investments are classified as current assets.

Cash Flow Activities

Our cash flows are summarized as follows:

	Six Months Ended June 30,
	2026	2025	Change
	(In millions)
Net cash provided by (used in) operating activities	$

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Held by

holders ( registered funds via N-PORT, institutional investors via 13F). Showing top by dollar value.

Holder	Type	ETF	MF	Position ($)	% of holder	Δ % of holder	Holder AUM

Recent insider activity

Last 90 days. Open-market trades (purchases & sales) by directors, officers, and 10%+ owners. 2 transactions across 2 insiders. Net: -18,411 shares, -$3,429,913.

Date	Insider	Role	Action	Shares	Price	Value
2026-05-14	HEBERT MAURICE	Chief Accounting Officer	Sell	-600	$191.55	-$114,930
2026-05-11	Barlow Jeff D.	Chief Legal Officer	Sell	-17,811	$186.12	-$3,314,983

Source: SEC Form 4 filings.

Next expected filings

~2026-10-22 10-Q expected by 2026-11-07 (in 84 days)
~2027-02-09 10-K expected by 2027-02-25 (in 194 days)
~2027-04-22 10-Q expected by 2027-05-08 (in 266 days)
~2027-07-22 10-Q expected by 2027-08-07 (in 357 days)

Predicted from historical filing cadence; not an SEC commitment.

Recent SEC filings

2026-07-23 10-Q Quarterly Report
2026-07-22 8-K Earnings Release; Financial Statements and Exhibits
2026-05-27 S-8 Employee Benefit Plan Registration
2026-05-11 8-K Officer/Director Change; Bylaws/Articles Amended; Shareholder Vote Results; Financial Statements and Exhibits
2026-04-23 10-Q Quarterly Report
2026-04-22 8-K Earnings Release; Financial Statements and Exhibits
2026-02-10 10-K Annual Report
2026-02-06 8-K Material Agreement Entered; Material Financial Obligation; Material Impairments; Financial Statements and Exhibits
2026-02-05 8-K Earnings Release; Financial Statements and Exhibits
2025-11-20 8-K Material Agreement Entered; Material Financial Obligation; Other Events; Financial Statements and Exhibits
2025-10-23 10-Q Quarterly Report
2025-10-22 8-K Earnings Release; Financial Statements and Exhibits
2025-08-12 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
2025-07-24 10-Q Quarterly Report
2025-07-23 8-K Earnings Release; Financial Statements and Exhibits

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