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What changed in Molina Healthcare's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Molina Healthcare's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+486 added−454 removedSource: 10-K (2026-02-10) vs 10-K (2025-02-11)

Top changes in Molina Healthcare's 2025 10-K

486 paragraphs added · 454 removed · 334 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

102 edited+71 added−74 removed40 unchanged
Biggest changeWe participate in the following Medicare programs: • Medicare Advantage-Part D (“MAPD”) – We contract with CMS under the Medicare Advantage program to provide benefits in excess of original Medicare, including cost-sharing and enhanced prescription drug benefits under Part D, that are targeted towards low-income beneficiaries; • Dual Eligible Special Needs Plan (“D-SNP”) – We contract with CMS to provide benefits in excess of original Medicare, including care coordination complex case management and care management; • Highly-Integrated Dual Special Needs Plans (“HIDE”) – We contract with CMS and state Medicaid agencies to integrate care at a higher level than a typical D-SNP for dually eligible beneficiaries; • Fully-Integrated Dual Special Needs Plans (“FIDE”) – We contract with CMS and state Medicaid agencies to fully integrate care for dually eligible beneficiaries under a single managed care plan; • Medicare-Medicaid Plans (“MMP”) – To coordinate care and deliver services in a more financially efficient manner, some states have undertaken demonstration programs to integrate Medicare and Medicaid services for dual-eligible individuals.
Biggest changeWe participate in the following Medicare programs: • MAPD – We contract with CMS under the Medicare Advantage program to provide benefits above original Medicare, including cost-sharing and enhanced prescription drug benefits under Part D, that are targeted towards low-income beneficiaries. • Dual Eligible Special Needs Plan (“D-SNP”) – We contract with CMS to provide benefits above original Medicare, including care coordination complex case management and care management. • Highly-Integrated Dual Special Needs Plans (“HIDE”) – D-SNP plans that offer a higher level of integration by providing coordinated care and covering LTSS or behavioral health benefits through contracts with state Medicaid agencies. • Fully-Integrated Dual Special Needs Plans (“FIDE”) – D-SNP plans that provide fully-integrated care coordinated via contracts with CMS and state Medicaid agencies under a single managed care plan. • Coordination Only (“CO”) D-SNP – We contract with state Medicaid agencies to coordinate the delivery of the Medicaid and Medicare services that meet minimum CMS requirements but do not qualify as a HIDE or FIDE. • Chronic Special Needs Plan (“C-SNP”) – We contract with CMS to provide benefits for people living with qualifying chronic conditions, such as Diabetes, Chronic heart failure, and cardiovascular disorders. • Medicare-Medicaid Plans (“MMP”) – These plans provide for coordination of care and deliver services in a more efficient manner, and certain states have undertaken demonstration programs to integrate Medicare and Medicaid services for dual-eligible individuals.
This model has proved to be an effective method of coordinating medical care for our members. Utilization Management Our goal is to optimize access to low-cost, high-quality care. This is achieved by sound clinical policy based on current evidence-based practices. Additionally, we continuously monitor utilization patterns and strive to identify new opportunities to reduce costs and improve quality of care.
This model has proved to be an effective method of coordinating medical care for our members. Utilization Management Our goal is to optimize access to low-cost, high-quality care. This is achieved by sound clinical policy based on current evidence-based practices. Additionally, we continuously monitor utilization patterns and strive to identify new opportunities to improve quality of care and reduce costs.
FRAUD AND ABUSE LAWS AND THE FALSE CLAIMS ACT Because we receive payments from federal and state governmental agencies, we are subject to various laws commonly referred to as “fraud and abuse” laws, including federal and state anti-kickback statutes, prohibited referrals, and the federal False Claims Act, which permit agencies and enforcement authorities to institute a suit against us for violations and, in some cases, to seek treble damages, criminal and civil fines, penalties, and assessments.
FRAUD AND ABUSE LAWS AND THE FALSE CLAIMS ACT Because we receive payments from federal and state governmental agencies, we are subject to various laws commonly referred to as “fraud and abuse” laws, including federal and state anti-kickback statutes, prohibited referrals, and the federal False Claims Act, which permit agencies and enforcement authorities to institute a suit against us for purported violations and, in some cases, to seek treble damages, criminal and civil fines, penalties, and assessments.
We reimburse hospitals under a variety of payment methods, including fee-for-service, per diems, diagnostic-related groups, capitation, and case rates. Ancillary Providers Our ancillary agreements provide coverage of medically-necessary care, including laboratory services, home health, physical, speech and occupational therapy, durable medical equipment, radiology, ambulance and transportation services, and are reimbursed on a capitation and fee-for-service basis.
We reimburse hospitals under a variety of payment methods, including fee-for-service, per diems, diagnostic-related groups, capitation, and case rates. Ancillary Providers Our ancillary agreements provide coverage of medically-necessary care, including laboratory services, home health, mental health, physical, speech and occupational therapy, durable medical equipment, radiology, ambulance and transportation services, and are reimbursed on a capitation and fee-for-service basis.
Plans are categorized by metal tiers (Platinum, Gold, Silver or Bronze), which determine how beneficiaries and the plan share costs (e.g., premiums, out-of-pocket costs and deductibles). We offer Marketplace plans in many of the states where we offer Medicaid health plans. Our plans allow our Medicaid members to stay with their providers as they transition between Medicaid and the Marketplace.
Plans are categorized by metal tiers (Platinum, Gold, Silver, or Bronze), which determine how beneficiaries and the plan share cost (e.g., premiums, out-of-pocket costs, and deductibles). We offer Marketplace plans in many of the states where we offer Medicaid health plans. Our plans allow our Medicaid members to stay with their providers as they transition between Medicaid and the Marketplace.
We believe these improvements help us to achieve our goal to become a destination employer in the government-sponsored healthcare industry. Annually, we invite all employees to participate in our engagement survey.
We believe these improvements help us to achieve our goal to become a destination employer in the government-sponsored healthcare industry. Annually, we invite all employees to participate in our voluntary engagement survey.
Molina Healthcare, Inc. 2024 Form 10-K | 13 For the states where our health plans are accredited by the NCQA and/or have Medicare Star Ratings, the table below presents such health plans’ NCQA status, as well as their current scores as part of the Medicare Star Ratings, which measures the quality of Medicare plans across the country using a 5-star rating system.
Molina Healthcare, Inc. 2025 Form 10-K | 13 For the states where our health plans are accredited by the NCQA and/or have Medicare Star Ratings, the table below presents such health plans’ NCQA status, as well as their current scores as part of the Medicare Star Ratings, which measures the quality of Medicare plans across the country using a 5-star rating system.
In May 2024, the Wisconsin Department of Health Services awarded a contract to provide services under the Family Care and Family Care Partnership program in its Geographic Service Region 5 to our Wisconsin health plan. The contract commenced on January 1, 2025, and is expected to have a duration of two years, with an option for three two-year extensions.
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. In May 2024, the Wisconsin Department of Health Services awarded a contract to provide services under the Family Care and Family Care Partnership program in its Geographic Service Region 5 to our Wisconsin health plan.
In addition, meritorious false claims actions could result in fines, or debarment from the Medicare, Medicaid, or other state or federal healthcare programs.
In addition, false claims actions could result in fines or debarment from the Medicaid, Medicare, or other state or federal healthcare programs.
Information on or linked to our website (including the charters, reports, policies and documents noted above) is neither part of nor incorporated by reference into this Form 10-K or any other SEC filings. Molina Healthcare, Inc. 2024 Form 10-K | 19
Information on or linked to our website (including the charters, reports, policies and documents noted above) is neither part of nor incorporated by reference into this Form 10-K or any other SEC filings. Molina Healthcare, Inc. 2025 Form 10-K | 19
Our managed care contract with the Washington State Health Care Authority (“HCA”) covers all ten regions of the state’s Apple Health Integrated Managed Care program, and was effective through December 31, 2024. HCA has renewed the contract through December 31, 2025, with a further renewal expected for 2026.
Our managed care contract with the Washington State Health Care Authority (“HCA”) covers all ten regions of the state’s Apple Health Integrated Managed Care program, and was effective through December 31, 2025. HCA has renewed the contract through December 31, 2026, with a further renewal expected for 2027.
We also offer a comprehensive suite of benefits to all eligible employees, including, among others: • Comprehensive health insurance coverage for employees working 30 hours or more per week; • 401(k) employer matching contributions of up to 100% on the first 4% contributed by the employee; • Personal time off that provides employees with paid time away from work, combining vacation and sick leave; • Paid parental leave to support bonding time for new parents; • Volunteer time off that provides employees with paid time away from work to build strong community partnerships and connect with the people we serve; • Employee wellness programs that provide tools and incentives to live a healthy life focusing on physical, emotional, financial, and work well-being; • Supplemental life insurance and disability plans to provide financial security for our employees and their families; • Employee discount and other programs, including tuition reimbursement; and Molina Healthcare, Inc. 2024 Form 10-K | 18 • Employee assistance program benefits that provide up to six confidential counseling sessions per rolling 12-month period and includes assistance with physical, emotional, and financial related matters.
We also offer a comprehensive suite of benefits to all eligible employees, including, among others: • Comprehensive health insurance coverage for employees working 30 hours or more per week; • 401(k) employer matching contributions of up to 100% on the first 4% contributed by the employee; • Personal time off that provides employees with paid time away from work, combining vacation and sick leave; • Paid parental leave to support bonding time for new parents; • Volunteer time off that provides employees with paid time away from work to build strong community partnerships and connect with the people we serve; • Employee wellness programs that provide tools and incentives to live a healthy life focusing on physical, emotional, financial, and work well-being; • Supplemental life insurance and disability plans to provide financial security for our employees and their families; • Employee discount and other programs, including tuition reimbursement; and • Employee assistance program benefits that provide up to six confidential counseling sessions per rolling 12-month period and includes assistance with physical, emotional, and financial related matters.
Fraud, waste and abuse prohibitions encompass a wide range of operating activities, including kickbacks or other inducements for referral of members or for the coverage of products (such as prescription drugs) by a plan, billing for unnecessary medical services by a provider, upcoding, payments made to excluded providers, improper marketing, and the violation of patient privacy rights.
Fraud, waste and abuse prohibitions encompass a wide range of operating activities, including kickbacks or other inducements for referral of members or for the coverage of products (such as prescription drugs) by a plan, billing for unnecessary medical services by a provider, up-coding, payments made to excluded providers, improper marketing, and the violation of patient privacy rights.
From that site, you can download and print copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, along with amendments to those reports. You can also download our Corporate Governance Guidelines, board of directors’ committee charters, Code of Business Conduct and Ethics and Environmental, Social and Governance Report.
From that site, you can download and print copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, along with amendments to those reports. You can also download our Corporate Governance Guidelines, board of directors’ committee charters, and Code of Business Conduct and Ethics.
We participate in the following Medicaid programs: • Temporary Assistance for Needy Families (“TANF”) – This is the most common Medicaid program. It primarily covers low-income families with children. • Medicaid Aged, Blind or Disabled (“ABD”) – ABD programs cover low-income persons with chronic physical disabilities or behavioral health impairments.
We participate in the following Medicaid programs: • Temporary Assistance for Needy Families (“TANF”) – The most common Medicaid program, covers primarily low-income families with children. • Medicaid Aged, Blind or Disabled (“ABD”) – ABD programs cover low-income persons with chronic physical disabilities or behavioral health impairments.
CMS generally limits sales activities to those conveying information regarding benefits, describing the operations of our managed care plans, and providing information about eligibility requirements. We employ our own insurance agents and contract with independent, licensed insurance agents to market our Medicare Advantage products.
CMS generally limits sales activities to those conveying information regarding benefits, describing the operations of our managed care plans, and providing information about eligibility requirements. We employ our own insurance agents and contract with independent, licensed insurance agents to market our MAPD products.
We are focused on providing our members effective and appropriate access to care at the right time and in the right setting, including preventive health and wellness and care management. We offer our government customers, members and providers reliable service and a seamless experience.
We are focused on providing our members effective and appropriate access to care at the right time and in the right setting, including preventive health and wellness and care management. We are also committed to providing our government customers, members and providers reliable service and a seamless experience.
We served approximately 5.5 million members as of December 31, 2024, located across 21 states. Our business footprint, as of December 31, 2024, is illustrated below.
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.
The purpose of our survey is to obtain honest, comprehensive feedback on what is going well, and which strategic, operational or cultural concerns are top of mind for our employees. Our results demonstrate improvement and exceed industry benchmarks. Succession planning and managing our talent pipelines continue to be key to our human capital strategy.
The purpose of our survey is to obtain honest, comprehensive feedback on what is going well, and which strategic, operational or cultural concerns are top of mind for our employees. Our results demonstrate continued high levels of engagement that exceed industry benchmarks. Succession planning and managing our talent pipelines continue to be key to our human capital strategy.
In October 2023, CMS published its updated Medicare 2024 Star Ratings based on plan year 2022 data. For the 2024 Star Ratings, three of our plans had a decrease of 0.5 Stars, one of our plans had a decrease of 1 Star, four plans maintained their ratings, and one plan had an increase of 0.5 Stars.
In October 2024, CMS published its updated Medicare 2025 Star Ratings based on plan year 2023 data. For the 2025 Star Ratings, six plans maintained their ratings, two plans had an increase of 0.5 Stars, and one plan had an increase of 1 Star, and three of our plans had a decrease of 0.5 Stars.
AgeWell is a specialty managed care organization that provides long-term care services at home or in the community for those who are chronically ill or disabled in The Bronx, New York City, Queens, Brooklyn, Nassau, Westchester, and Suffolk counties.
We also have a specialty managed care organization that provides long-term care services at home or in the community for those who are chronically ill or disabled in The Bronx, New York City, Queens, Brooklyn, Nassau, Westchester, and Suffolk counties.
In the first quarter of 2024, we were notified of the Texas Health and Human Services Commission’s intent to award us a contract for TANF and CHIP (known in Texas as the STAR & CHIP programs, and both existing contracts for Molina), expanding our footprint, and expecting to grow our market share.
In the first quarter of 2024, we were notified of the Texas Health and Molina Healthcare, Inc. 2025 Form 10-K | 7 Human Services Commission’s intent to award us a contract for TANF and CHIP (known in Texas as the STAR & CHIP programs, and both existing contracts for Molina), expanding our footprint, and expecting to grow our market share.
There can be no assurance, however, that our strategies to mitigate medical care cost inflation will be successful. Competitive pressures, new healthcare and pharmaceutical product introductions, demands from healthcare providers and customers, applicable regulations, or other factors may affect our ability to control medical care costs.
There can be no assurance, however, that our strategies to mitigate medical care cost inflation will be successful. Competitive Molina Healthcare, Inc. 2025 Form 10-K | 15 pressures, new healthcare and pharmaceutical product introductions, demands from healthcare providers and customers, applicable regulations, or other factors may affect our ability to control medical care costs.
We offer formal leadership development programs including new leader orientation, executive onboarding, front-line leadership essentials, and experienced leader development. We have targeted development plans for critical roles with an emphasis on leadership and business acumen. We invest in our workforce through market competitive total rewards including pay, benefits and time-off.
We offer formal leadership development programs including new leader orientation, executive onboarding, front-line leadership essentials, and experienced leader development. We have targeted development plans for critical roles with an emphasis on leadership and business acumen. Molina Healthcare, Inc. 2025 Form 10-K | 18 We invest in our workforce through market competitive total rewards including pay, benefits and time-off.
In addition to contract renewal, our state Medicaid contracts may be amended periodically to include or exclude certain health benefits, such as pharmacy services, behavioral health services, or long-term care services, the addition or withdrawal of populations such as the ABD; and expansion into or retraction from certain new regions or service areas.
In addition to contract renewal, our state Medicaid contracts may be periodically amended to include or exclude certain health benefits, such as pharmacy services, behavioral health services, or long-term care services, or populations such as the ABD; and regions or service areas.
Each state differs in its approach to auto-assignment, but one or more of the following criteria is typical in auto-assignment algorithms: a Medicaid beneficiary's previous enrollment with a health plan or experience with a particular provider contracted with a health plan, enrolling family Molina Healthcare, Inc. 2024 Form 10-K | 8 members in the same plan, a plan's quality or performance status, a plan’s network and enrollment size, awarding all auto-assignments to a plan with the lowest bid in a county or region, and equal assignment of individuals who do not choose a plan in a specified county or region.
Each state differs in its approach to auto-assignment, but one or more of the following criteria is typical in auto-assignment algorithms: a Medicaid beneficiary's previous enrollment with a health plan or experience with a particular provider contracted with a health plan; enrolling family members in the same plan; a plan's quality or performance status; a plan’s network and enrollment size; plans with the lowest bid in a county or region; and equal assignment of individuals who do not choose a plan in a specified county or region.
The activities of our independently licensed insurance agents are also regulated by both Molina Healthcare, Inc. 2024 Form 10-K | 11 CMS and the departments of insurance in the states in which we participate. Our sales cycle typically peaks during the annual Open Enrollment Period (“OEP”) as defined and regulated by CMS and the applicable FFM and SBM .
The activities of our independently licensed insurance agents are also regulated by both CMS and the departments of insurance in the states in which we participate. Our sales cycle typically peaks during the annual Open Enrollment Period (“OEP”) as defined and regulated by CMS and the applicable FFM and SBM .
Our MMPs are transitioning to other products, as described further below. Contracts We enter into MAPD contracts with CMS annually, and for D-SNP, HIDE, FIDE and MMP (collectively, “dual-eligible programs”), we enter into contracts with CMS, in partnership with each state’s department of health and human services. Such contracts typically have terms of one to three years.
Our MMPs are transitioning to other products, as described further below. Contracts We enter into MAPD and C-SNP contracts with CMS annually, and for D-SNP, HIDE, FIDE, CO D-SNP, and MMP (collectively, “dual-eligible programs”), we enter into contracts with CMS, in partnership with each state’s department of health and human services.
In partnering with quality, cost-effective providers, we utilize clinical and financial information derived by our medical informatics function, as well as the experience we have gained in serving Medicaid members, to gain insight into the needs of both our members and our providers.
In partnering with quality, cost-effective providers, we utilize clinical and financial information derived by our medical informatics function, as well as the experience we have gained in serving members, to gain insight into the needs of both our members and our providers. We strive to ensure that our providers have the appropriate expertise and cultural and linguistic experience.
States have the option of administering CHIP through their Medicaid programs. • Medicaid Expansion – In states that have elected to participate, Medicaid Expansion provides eligibility to nearly all low-income individuals under age 65 with incomes at or below 138% of the federal poverty line. • Long Term Services and Supports (“LTSS”) – LTSS programs cover a range of medical and personal care assistance that people may need – for several weeks, months, or years – when they experience difficulty completing self-care tasks as a result of aging, chronic illness, or disability.
States have the option of administering CHIP through their Medicaid programs. • Medicaid Expansion – For states that have elected to participate, Medicaid Expansion provides eligibility to most low-income individuals under age 65 with incomes at, or below 138% of the federal poverty line. • LTSS – LTSS programs cover a range of medical and personal care assistance that people may need for weeks, months, or years, when they have trouble completing self-care tasks because of aging, chronic illness, or disability.
LICENSING AND SOLVENCY Our health plans are generally licensed by the insurance departments in the states in which they operate, except the following: our California health plans are licensed by the California Department of Managed Health Care; one of our New York health plans is licensed as a prepaid health services plan by the New York State Department of Health; and our Massachusetts health plan is regulated as a risk-bearing entity by the Massachusetts Executive Office of Health and Human Services.
LICENSING AND SOLVENCY Our health plans are generally licensed by the insurance departments in the states in which they operate, except for our California health plans, which are licensed by the California Department of Managed Health Care, and one of our New York health plans, which is licensed as a prepaid health services plan by the New York State Department of Health.
The expected start of operations and other final contract terms are still pending. Our Texas Medicaid contracts represented approximately $4,126 million, or 14%, of consolidated Medicaid premium revenue in 2024. Washington.
The expected start of operations and other final contract terms are still pending. Our Texas Medicaid contracts represented approximately $5,735 million, or 18%, of consolidated Medicaid premium revenue in 2025. Washington.
Additionally, eight health plans earned NCQA’s Long Term Services and Supports Distinction. We believe that these objective measures of quality are important to state Medicaid agencies, as a growing number of states link reimbursement and patient assignment to quality scores. In October 2022, CMS published its updated Medicare 2023 Star Ratings based on plan year 2021 data.
We believe that these objective measures of quality are important to state Medicaid agencies, as a growing number of states link reimbursement and patient assignment to quality scores. In October 2023, CMS published its updated Medicare 2024 Star Ratings based on plan year 2022 data.
For the 2025 Star Ratings, six plans maintained their ratings, two plans had an increase of 0.5 Stars, and one plan had an increase of 1 Star, and three of our plans had a decrease of 0.5 Stars. The 2025 Star Rating included an additional plan reaching 3.5 Stars, strengthening our 2026 rebates.
For the 2026 Star Ratings, six plans maintained their ratings, three plans had an increase of 0.5 Stars, and one plan had an increase of 1 Star, and two of our plans had a decrease of 0.5 Stars.
In 2009, the Health Information Technology for Economic and Clinical Health Act (“HITECH”) imposed requirements on uses and disclosures of health information; included requirements for HIPAA business associate agreements; extended parts of HIPAA privacy and security provisions to business associates; added data breach notification requirements for covered entities and business associates and reporting requirements to the U.S.
HITECH expanded requirements on uses and disclosures of health information; included requirements for HIPAA business associate agreements; extended parts of HIPAA privacy and security provisions to business associates; added data breach notification requirements for covered entities and business associates and reporting requirements to the U.S.
HCA is expected to re-procure for Medicaid with an anticipated release of an RFP no earlier than sometime in 2026, with an expected contract effective date of January 1, 2027. Our Washington Medicaid contract represented approximately $3,998 million, or 13%, of consolidated Medicaid premium revenue in 2024.
HCA is expected to re-procure for Medicaid with an anticipated release of an RFP no earlier than fourth quarter of 2026, with an expected contract effective date of January 1, 2028. Our Washington Medicaid contract represented approximately $4,194 million, or 13%, of consolidated Medicaid premium revenue in 2025.
Because of these financial inducements offered to plaintiffs, qui tam actions have increased significantly in recent years, causing greater numbers of healthcare companies to incur the costs of having to defend false claims actions, many of which are spurious and without merit.
Because of these financial inducements offered to plaintiffs, qui tam actions have increased significantly in recent years, causing greater numbers of healthcare companies to incur the costs of having to defend against false claims actions, including the costs associated with responding to exploratory Civil Investigative Demands brought by the government, many of which are spurious and without merit.
The three DHCS Medi-Cal contracts and plan-to-plan subcontract for Los Angeles County commenced on January 1, 2024, which enabled us to continue serving Medi-Cal members in Los Angeles, Riverside/San Bernardino, Sacramento, and San Diego counties and significantly expanded our footprint in Los Angeles County. The expansion in Los Angeles County added 500,000 new members.
The three California Department of Health Care Services Medi-Cal contracts and plan-to-plan subcontract for Los Angeles County commenced on January 1, 2024, which enabled us to continue serving Medi-Cal members in Los Angeles, Riverside/San Bernardino, Sacramento, and San Diego counties and significantly expanded our footprint in Los Angeles County.
The passage of any of these changes or other reforms could have a material adverse effect on our business, financial condition, cash flows, or results of operations. OPERATIONS QUALITY Our long-term success depends, to a significant degree, on the quality of the services we provide.
The passage of any of these changes or other reforms, if enacted, could have a material adverse effect on our business, financial condition, cash flow, or results of operations. Molina Healthcare, Inc. 2025 Form 10-K | 12 OPERATIONS QUALITY Our long-term success depends, to a significant degree, on the quality of the services we provide.
Our New York Medicaid contracts represented premium revenue of approximately $3,373 million, or 11%, of our consolidated Medicaid premium revenue in 2024. Texas.
Our New York Medicaid contracts represented premium revenue of approximately $3,221 million, or 10%, of our consolidated Medicaid premium revenue in 2025. Texas.
Our Medicaid contracts with the states of California, New York, Texas, and Washington each accounted for approximately 10% or more of our consolidated Medicaid premium revenues in the year ended December 31, 2024. The current status of each of these contracts is described below. California .
Status of Significant Contracts Our Medicaid premium revenue constituted 75% of our consolidated premium revenue in the year ended December 31, 2025. Our Medicaid contracts with the states of California, New York, Texas, and Washington each accounted for approximately 10% or more of our consolidated Medicaid premium revenues in the year ended December 31, 2025.
We have continued to execute a capital plan that has produced a strong and stable balance sheet, with a simplified capital structure, which resulted in the following accomplishments in 2024: • Our regulated health plans paid $997 million in total dividends to the parent company, representing cash in excess of their capital needs. • Investment income increased $58 million in 2024, or 15%, due mainly to growth in invested assets. • In November 2024, we completed the private offering of $750 million aggregate principal amount of 6.250% senior notes due 2033.
We have continued to execute a capital plan that has produced a strong and stable balance sheet, with a simplified capital structure, which resulted in the following accomplishments in 2025: • Our regulated health plans paid $985 million in total dividends to the parent company, representing cash in excess of their capital needs. • In November 2025, we completed the private offering of $850 million aggregate principal amount of 6.500% senior notes due 2031.
Molina Healthcare, Inc. 2024 Form 10-K | 15 INFORMATION TECHNOLOGY Our business is dependent on effective and secure information systems that assist us in processing provider claims, monitoring utilization and other cost factors, supporting our medical management techniques, providing data to our regulators, and implementing our data security measures.
INFORMATION TECHNOLOGY Our business is dependent on effective and secure information systems, cloud providers and AI capabilities that assist our personnel in processing provider claims, monitoring utilization and other cost factors, supporting our medical management techniques, providing data to our regulators, and implementing our data security measures.
Approximately 45% of our 2025 Medicare premium revenue is not impacted by Star Ratings. We are actively working on improvement plans and remain committed to invest in these programs to improve our quality Star scores with a focus on member experience and access measures.
We are actively working on improvement plans and remain committed to invest in these programs to improve our quality Star scores with a focus on member experience and access measures.
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.
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.
HIPAA privacy regulations do not preempt more stringent state privacy laws and regulations that may apply to us. We maintain a HIPAA compliance program, which we believe complies with HIPAA privacy and security regulations, and monitor our compliance with applicable state and federal privacy and security laws and regulations.
HIPAA privacy regulations do not preempt more stringent state privacy laws and regulations that may apply to us. We have implemented HIPAA compliance and security programs designed to comply with HIPAA privacy and security regulations, and monitor our compliance with applicable state and federal privacy and security laws and regulations.
A relator who brings a successful qui tam lawsuit can receive 15 to 30 percent of the damages the government recovers from the defendants, which damages are trebled under the False Claims Act.
Qui tam actions under federal and state law are brought by a private individual, known as a relator, on behalf of the government. A relator who brings a successful qui tam lawsuit can receive 15 to 30 percent of the damages the government recovers from the defendants, which damages are trebled under the False Claims Act.
FINANCIAL HIGHLIGHTS Year Ended December 31, 2024 2023 (In millions, except per-share amounts) Premium Revenue $ 38,627 $ 32,529 Total Revenue $ 40,650 $ 34,072 Medical Care Ratio (“MCR”) (1) 89.1 % 88.1 % Net Income $ 1,179 $ 1,091 Net Income per Diluted Share $ 20.42 $ 18.77 _______________________ (1) Medical care ratio represents medical care costs as a percentage of premium revenue.
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.
Such risk adjustment data validation (“RADV”) audits can result in retroactive and prospective premium adjustments. We record the estimated impact of audit settlements as a reduction to premium revenues, based upon available information, in the year that CMS determines repayment is required.
We record the estimated impact of audit settlements as a reduction to premium revenues, based upon available information, in the year that CMS determines repayment is required.
Molina Healthcare, Inc. 2024 Form 10-K | 3 SEGMENT MEMBERSHIP The following table summarizes our membership by segment as of the dates indicated: As of December 31, 2024 2023 Medicaid 4,890,000 4,542,000 Medicare 242,000 172,000 Marketplace 403,000 281,000 Total 5,535,000 4,995,000 SEGMENT PREMIUM REVENUE The following table presents our consolidated premium revenue by segment for the periods indicated: Year Ended December 31, 2024 2023 (In millions) Medicaid $ 30,579 $ 26,327 Medicare 5,542 4,179 Marketplace 2,506 2,023 Total $ 38,627 $ 32,529 MISSION Our mission is to improve the health and lives of our members by delivering high-quality health care.
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 $ 38,627 MISSION Our mission is to improve the health and lives of our members by delivering high-quality health care.
For the 2023 Star Ratings, five of our plans had a decrease of 0.5 Stars, two of our plans had a decrease of 1 Star, one plan had a decrease of 1.5 Stars, and two plans either maintained or increased Star Ratings by 0.5. The decreases to the 2023 Star Ratings impacted the 2024 bonus year payments.
For the 2024 Star Ratings, three of our plans had a decrease of 0.5 Stars, one of our plans had a decrease of 1 Star, four plans maintained their ratings, and one plan had an increase of 0.5 Stars. The decreases to the 2024 Star Ratings impacted the 2025 bonus year payments.
Additionally, our plans remove financial barriers to quality care and seek to minimize members' out-of-pocket expenses. In 2025, we are participating in the Marketplace in all our markets except Arizona, Iowa, Massachusetts, Nebraska, New York, and Virginia.
Additionally, our plans remove financial barriers to quality care and seek to minimize members' out-of-pocket expenses. In 2026, we are participating in the Marketplace in all our markets except Arizona, Iowa, Massachusetts, Michigan, Nebraska, New York, and Wisconsin. We expect our Marketplace enrollment to decrease to a total of approximately 220,000 members by the end of the year.
For further information, refer to the Notes to Consolidated Financial Statements, Note 15, “Commitments and Contingencies—Regulatory Capital Requirements and Dividend Restrictions.” HUMAN CAPITAL As of December 31, 2024, we had just over 18,000 employees. Our diverse employee population reflects the diversity of the members and communities we serve.
For further information, refer to the Notes to Consolidated Financial Statements, Note 15, “Commitments and Contingencies—Regulatory Capital Requirements and Dividend Restrictions.” HUMAN CAPITAL As of December 31, 2025, we had approximately 19,000 employees. We believe that our workforce reflects the membership and customers we serve.
Basis for Premium Rates Under Medicare Advantage, managed care plans contract with CMS, and for the dual-eligible programs with CMS and state governments, to provide benefits in exchange for a PMPM premium payment that varies based on health plan Star rating and member demographics, including county of residence and health risk factors.
Basis for Premium Rates Under MAPD, managed care plans contract with CMS to provide benefits, and assume the associated medical and administrative cost risks, in exchange for a fixed PMPM premium payment that varies based on health plan Star Rating and member demographics, including county residence and health status.
Companies involved in government healthcare programs such as Medicaid and Medicare are required to maintain compliance programs to detect and deter fraud, waste and abuse, and are often the subject of fraud, waste and abuse investigations and audits.
Companies involved in public health care programs such as Medicaid and Medicare are required to maintain compliance programs to detect and deter fraud, waste, and abuse, and are often the subject of fraud, waste and abuse investigations and audits. The regulations and contractual requirements applicable to participants in these public-sector programs are complex and subject to change.
Member Enrollment and Marketing Our Medicare members may be enrolled through auto-assignment, as described above in “Medicaid—Member Enrollment and Marketing,” or by enrolling in our plans with the assistance of insurance agents employed by Molina, outside brokers, or via the Internet. Generally, the enrollment period occurs between mid-October and early December for coverage that begins on the following January 1.
Member Enrollment and Marketing Our Medicare members may be enrolled through passive enrollment, as described above in “Medicaid—Member Enrollment and Marketing,” or by enrolling in our plans with the assistance of insurance agents employed by Molina, outside brokers, or via the Internet.
The approximate average FMAP across all jurisdictions is currently 62%, and currently ranges from a federally established FMAP floor of 50% to as high as 83%. Most states have contracted with managed care plans to provide Medicaid services to beneficiaries, seeking to increase budget predictability, constrain spending, improve access to care and value, and meet other objectives.
The approximate average FMAP across all jurisdictions is 60% and varies inversely with average personal income in the state. Most states have contracted with managed care plans to provide Medicaid services to beneficiaries, seeking to increase budget predictability, constrain spending, improve access to care and value, and meet other objectives.
ConnectiCare is a leading health plan in the state of Connecticut serving approximately 140,000 members across Marketplace, Medicare, and certain commercial products. The purchase price for the transaction was $350 million. Idaho Procurement—Medicaid and Medicare .
Effective February 1, 2025, we closed on our acquisition of ConnectiCare Holding Company, Inc. (“ConnectiCare”), a wholly owned subsidiary of EmblemHealth, Inc. ConnectiCare is a leading health plan in the state of Connecticut serving approximately 140,000 members across Marketplace, Medicare, and certain commercial products. The purchase price for the transaction was $350 million. Florida Procurement—Medicaid.
Contracts Our state Medicaid contracts typically have terms of three to five years, contain renewal options exercisable by the state Medicaid agency, and allow either the state or the health plan to terminate the contract with or without cause. Such contracts are subject to risk of loss in states that issue RFPs open to competitive bidding by other health plans.
Our state Medicaid contracts typically have terms of three to five years, contain renewal options that can be exercised by the state Medicaid agency, and allow either the state or the health plan to terminate the contract with or without cause.
If one of our health plans is not a successful responsive bidder to a state RFP, its contract may not be renewed.
States may issue RFPs to competitively rebid contracts to other health plans, and if one of our health plans is not a successful responsive bidder to such RFPs, its contract may not be renewed.
Under these programs, pursuant to Rule 10b5-1 trading plans, we: ◦ Purchased approximately 1,465,000 shares for $500 million in the third quarter of 2024 (average cost of $341.25 per share). ◦ Purchased approximately 1,666,000 shares for $500 million in the fourth quarter of 2024 (average cost of $300.04 per share).
Under these programs, pursuant to Rule 10b5-1 trading plans, we: ◦ Purchased approximately 1,679,000 shares for $500 million in the first quarter of 2025 (average cost of $297.83 per share). ◦ Purchased approximately 2,849,000 shares for $500 million in the third quarter of 2025 (average cost of $175.50 per share).
Liability under such federal and state statutes and regulations may arise if we know, or it is determined that we should have known, that information we provide to form the basis for a claim for government payment is false or fraudulent.
Liability under such federal and state statutes and regulations may arise if we know, or it is determined Molina Healthcare, Inc. 2025 Form 10-K | 17 that we should have known, that information we provide to form the basis for a claim for government payment is false or fraudulent, and some courts have permitted False Claims Act suits to proceed if the claimant was out of compliance with program requirements.
The expected start of operations and other final contract terms are still pending. Virginia Procurement—Medicaid. In April of 2024, the Virginia Department of Medical Assistance Services (“DMAS”) issued a notice of intent to award which did not include our Virginia health plan as an awardee for its Cardinal Care Managed Care (“CCMC”) procurement.
In April 2024, the Virginia Department of Medical Assistance Services (“DMAS”) issued a notice of intent to award which did not include our Virginia health plan as an awardee for its Cardinal Care Managed Care (“CCMC”) 2.0 procurement. We exercised our right to protest that decision, but DMAS upheld its issued notice of intent to award.
KEY DEVELOPMENTS We are pleased with the continued success of our profitable growth strategy, which included strong performance on Medicaid state procurements in 2024, and the Bright Health Medicare and ConnectiCare acquisitions that we closed on January 1, 2024, and February 1, 2025, respectively.
KEY DEVELOPMENTS We are pleased with the continued success of our profitable growth strategy in 2025, which included strong performance on Medicaid state procurements in 2025, and the ConnectiCare acquisition that we closed as of February 1, 2025. Collectively, newly reported RFP successes and acquisitions in 2025 represent nearly $9 billion of incremental annual premium revenue.
HIPAA AND THE HITECH ACT In 1996, Congress enacted the Health Insurance Portability and Accountability Act (“HIPAA”). All health plans are subject to HIPAA, including ours.
HIPAA AND THE HITECH ACT In 1996, Congress enacted the Health Insurance Portability and Accountability Act, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”) and regulations implemented thereunder (collectively, “HIPAA”). All health plans are subject to HIPAA, including ours.
Medicare Advantage premiums are subject to retroactive increase or decrease based on the health status of our Medicare members, as measured by member risk scores determined pursuant to the CMS risk adjustment model. The data we provide to CMS to determine risk scores is subject to audit by CMS at the contract level, by plan year on an on-going basis.
We elect to participate in each Medicare service area or region on an annual basis. As mentioned above, MAPD premiums are subject to retroactive increase or decrease based on the health status of our Medicare members, as measured by member risk scores determined pursuant to the CMS risk adjustment model.
In 2019, we entered into an agreement with a third-party vendor who manages certain of our information technology services including, among other things, our infrastructure operations, end-user services, data centers, public cloud and application management. In 2022, we extended our agreement for an additional seven years.
We are committed to maintaining data integrity, implementing robust governance frameworks, and complying with applicable laws and regulations related to AI usage. In 2019, we entered into an agreement with a third party that manages certain of our information technology services including, among other things, our infrastructure operations, end-user services, data centers, public cloud and application management.
As a result of the agreement, we were able to reduce our administrative expenses, while improving the reliability of our information technology functions, and maintain targeted levels of service and operating performance. A portion of these services are provided on our premises, while other portions of the services are performed at the vendor’s facilities.
In 2022, we extended our agreement for an additional seven years. As a result of the agreement, we were able to reduce our administrative expenses, while improving the reliability of our information technology functions, and maintain targeted levels of service and operating performance.
Molina Healthcare, Inc. 2024 Form 10-K | 10 Our Medicare marketing and sales activities are regulated by CMS and the states in which we operate. CMS has oversight over all marketing materials used by Medicare Advantage plans, and in some cases has imposed advance approval requirements.
Generally, the enrollment period occurs between mid-October and early December for coverage that begins on the following January 1. Our Medicare marketing and sales activities are regulated by CMS and the states in which we operate. CMS has oversight over all marketing materials used by Medicare Advantage plans, and in some cases has imposed advance approval requirements.
PROVIDERS We arrange healthcare services for our members through contracts with a vast network of providers, including independent physicians and physician groups, hospitals, ancillary providers, and pharmacies. We strive to ensure that our providers have the appropriate expertise and cultural and linguistic experience.
PROVIDERS We arrange access to healthcare services for our members through contracts with a vast network of providers, including independent physicians and physician groups, specialists, hospitals and other facilities, ancillary providers, and pharmacies. The quality, depth and scope of our provider network are essential if we are to ensure quality, cost-effective care for our members.
Under capitation payment arrangements, healthcare providers receive fixed, pre-arranged monthly payments per enrolled member, whereas under fee-for-service payment arrangements, healthcare providers are paid a fee for each particular service rendered. Our specialists care for patients for a specific episode or condition, usually upon referral from a primary care physician, and are usually compensated on a fee-for-service basis.
Primary care physicians may be paid under capitation or fee-for-service contracts and may receive additional compensation by providing certain preventive care services. Under capitation payment arrangements, healthcare providers receive fixed, pre-arranged monthly payments per enrolled member, whereas under fee-for-service payment arrangements, healthcare providers are paid a fee for each particular service rendered.
Basis for Premium Rates For Marketplace, we develop each state’s premium rates during the spring of each year for policies effective in the following calendar year.
These contracts have a one-year term ending on December 31, and new contracts are entered into each year following product certification. Basis for Premium Rates For Marketplace, we develop each state’s premium rates during the spring of each year for policies effective in the following calendar year.
Status of MMP Contracts In May 2022, CMS published a Final Rule that addressed the termination of the Financial Alignment Initiative Demonstration. Under a provision within the Final Rule, states can maintain their existing MMP through a two-year extension until December 31, 2025, so long as the applicable state provided CMS with a transition plan by October 1, 2022.
Under a provision within the Final Rule, states can maintain their existing MMP through a two-year extension until December 31, 2025, if the applicable state provided CMS with a transition plan by October 1, 2022. Our California MMP contract expired on December 31, 2022, and many of our California MMP members transitioned to Molina’s California D-SNP products in early 2023.
While our Marketplace sales activities are regulated by CMS (such as eligibility determinations), our marketing activities are regulated by the individual states in which we operate. Some states require us to obtain prior approval of our marketing materials, others simply require us to provide them with copies of our marketing materials, and some states do not request our marketing materials.
Some states require us to obtain prior approval of our marketing materials, others simply require us to provide them with copies of our marketing materials, and some states do not request our marketing materials. We are able to freely contact our members and provide them with marketing materials as long as those materials are fair and do not discriminate.
On January 30, 2023, CMS finalized its approach to RADV audits, including its decision to extrapolate the results of audit samples when calculating payment errors, which will also not include the Fee-For-Service Adjuster. CMS will apply extrapolation to audits for the 2018 payment year.
On January 30, 2023, CMS finalized its approach to RADV audits, including its decision to extrapolate the results of audit Molina Healthcare, Inc. 2025 Form 10-K | 9 samples when calculating payment errors, but without comparison of the audit results to a similar audit of the original Medicare program (fee-for-service adjuster, or “FFSA”).
As of December 31, 2024, 19 of our health plans were accredited by the National Committee for Quality Assurance (“NCQA”), and 17 of our health plans have earned NCQA’s Health Equity Accreditation, which is awarded to organizations that lead the market in providing culturally and linguistically sensitive services and work to reduce disparities in health care.
Additionally, 18 Medicaid and 13 Marketplace plans have earned NCQA’s Health Equity Accreditation, which is awarded to organizations that lead the market in providing culturally and linguistically sensitive services and work to reduce disparities in health care. Additionally, eight health plans earned NCQA’s Long Term Services and Supports Distinction.
Physicians We contract with both primary care physicians and specialists, many of whom are organized into medical groups or independent practice associations. Primary care physicians provide office-based primary care services. Primary care physicians may be paid under capitation or fee-for-service contracts and may receive additional compensation by providing certain preventive care services.
Physicians, Physician Groups and Specialists We contract with both primary care physicians and specialists, many of whom are organized into medical groups or independent practice associations.
Our California Medicaid contracts represented premium revenue of approximately $4,121 million, or 13%, of our consolidated Medicaid premium revenue in 2024. New York. Our presence in New York increased substantially after completion of the Magellan Complete Care acquisition in December 2020, the Affinity Health Plan acquisition in October 2021 and the AgeWell New York acquisition in 2022.
Our California Medicaid contracts represented premium revenue of approximately $4,170 million, or 13%, of our consolidated Medicaid premium revenue in 2025. New York. Our presence in New York increased substantially after completion of several acquisitions in 2020 through 2022. We serve Medicaid members in 28 counties in New York.
The new Medicaid contract commenced on October 1, 2024. The new contract is expected to have a duration of five years, with an option for three one-year extensions. Mississippi Procurement—Medicaid. In the second quarter of 2024, the Mississippi Division of Medicaid extended the existing contracts for the state fiscal year that began on July 1, 2024.
The contract commenced on January 1, 2025, and is expected to have a duration of two years, with an option for three two-year extensions. Nevada Procurement—Medicaid.
These proposals include elements such as the following, as well as numerous other potential changes and reforms: • Changes in the entitlement nature of Medicaid (and perhaps Medicare as well) by capping future increases in federal health spending for these programs, reducing the FMAP, paid to states by the federal government, overall or solely for the ACA Medicaid expansion population in states, and shifting much more of the risk for health costs in the future to states and consumers; • Reversing the ACA’s expansion of Medicaid that enables states to cover low-income childless adults; • Changing Medicaid to a state block grant program, including potentially capping spending on a per-enrollee basis; • Requiring Medicaid beneficiaries to work; • Limiting the amount of lifetime benefits for Medicaid beneficiaries; • Raising Medicare eligibility to age 67; and • In some states, shifting to an alignment of Medicaid and Medicare for dual eligible members.
Such proposals have, among other things, included the following potential changes and reforms: • Changes in the entitlement nature of Medicaid (and perhaps Medicare) by capping future increases in federal health spending for these programs, reducing the FMAP, paid to states by the federal government, and shifting more of the risk for health costs to states and consumers; • Changing Medicaid to a state block grant program, including potentially capping spending on a per-enrollee basis; • Requiring Medicaid beneficiaries to work; • Limiting the amount of lifetime benefits for Medicaid beneficiaries; • Raising Medicare eligibility to age 67; • Full repeal of the ACA; • Providing for insurance plans that offer fewer and less extensive health insurance benefits than currently required by the ACA, including broader use of catastrophic coverage plans, or short-term health insurance; • Expanding and encouraging the use of private health savings accounts; • Establishing and funding high risk pools or reinsurance programs for individuals with chronic or high-cost conditions; and • Allowing insurers to sell insurance across state lines.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn 2025, we are participating in the Marketplace in all our markets except Arizona, Iowa, Massachusetts, Nebraska, New York, and Virginia. Our Marketplace plans allow our Medicaid members to stay with their providers as they transition between Medicaid and the Marketplace.
Biggest changeOur Marketplace business has been volatile and unpredictable, and has been subject to annual programmatic changes that are difficult to price for actuarially. We offer Marketplace plans in many of the states where we offer Medicaid health plans. In 2026, we are participating in the Marketplace in all our markets except Arizona, Iowa, Massachusetts, Michigan, Nebraska, New York, and Wisconsin.
If we do not maintain our Star ratings above 3.0 or continue to improve our Star ratings, fail to meet or exceed our competitors’ Star ratings, or if quality-based bonus payments are reduced or eliminated, we may experience a negative impact on our revenues and the benefits that our plans can offer, which could materially and adversely affect the marketability of our plans, our membership levels, results of operations, financial condition, and cash flows.
If we do not maintain our Star ratings above 3.0 or continue to improve our Star ratings, fail to meet or exceed our competitors’ Star ratings, or if quality-based bonus payments are reduced or eliminated, we may experience a negative impact on our revenues and the benefits that our plans can offer, which could materially and adversely affect the marketability of our plans, our membership levels, results of operations, financial condition, or cash flows.
Any security breach involving the misappropriation, loss, or other unauthorized disclosure or use of confidential member information, whether by us or by our vendors, could subject us to civil and criminal penalties, divert management’s time and energy, and have a material adverse effect on our business, financial condition, cash flows, or results of operations.
Any security breach involving the misappropriation, loss, or other unauthorized disclosure or use of member Confidential Information, whether by us or by our vendors, could subject us to civil and criminal penalties, divert management’s time and energy, and have a material adverse effect on our business, financial condition, cash flows, or results of operations.
In particular, presidential, congressional, state and local elections in the United States could result in significant changes in, and uncertainty with respect to, tax legislation, regulation and government policy directly affecting our business or indirectly affecting us because of impacts on our customers, members, providers and third-party vendors and service suppliers.
In particular, presidential, congressional, state and local elections in the United States could result in significant changes in, and uncertainty with respect to, tax legislation, regulation and government policy directly affecting our business or indirectly affecting us because of impacts on our customers, members, providers, third-party vendors, and service suppliers.
Because we receive payments from federal and state governmental agencies, we are subject to various laws commonly referred to as “fraud and abuse” laws, including federal and state anti-kickback statutes, prohibited referrals, and the federal False Claims Act, which permit agencies and enforcement authorities to institute a suit against us for violations and, in some cases, to seek treble damages, criminal and civil fines, penalties, and assessments.
Because we receive payments from federal and state governmental agencies, we are subject to various laws commonly referred to as “fraud and abuse” laws, including federal and state anti-kickback statutes, prohibited referrals, and the federal False Claims Act, which permit agencies and enforcement authorities to institute a suit against us for purported violations and, in some cases, to seek treble damages, criminal and civil fines, penalties, and assessments.
Our Credit Agreement, and the indentures governing our notes, require us to comply with various covenants that impose restrictions on our operations, including our ability to incur additional indebtedness, create liens, pay dividends, make certain investments or other restricted payments, sell or otherwise dispose of substantially all of our assets and engage in other activities.
Our New Credit Agreement, and the indentures governing our notes, require us to comply with various covenants that impose restrictions on our operations, including our ability to incur additional indebtedness, create liens, pay dividends, make certain investments or other restricted payments, sell or otherwise dispose of substantially all of our assets and engage in other activities.
During such time, the extent of any harm or how best to remediate it might not be known, which could further increase the risks, costs, and consequences of a data security incident. In addition, our systems must be routinely updated, patched, and upgraded to protect against known vulnerabilities.
During such time, the extent of any harm or how best to remediate it might not be known, which could further increase the risks, costs, and consequences of a data security incident. In addition, our IT Systems must be routinely updated, patched, and upgraded to protect against identified vulnerabilities.
In addition, meritorious false claims actions could result in fines, or debarment from the Medicare, Medicaid, or other state or federal healthcare programs. If we are subject to liability under a qui tam or other actions, our business, financial condition, cash flows, or results of operations could be adversely affected.
In addition, false claims actions could result in fines or debarment from the Medicaid, Medicare, or other state or federal healthcare programs. If we are subject to liability under a qui tam or other actions, our business, financial condition, cash flows, or results of operations could be adversely affected.
If one or any combination of these factors were to occur, our internal sources of liquidity may prove to be insufficient, and in such case, we may not be able to successfully obtain sufficient additional financing on favorable terms, within an acceptable time, or at all.
If one or any combination of these factors were to occur, our internal sources of liquidity may prove to be insufficient, and in such case, we may not be able to successfully obtain sufficient additional financing on favorable terms, within an acceptable time period, or at all.
Any changes to the laws and regulations governing our business, or the interpretation and enforcement of those laws or regulations implemented by the new Trump Administration, could require us to modify our operations and could negatively impact our operating results. Our business is extensively regulated by the federal government and the states in which we operate.
Any changes to the laws and regulations governing our business, or the interpretation and enforcement of those laws or regulations implemented by the Trump administration, could require us to modify our operations and could negatively impact our operating results. Our business is extensively regulated by the federal government and the states in which we operate.
Where doing so is necessary in order to conduct our business, we also provide sensitive personal member information, as well as proprietary or confidential information relating to our business, to our third-party service providers. Those third-party service providers may also be subject to data intrusions or data breaches.
Where doing so is necessary in order to conduct our business, we also provide sensitive member Personal Information, as well as Confidential Information relating to our business, to our third-party service providers. Those third-party service providers may also be subject to data intrusions or data breaches.
If we are unsuccessful in recruiting, retaining, managing, protecting, and motivating such personnel, our business, financial condition, cash flows, or results of operations could be adversely affected. We face risks related to litigation.
If we are unsuccessful in recruiting, retaining, managing, protecting, and motivating such personnel, our business, financial condition, cash flows, or results of operations could be adversely affected. We face risks related to litigation or arbitration.
Our systems are also subject to compromise from internal threats such as improper action by employees, including malicious insiders, or by vendors, counterparties, and other third parties with otherwise legitimate access to our systems.
Our IT Systems are also subject to compromise from internal threats such as improper action by employees, including malicious insiders, or by vendors, counterparties, and other third parties with otherwise legitimate access to our systems.
Some of our competitors have been subject to substantial sanctions related to allegations of improper transfer pricing practices. Further, our principal pharmacy benefit manager, or PBM, CVS Caremark (“CVS”), is party to certain lawsuits and putative class actions regarding its drug pricing practices and its rebate arrangements with drug manufacturers.
Some of our competitors have been subject to substantial sanctions related to allegations of improper transfer pricing practices. Further, our principal pharmacy benefit manager, or PBM, Caremark, is party to certain lawsuits and putative class actions regarding its drug pricing practices and its rebate arrangements with drug manufacturers.
Our acquisitions and the related integration activities involve a number of risks, including the following: • The transition services that a seller may have agreed to provide following the closing may not be provided in a timely or efficient manner, or certain necessary transition services may not be provided at all; similarly, any agreement by us to provide “reverse transition services” to a seller may be unduly burdensome, inefficient, and costly; • Unforeseen expenses or delays associated with the acquisition and/or integration; • The assumptions underlying our expectations regarding the integration process or the expected benefits to be achieved from an acquisition may prove to be incorrect; • Maintaining employee morale and retaining key management and other employees, and satisfactorily addressing any differences in corporate culture; • Difficulties retaining the business and operational relationships of the acquired business, and attracting new business and operational relationships; • Unanticipated attrition in the membership of the acquired business pending the completion of the proposed transaction or after the closing of the transaction; • Unanticipated difficulties or costs in integrating information technology, communications, and other systems, consolidating corporate and administrative infrastructures, and eliminating duplicative operations; • Attention to integration activities may divert management’s attention from ongoing business concerns, which could result in performance shortfalls; • Successfully addressing the challenges inherent in managing a larger company and coordinating geographically separate organizations; and • Delays in obtaining, or inability to obtain, necessary state or federal regulatory approvals, or such approvals may impose conditions that were not anticipated.
Our acquisitions and the related integration activities involve a number of risks, including the following: • The transition services that a seller may have agreed to provide following the closing may not be provided in a timely or efficient manner, or certain necessary transition services may not be provided at all; similarly, any agreement by us to provide “reverse transition services” to a seller may be unduly burdensome, inefficient, and costly; • Unforeseen expenses or delays associated with the acquisition and/or integration, including the unexpected emergence of liabilities of the acquired entity that had not previously been disclosed or foreseen; • The assumptions underlying our expectations regarding the integration process or the expected benefits to be achieved from an acquisition may prove to be incorrect; • Maintaining employee morale and retaining key management and other employees, and satisfactorily addressing any differences in corporate culture; • Difficulties retaining the business and operational relationships of the acquired business, and attracting new business and operational relationships; • Unanticipated attrition in the membership of the acquired business pending the completion of the proposed transaction or after the closing of the transaction; • Unanticipated difficulties or costs in integrating information technology, communications, and other systems, consolidating corporate and administrative infrastructures, and eliminating duplicative operations; • Attention to integration activities may divert management’s attention from ongoing business concerns, which could result in performance shortfalls; • Successfully addressing the challenges inherent in managing a larger company and coordinating geographically separate organizations; and • Delays in obtaining, or inability to obtain, necessary state or federal regulatory approvals, or such approvals may impose conditions that were not anticipated.
Fraud, waste and abuse prohibitions encompass a wide range of operating activities, including kickbacks or other inducements for referral of members or for the coverage of products (such as prescription drugs) by a plan, billing for unnecessary medical services by a provider, upcoding, payments made to excluded providers, improper marketing, and the violation of patient privacy rights.
Fraud, waste and abuse prohibitions encompass a wide range of operating activities, including kickbacks or other inducements for referral of members or for the coverage of products (such as prescription drugs) by a plan, billing for unnecessary medical services by a provider, up-coding, payments made to excluded providers, improper marketing, and the violation of patient privacy rights.
In the event we need access to additional capital to pay our operating expenses, fund subsidiary surplus requirements, make payments on or refinance our indebtedness, pay capital expenditures, or fund acquisitions, our ability to obtain such capital may be limited and the cost of any such capital may be significant, particularly if we are unable to access our existing revolving credit facility.
In the event we need access to additional capital to pay our operating expenses, fund health plan subsidiary capital reserve and surplus requirements, make payments on or refinance our indebtedness, pay capital expenditures, or fund acquisitions, our ability to obtain such capital may be limited and the cost of any such capital may be significant, particularly if we are unable to access our revolving credit facility.
We may be unable to successfully integrate our acquisitions or realize the anticipated benefits of such acquisitions. Our growth strategy includes the pursuit of targeted inorganic growth opportunities that we believe will provide a strategic fit, leverage operational synergies, and lead to incremental earnings accretion.
We may be unable to successfully integrate our acquisitions or realize the anticipated benefits of such acquisitions, including the full realization of our embedded earnings. Our growth strategy includes the pursuit of targeted inorganic growth opportunities that we believe will provide a strategic fit, leverage operational synergies, and lead to incremental earnings accretion.
Although most of our health plans over the last several years have generally operated with profit margins higher than those of our direct competitors, nevertheless the profit margins in our industry are low (in the single digits) compared to the profit margins in most other industries.
Although most of our health plans over the last several years have generally operated with profit margins higher than those of our direct competitors, nevertheless the profit margins of our health plans are low (in the single digits) compared to the profit margins in most other industries or business sectors.
Other conditions that could impact our members include a virulent flu season or epidemic, such as a resurgence of COVID-19, or new viruses for which vaccines may not exist, are not effective, or have not been widely administered.
Other conditions that could impact our members include a virulent flu season or epidemic, a resurgence of COVID-19, or the emergence of new viruses for which vaccines may not exist, are not effective, or have not been widely administered.
Many factors may affect our medical care costs, including: • the level of utilization of healthcare services; • changes in the underlying risk acuity of our membership; • unexpected patterns in the annual flu season; • increases in hospital costs; • increased incidences or acuity of high dollar claims related to catastrophic illnesses or medical conditions for which we do not have adequate reinsurance coverage; • increased maternity costs; • changes in state eligibility certification methodologies; • relatively low levels of hospital and specialty provider competition in certain geographic areas; • increases in the cost of pharmaceutical products and services; • changes in healthcare regulations and practices; • epidemics or pandemics; • new medical technologies; and • other various external factors.
Many factors may affect our medical care costs, including: • the level of utilization of healthcare services; • changes in the underlying risk acuity of our membership; • unexpected patterns in the annual flu season; • increases in hospital costs, pharmacy costs, or behavior healthcare costs; • increased incidence or acuity of high dollar claims related to catastrophic illnesses or medical conditions for which we do not have adequate reinsurance coverage; • changes in state eligibility certification methodologies; • relatively low levels of hospital and specialty provider competition in certain geographic areas; • changes in healthcare regulations and practices; • epidemics or pandemics; • new medical technologies or new pharmaceutical treatments or other innovative therapies; and • other various external factors.
To the extent that such changes have a negative impact on us, our customers, members, providers and third-party vendors and service suppliers, including as a result of related uncertainty, these changes may materially and adversely affect our business, prospects, financial condition and operating results. Molina Healthcare, Inc. 2024 Form 10-K | 34
To the extent that such changes have a negative impact on us, our customers, members, providers, third-party vendors and service suppliers, including as a result of related uncertainty, these changes may materially and adversely affect our business, prospects, financial condition, or results of operations. Molina Healthcare, Inc. 2025 Form 10-K | 35
If errors are identified during a RADV audit, or it is otherwise determined that we fail to comply with applicable laws and regulations, we could be subject to fines, civil penalties or other sanctions, which could have a material adverse effect on our ability to participate in these programs, and on our financial condition, cash flows and results of operations.
If errors are identified during a RADV audit, or it is otherwise determined that we fail to comply with applicable laws and regulations, we could be subject to fines, civil penalties, or other sanctions, which could have a material adverse effect on our ability to participate in these Molina Healthcare, Inc. 2025 Form 10-K | 29 programs, and on our financial condition, cash flows, or results of operations.
We currently derive our premium revenues from health plans that operate in 21 states. Our Medicaid premium revenue constituted 79% of our consolidated premium revenue in the year ended December 31, 2024.
We currently derive our premium revenues from health plans that operate in 21 states. Our Medicaid premium revenue constituted 75% of our consolidated premium revenue in the year ended December 31, 2025.
Moreover, our programs to detect, contain, and respond to data security incidents as well as contingency plans and insurance coverage for potential liabilities of this nature may not be sufficient to cover all claims and liabilities.
Moreover, our programs to detect, contain, and respond to data security incidents as well as contingency plans may not be effective in preventing or mitigating all incidents and insurance coverage for potential liabilities of this nature may not be sufficient to cover all claims and liabilities.
Even if we are successful in defending qui tam actions against us, the fact that these actions were filed against us, even if ultimately determined to be without merit, could result in expensive defense costs, and also could have an adverse impact on our reputation and our ability to obtain regulatory approval for acquisitions that we may pursue.
Even if we are successful in defending qui tam actions against Molina Healthcare, Inc. 2025 Form 10-K | 30 us, the fact that these actions were filed against us, even if ultimately determined to be without merit, could result in expensive defense costs, and also could have an adverse impact on our reputation and our ability to obtain regulatory approval for acquisitions that we may pursue.
Therefore, it is not possible to predict all of the risks and potentially unintended consequences related to the use of AI by vendors, third-party developers, or the Company. Molina Healthcare, Inc. 2024 Form 10-K | 27 An impairment charge with respect to our recorded goodwill, or our finite-lived intangible assets, could have a material impact on our financial results.
Therefore, it is not possible to predict all of the risks and potentially unintended consequences related to the use of AI by vendors, third-party developers, or the Company. An impairment charge with respect to our recorded goodwill, or our finite-lived intangible assets, could have a material impact on our financial results.
In addition, this could negatively affect our operations, cause system disruptions, damage our reputation, cause membership losses and contract breaches, and could also result in regulatory enforcement actions, material fines and penalties, litigation, or other actions that could have a material adverse effect on our business, cash flows, financial condition, or results of operations.
In addition, this could negatively affect our operations, cause system disruptions, damage our reputation, cause membership losses and contract breaches, and could also result in regulatory investigations or enforcement actions, material fines and penalties, contractual liquidated damages, litigation or proceedings (such as class actions), or other actions that could have a material adverse effect on our business, cash flows, financial condition, or results of operations.
The loss of their leadership, expertise, and experience could negatively impact our operations. In addition, recently the threat environment for senior health care executives has worsened considerably, and the need for appropriate security to combat such threats could distract or disrupt senior management from performing their job responsibilities.
The loss of their leadership, expertise, and experience could negatively impact our operations. In addition, recently the threat Molina Healthcare, Inc. 2025 Form 10-K | 34 environment for senior health care executives has worsened considerably, and the need for appropriate security to combat such threats could distract or disrupt senior management from performing their job responsibilities.
Noncompliance with any privacy, security or data protection laws and regulations, or any security breach, cyber-attack, or cyber-security breach, and any incident involving the misappropriation, theft, loss, or other unauthorized disclosure or use of, or access to, sensitive or confidential information, whether by us or by one of our third-party service providers, could require us to expend significant resources to continue to modify or enhance our protective measures and to remediate any damage.
Molina Healthcare, Inc. 2025 Form 10-K | 23 Noncompliance with any privacy, security, or data protection laws and regulations, or any security breach, cyber-attack, or cyber-security breach, and any incident involving the misappropriation, theft, loss, or other unauthorized disclosure or use of, or access to, IT Systems or sensitive or Confidential Information, whether by us or by one of our third-party service providers, could require us to expend significant resources to continue to modify or enhance our protective measures and to remediate any damage.
Molina Healthcare, Inc. 2024 Form 10-K | 28 Further, the Star Rating System utilized by CMS to evaluate Medicare plans may have a significant effect on our revenue, as higher-rated plans tend to experience increased enrollment and plans with a Star rating of 4.0 or higher are eligible for quality-based bonus payments.
Further, the Star Rating System utilized by CMS to evaluate Medicare plans may have a significant effect on our revenue, as higher-rated plans tend to experience increased enrollment and plans with a Star rating of 4.0 or higher are eligible for quality-based bonus payments.
This makes our operations vulnerable to adverse effects if such third parties fail to perform adequately. For example, in February 2019, we entered into a master services agreement with a third party vendor who manages certain of our information technology infrastructure services including, among other things, our information technology operations, end-user services, and data centers.
This makes our operations vulnerable to adverse effects if such third parties fail to perform adequately. We are party to a master services agreement with a third party vendor who manages certain of our information technology infrastructure services including, among other things, our information technology operations, end-user services, and data centers.
In addition, any failure by us to comply with these restrictive covenants could result in an event of default under the Credit Agreement and, in some circumstances, under the indentures governing our notes, which, in any case, could have a material adverse effect on our financial condition.
In addition, any failure by us to comply with these restrictive covenants could result in an event of default under the New Credit Agreement and, in some circumstances, under the indentures governing our notes, which could have a material adverse effect on our business, financial condition, cash flows, or results of operations.
We are subject to a variety of legal actions that may affect our business, including but not limited to provider claims, employment related disputes and employee benefit claims, breach of contract actions, qui tam or False Claims Act actions, administrative matters before government agencies, tort claims, intellectual property-related litigation, and class actions of various kind.
We are subject to a variety of legal actions that may affect our business, including but not limited to provider claims, employment related claims, breach of contract actions, Qui Tam or False Claims Act actions, Civil Investigative Demands, class actions of various kind, including securities law class actions, derivative actions, administrative matters before government agencies, tort claims, and intellectual property-related litigation.
From time to time, states require us to reimburse them for premiums paid to us based on an eligibility list that a state later discovers contains individuals who are not in fact eligible for a government sponsored program or are eligible for a different premium category or a different program.
From time to time, states require us to reimburse them for premiums paid to us based on an eligibility list that a state later Molina Healthcare, Inc. 2025 Form 10-K | 26 discovers contains individuals who are not in fact eligible for a government sponsored program or are eligible for a different premium category or a different program.
Though the CHC incident was not material to us, any compromise of the confidential data of our members, employees, or business, or the failure to prevent or mitigate the loss of or damage to this data through breach, could result in operational, reputational, competitive, or other business harm, as well as financial costs and regulatory action.
Any compromise of the Confidential Information of our members, employees, or business, or the failure to prevent or mitigate the loss of or damage to this data through breach, could result in operational, reputational, competitive, or other business harm, as well as financial costs and regulatory action.
Our contracts require the submission of complete and correct encounter data. The accurate and timely reporting of encounter data is increasingly important to the success of our programs because more states are using encounter data to determine compliance with performance standards and to set premium rates.
Our contracts require the submission of complete and correct encounter data. The accurate and timely reporting of Molina Healthcare, Inc. 2025 Form 10-K | 27 encounter data is increasingly important to the success of our programs because more states are using encounter data to determine compliance with performance standards and to set premium rates.
Large-scale medical emergencies in one or more states in which we operate our health plans could significantly increase utilization rates and medical costs. Large-scale medical emergencies can take many forms and be associated with widespread illness or medical conditions.
Molina Healthcare, Inc. 2025 Form 10-K | 32 Large-scale medical emergencies in one or more states in which we operate our health plans could significantly increase utilization rates and medical costs. Large-scale medical emergencies can take many forms and be associated with widespread illness or medical conditions.
Measured by Medicaid premium revenue by health plan, our top four health plans were in California, New York, Texas, and Washington, with aggregate Medicaid premium revenue of $15.6 billion, or approximately 51% of total Medicaid premium revenue, in the year ended December 31, 2024.
Measured by Medicaid premium revenue by health plan, our top four health plans were in California, New York, Texas, and Washington, with aggregate Medicaid premium revenue of $17.3 billion, or approximately 54% of total Medicaid premium revenue, in the year ended December 31, 2025.
The unpredictable nature of these factors may have a material adverse effect on our business, financial condition, cash flows, or results of operations. Molina Healthcare, Inc. 2024 Form 10-K | 30 Increases in our pharmaceutical costs could have a material adverse effect on the level of our medical costs and our results of operations.
The unpredictable nature of these factors may have a material adverse effect on our business, financial condition, cash flows, or results of operations. Increases in our pharmaceutical costs could have a material adverse effect on the level of our medical costs and our results of operations.
Molina Healthcare, Inc. 2024 Form 10-K | 32 Our access to additional financing will depend on a variety of factors such as prevailing economic and credit market conditions, the general availability of credit, the overall availability of credit to our industry, our credit ratings and credit capacity, and perceptions of our financial prospects.
Our access to additional financing will depend on a variety of factors, such as prevailing economic and credit market conditions, the general availability of credit, the overall availability of credit to our industry, our credit ratings and credit capacity, and perceptions of our financial prospects.
Failure to attain profitability in any newly acquired health plans or new start-up operations could negatively affect our results of operations. Start-up costs associated with a new business can be substantial.
Molina Healthcare, Inc. 2025 Form 10-K | 24 Failure to attain profitability in any newly acquired health plans or new start-up operations could negatively affect our results of operations. Start-up costs associated with a new business can be substantial.
Any variation from our cost expectations regarding acuity, enrollment levels, adverse selection, or other assumptions utilized in setting premium rates, could have a material adverse effect on our results of operations, financial position, and cash flows. In addition, the non-renewal of Marketplace premium subsidies starting in 2026 could negatively impact our Marketplace enrollment.
Any variation from our cost expectations regarding acuity, enrollment levels, adverse selection, or other assumptions utilized in setting premium rates, could have a material adverse effect on our results of operations, financial position, and cash flows.
As part of our normal operations, we routinely collect, process, store (both onsite and in the cloud), and transmit large amounts of data, including sensitive personal information as well as proprietary or confidential information relating to our business or third parties.
As part of our normal operations, we and certain of our third-party service providers routinely collect, process, store (both onsite and in the cloud), and transmit large amounts of data, including sensitive Personal Information as well as proprietary or confidential information relating to our members, employees, business, or other third parties (collectively, “Confidential Information”).
If the actuarial assumptions made by a state in implementing a rate or benefit change or update are incorrect or are at variance with the prevailing medical cost trend or particular utilization patterns of the members of one or more of our health plans, our medical margins could be reduced.
Further, if the actuarial assumptions made by a state in implementing a rate or benefit change are incorrect or quickly become outdated, or if they are at variance with or do not keep pace with the prevailing medical cost trend or particular utilization patterns of the members of one or more of our health plans, our medical margins could be reduced or eliminated.
The process of enhancing our protective measures can itself create a risk of systems disruptions and security issues. Given the breadth of our operations and the increasing sophistication of cyberattacks, a particular incident could occur and persist for an extended period of time before being detected.
Moreover, we face the ongoing challenge of managing access controls in a complex environment. The process of enhancing our protective measures can itself create a risk of systems disruptions and security issues. Given the breadth of our operations and the increasing sophistication of cyberattacks, a particular incident could occur and persist for an extended period of time before being detected.
If we are unable to continue to operate in any of our existing jurisdictions, or if our current operations in those jurisdictions or any portions of those jurisdictions are significantly curtailed or terminated entirely, our revenues could decrease materially.
If we are unable to continue to operate in any of our Molina Healthcare, Inc. 2025 Form 10-K | 21 existing jurisdictions, or if our current operations in those jurisdictions or any portions of those jurisdictions are significantly curtailed or terminated entirely, our revenues could decrease materially.
Our ability to accurately estimate claims for our newer lines of business or populations is negatively impacted by the more limited experience we have had with those newer lines of business or populations.
Our Molina Healthcare, Inc. 2025 Form 10-K | 25 ability to accurately estimate claims for our newer lines of business or populations is negatively impacted by the more limited experience we have had with those newer lines of business or populations.
Moreover, many states are now requiring Medicare to be offered by a health plan if that health plan is awarded a Medicaid contract. These new requirements could impact our readiness status or eligibility under certain state Medicaid programs or contracts.
The economic impact of such transitions to D-SNP on our premium revenues is uncertain. Moreover, many states are now requiring Medicare to be offered by a health plan if that health plan is awarded a Medicaid contract. These new requirements could impact our readiness status or eligibility under certain state Medicaid programs or contracts.
It is possible that new laws, regulations and other requirements, or amendments to or changes in interpretations of existing laws, regulations and other requirements, may require us to incur significant costs, implement new processes, or change our handling of information and business operations, which could ultimately hinder our ability to grow our business by extracting value from our data assets.
Even though we believe we and our vendors are generally in compliance with applicable laws, rules and regulations relating to privacy and data security, it is possible that new laws, regulations and other requirements, or amendments to or changes in interpretations of existing laws, regulations and other requirements, may require us to incur significant costs, implement new processes, or change our handling of information and business operations, which could ultimately hinder our ability to grow our business by extracting value from our data assets.
Because of these financial inducements offered to plaintiffs, qui tam actions have increased significantly in recent years, causing greater numbers of healthcare companies to incur the costs of having to defend false claims actions, many of which are spurious and without merit.
Because of these financial inducements offered to plaintiffs, qui tam actions have increased significantly in recent years, causing greater numbers of healthcare companies to incur the costs of having to defend against false claims actions, including the costs associated with responding to exploratory Civil Investigative Demands brought by the government, many of which are spurious and without merit.
We may not be successful in our artificial intelligence (“AI”) administrative and operational initiatives, which could adversely affect our business or reputation. As part of our operating efficiencies, we are making appreciable investments in certain AI administrative tools and initiatives to enhance our operations and to save costs.
We may not be successful in our AI administrative and operational initiatives, which could adversely affect our business or reputation. As part of our operating efficiencies, we are making appreciable investments in certain AI administrative tools and initiatives to enhance our operations and to save costs. The development and use of AI technologies is still in its early stages.
If we are unsuccessful in achieving the stated performance measure, we will be unable to recognize the revenue associated with that measure, which could have a material adverse effect on our business, financial condition, cash flows, or results of operations. Our Medicaid premium revenues could be adversely impacted by retroactive adjustments or states’ delays in implementing rate changes.
If we are unsuccessful in achieving the stated performance measure, we will be unable to recognize the revenue associated with that measure, which could have a material adverse effect on our business, financial condition, cash flows, or results of operations.
RISKS RELATED TO OUR BUSINESS If the responsive bids of our health plans for new or renewed Medicaid contracts are not successful, or if our government contracts are terminated or are not renewed on favorable terms, our premium revenues could be materially reduced and our operating results could be negatively impacted.
If the responsive bids of our health plans for new or renewed Medicaid contracts are not successful, or if our government contracts are terminated or are not renewed on favorable terms, our premium revenues could be materially reduced, our operating results could be negatively impacted, and we may not realize the full projected amount of our embedded earnings.
RISKS RELATED TO OUR INDUSTRY Medicaid enrollees continue to be subject to eligibility redeterminations and potential disenrollments on a state by state basis, and the number and health acuity level of Medicaid enrollees we retain may be lower than our current estimates.
RISKS RELATED TO OUR INDUSTRY Medicaid enrollees continue to be subject to eligibility redeterminations and potential disenrollments on a state by state basis, and the number and health acuity level of Medicaid enrollees we retain may be lower than our current estimates. Following the end of the COVID-19 public health emergency, we lost approximately 675,000 members due to eligibility redeterminations.
Pursuant to the 2023 CMS Medicare Final Rule, which requires MMP plans to end no later than December 2025, the five states in which we operate MMPs – Illinois, Michigan, Ohio, South Carolina, and Texas – have filed transition plans with CMS to move to D-SNPs by January 1, 2026.
Pursuant to the 2023 CMS Medicare Final Rule, which requires MMP plans to end no later than December 2025, the five states in which we operate MMPs – Illinois, Michigan, Ohio, South Carolina, and Texas – transitioned their current MMP contracts to integrated D-SNP contracts on January 1, 2026.
Any such future litigation or governmental investigation could divert the attention of management from the operation of our business, result in reputational damage, and have a material adverse impact on our business, cash flows, financial condition, and results of operations.
Any adverse impact to the availability, integrity or confidentiality of our IT Systems or Confidential Information, or related litigation, and governmental investigations could divert the attention of management from the operation of our business, result in reputational damage, and have a material adverse impact on our business, cash flows, financial condition, and results of operations.
Our business is dependent on effective and secure information systems that assist us in processing provider claims, monitoring utilization and other cost factors, supporting our medical management techniques, providing data to our Molina Healthcare, Inc. 2024 Form 10-K | 26 regulators, and implementing our data security measures.
Our business is dependent on effective and secure information systems, cloud providers and artificial intelligence (“AI”) capabilities that assist us in processing provider claims, monitoring utilization and other cost factors, supporting our medical management techniques, providing data to our regulators, and implementing our data security measures.
Our facilities and IT systems, or those of our service providers, may also be vulnerable to security incidents or security attacks, acts of vandalism or theft, misplaced or lost data, human errors, or other similar events that could negatively affect our systems and our and our members’ data. For example, in July 2024, a software update by CrowdStrike Holdings, Inc.
Our facilities and IT Systems, or those of our service providers, may also be vulnerable to security incidents or security attacks, acts of vandalism or theft, misplaced or lost data, human errors, or other similar events that could negatively affect our systems or our members’ data, or could cause interruptions to our operations.
Liability under such federal and state statutes and regulations may arise if we know, or it is determined that we should have known, that information we provide to form the basis for a claim for government payment is false or fraudulent.
Liability under such federal and state statutes and regulations may arise if we know, or it is determined that we should have known, that information we provide to form the basis for a claim for government payment is false or fraudulent, and some courts have permitted False Claims Act suits to proceed if the claimant was out of compliance with program requirements.
If a major earthquake or wildfire were to strike near our location in Southern California, our corporate functions and claims processing could be impaired for an unforeseen period of time.
Southern California is exposed to a statistically greater risk of a major earthquake and wildfires than most other parts of the United States. If a major earthquake or wildfire were to strike near our location in Southern California, our corporate functions and claims processing could be impaired for an unforeseen period of time.
The success of acquisitions we make will depend, in part, on our ability to successfully combine our existing business with such acquired businesses and realize the anticipated benefits, including Molina Healthcare, Inc. 2024 Form 10-K | 22 synergies, cost savings, growth in earnings, innovation, and operational efficiencies.
The integration of acquired businesses with our existing business is a complex, costly, and time-consuming process. The success of acquisitions we make will depend, in part, on our ability to successfully combine our existing business with such acquired businesses and realize the anticipated benefits, including synergies, cost savings, growth in earnings, innovation, and operational efficiencies.
For example, to obtain a certificate of authority to operate as a health maintenance organization in most jurisdictions, we must first establish a provider network, develop and establish infrastructure and required systems, and demonstrate our ability to process claims. In 2023, we incurred substantial one-time contract implementation costs related to our expansions in Los Angeles County, Iowa, and Nebraska.
For example, to obtain a certificate of authority to operate as a health maintenance organization in most jurisdictions, we must first establish a provider network, develop and establish infrastructure and required systems, and demonstrate our ability to process claims.
For example, if our overall medical care ratio of 89.1% for the year ended December 31, 2024, had been one percentage point higher, or 90.1%, our net income per diluted share for the year ended December 31, 2024 would have been approximately $15.18 rather than our actual net income per diluted share of $20.42, a difference of $5.24.
For example, if our overall medical care ratio of 91.7% for the year ended December 31, 2025, had been one percentage point higher, or 92.7%, our net income per diluted share for the year ended December 31, 2025 would have been approximately $2.72 rather than our actual net income per diluted share of $8.92, a difference of $6.20.
Our information technology systems and safety control systems that we rely upon are subject to a growing number of threats, such as state-sponsored organizations, opportunistic hackers and hacktivists, as well as through diverse attack vectors, such as social engineering/phishing, malware (including ransomware), malfeasance by insiders, human or technological error, and as a result of malicious code embedded in open-source software, or misconfigurations, bugs or other vulnerabilities in commercial software that is integrated into our (or our suppliers’ or service providers’) IT systems, products or services.
We and our third-party suppliers and service providers face numerous and evolving cybersecurity risks that threaten the confidentiality, integrity and availability of IT Systems and Confidential Information, including from diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists, as well as through diverse attack vectors, such as social engineering/phishing, malware (including ransomware), malfeasance by insiders, human or technological error, and as a result of malicious code embedded in open-source software, or misconfigurations, bugs or other vulnerabilities in commercial software that is integrated into our (or our suppliers’ or service providers’) IT Systems, products or services.
The volume of new software vulnerabilities has increased substantially, as has the importance of patches and other remedial measures. In addition to remediating newly identified vulnerabilities, previously identified vulnerabilities must also be updated. We are at risk that cyber attackers exploit these known vulnerabilities before they have been addressed.
The volume of new software vulnerabilities has increased substantially, as has the importance of patches and other remedial measures. In addition to remediating newly identified vulnerabilities, previously identified vulnerabilities must also be updated.
Additionally, our plans remove financial barriers to quality care and seek to minimize Molina Healthcare, Inc. 2024 Form 10-K | 20 members' out-of-pocket expenses. We develop each state’s Marketplace premium rates during the spring of each year for policies effective in the following calendar year.
Our Marketplace plans allow our Medicaid members to stay with their providers as they transition between Medicaid and the Marketplace. Additionally, our plans remove financial barriers to quality care and seek to minimize members' out-of-pocket expenses. We develop each state’s Marketplace premium rates during the spring of each year for policies effective in the following calendar year.
We may be unable to anticipate these techniques or implement adequate preventive measures, resulting in potential inappropriate access, breach, or data loss and damage to our systems.
We may be unable to anticipate these techniques, which can circumvent security controls, evade detection and remove forensic evidence, or implement adequate preventive measures, resulting in potential inappropriate access, breach, or data loss and damage to our IT Systems, Confidential Information, or business.
Companies involved in government healthcare programs such as Medicaid and Medicare are required to maintain compliance programs to detect and deter fraud, waste and abuse, and are often the subject of fraud, waste and abuse investigations and audits.
Companies involved in public health care programs such as Medicaid and Medicare are required to maintain compliance programs to detect and deter fraud, waste, and abuse, and are often the subject of fraud, waste and abuse investigations and audits. The regulations and contractual requirements applicable to participants in these public-sector programs are complex and subject to change.
In addition, a state could increase hospital or other provider rates without making a commensurate increase in the rates paid to us, could lower our rates without making a commensurate reduction in the rates paid to hospitals or other providers, or could delay the processing of rate changes.
In addition, a state could increase hospital or other provider reimbursement without making a commensurate increase in the reimbursement paid to us, could lower our rates without making a commensurate reduction in the rates paid to hospitals or other providers, could delay the processing of rate changes, or could even make a retroactive rate adjustment or recoupment with regard to a period where we thought the payment amount was final.
The discretion of the state regulators, if any, in approving or disapproving a dividend is not clearly defined. Our health plans generally must provide notice to the applicable state regulator prior to paying a dividend or other distribution to us.
The discretion of the state regulators in approving or disapproving a dividend is not clearly defined. Our health plans generally must provide notice to the applicable state regulator prior to paying a dividend or other distribution to us. Our parent company received $985 million and $997 million in dividends from our regulated health plan subsidiaries during 2025 and 2024, respectively.
Similar laws have gone into effect or have been proposed in many other states and at the federal level as well. If we or one or more of our vendors does not comply with existing or new laws and regulations related to PHI, PII, or non-public personal information, we could be subject to criminal or civil sanctions.
If we or one or more of our vendors does not comply with existing or new laws and regulations related to PHI, Personal Information, or non-public personal information, we could be subject to criminal or civil sanctions.
Premium rates are based on our estimates of utilization of services and unit costs, anticipated member risk acuity and related federal risk adjustment transfer amounts, and non-benefit expenses such as administrative costs, taxes, and fees. In the year ended December 31, 2024, Marketplace program PMPM premium rates ranged from $400 to $1,980.
Premium rates are based on our estimates of utilization of services and unit costs, anticipated member risk acuity and related federal risk adjustment transfer amounts, and non-benefit expenses such as administrative costs, taxes, and fees. Marketplace plan selection by members is highly price sensitive, and the Marketplace markets in general are highly volatile and unpredictable from year to year.
Some providers that render services to our members are not contracted with our health plans. In those cases, there is no pre-established understanding between the provider and our health plan about the amount of compensation that is due to the provider.
In those cases, there is no pre-established understanding between the provider and our health plan about the amount of compensation that is due to the provider. If providers claim they are underpaid for their services, they may litigate or arbitrate their dispute with our health plan.
The complexity of some of our Medicaid contract provisions, imprecise language in those contracts, the desire of state Medicaid agencies in some circumstances to retroactively adjust for the acuity of the medical needs of our members, and state delays in processing rate changes, can create uncertainty around the amount of revenue we should recognize.
The complexity of some of our Medicaid contract provisions, imprecise language in those contracts, the desire of state Medicaid agencies in some circumstances to retroactively adjust the rates that they have paid to us or otherwise recoup premium amounts that we reasonably believed to be final, or state delays in processing rate changes, can create uncertainty around the amount of revenue we should recognize.
This excess is recorded as an impairment loss and adjusted if necessary for the impact of tax-deductible goodwill. The loss recognized may not exceed the total goodwill allocated to the reporting unit. An event could occur that would cause us to revise our estimates and assumptions used in analyzing the value of our goodwill, and intangible assets, net.
This excess is recorded as an impairment loss and adjusted if necessary for the impact of tax-deductible goodwill. The loss recognized may not exceed the total goodwill allocated to the reporting unit.
Impairment indicators may include experienced or expected operating cash-flow deterioration or losses, significant losses of membership, loss of state funding, loss of state contracts, and other factors. Goodwill is impaired if the carrying amount of a reporting unit exceeds its estimated fair value.
Impairment indicators may include declines, or expected declines, in operating performance or cash-flows, significant losses of membership, state funding, or state contracts, adverse regulatory changes, or other declines in market conditions, such as a decline in the company’s market capitalization. Goodwill is impaired if the carrying amount of a reporting unit exceeds its estimated fair value.
Adverse credit market conditions may have a material adverse effect on our liquidity or our ability to obtain credit on acceptable terms. In the past, the securities and credit markets have experienced extreme volatility and disruption. The availability of credit, from virtually all types of lenders, has at times been restricted.
In the past, the securities and credit markets have experienced extreme volatility and disruption. The availability of credit, from virtually all types of lenders, has at times been restricted.
We are subject to risks associated with outsourcing services and functions to third parties. We contract with third party vendors and service providers who provide services to us and our subsidiaries or to whom we delegate selected functions. Some of these third parties have direct access to our systems.
The occurrence of any of the foregoing may result in our failing to achieve the full realization of our embedded earnings. We are subject to risks associated with outsourcing services and functions to third parties. We contract with third party vendors and service providers who provide services to us and our subsidiaries or to whom we delegate selected functions.
Thus, any significant changes in existing health care laws or regulations could materially impact our business, financial condition, cash flows, or results of operations.
Thus, any significant changes in existing health care laws or regulations could materially impact our business, financial condition, cash flows, or results of operations. In particular, the OBBBA enacted several provisions that may impact the number of enrollees in health insurance marketplaces and the size of our member population.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

10 edited+6 added−2 removed13 unchanged
Biggest changeThe cybersecurity policies and procedures are communicated and enforced throughout the Company, as well as with the third-party service providers that have access to the Company's information systems or nonpublic information. Cybersecurity policies and procedures are also subject to periodic review and audits by internal and external parties, such as the internal audit function, external auditors, regulators, or independent assessors.
Biggest changeThe cybersecurity policies and procedures are communicated Molina Healthcare, Inc. 2025 Form 10-K | 36 and enforced throughout the Company, as well as with the third-party service providers that have access to the Company's information systems or nonpublic information.
The Audit Committee meets regularly with the Company’s executive management, including the CISO and the Chief Information Officer, and receives updates on the status and overall effectiveness of the Program, changes to the Program, relevant information technology operations, any changes in material cybersecurity risks and any significant cybersecurity incidents consistent with the IRP.
The Audit Committee meets regularly with the Company’s executive management, including the CISO and the Chief Information Officer, and receives regular updates on the status and overall effectiveness of the Program, changes to the Program, relevant information technology operations, any changes in material cybersecurity risks and any significant cybersecurity incidents consistent with the IRP.
For a discussion of the Company’s cybersecurity-related risks, see Item 1A of this Form 10-K under the heading “Risk Factors—If we or one of our significant vendors sustain a cyber-attack or suffer data privacy or security breaches that disrupt our information systems or operations, or result in the dissemination of sensitive personal or confidential information, we could suffer increased costs, exposure to significant liability, reputational harm, loss of business, and other serious negative consequences.”
For a discussion of the Company’s cybersecurity-related risks, see Item 1A of this Form 10-K under the heading “Risk Factors—If we or one of our significant vendors sustain a cyber-attack or suffer data privacy or security breaches that disrupt our information systems or operations, or result in the dissemination of sensitive personal or confidential information, we could suffer increased costs, exposure to significant liability, reputational harm, loss of business, and other serious negative consequences.” Molina Healthcare, Inc. 2025 Form 10-K | 37
This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use the NIST CSF and Payment Card Industry standards as guides to help us identify, assess, and manage cybersecurity risks relevant to our business.
This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use the NIST CSF framework as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity. The Audit Committee and the Board consider cybersecurity as part of the Company’s business strategy, financial planning, and capital allocation. CYBERSECURITY RISK ASSESSMENT The CISO is responsible for assessing and managing the Company’s material risks from cybersecurity threats.
The Audit Committee and the Board consider cybersecurity as part of the Company’s business strategy, financial planning, and capital allocation. CYBERSECURITY RISK ASSESSMENT Our CISO is primarily responsible for assessing and managing the Company’s material risks from cybersecurity threats.
The Program is aligned with the Company's overall enterprise risk management system and processes and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas. Control procedures are assessed regularly to confirm their effectiveness.
The Program is integrated into the Company's overall enterprise risk management system and processes, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
The Company has established a cybersecurity program (the "Program") that is designed to assess, identify, manage, and mitigate material cybersecurity threats, as well as to respond to and recover from cybersecurity incidents.
The Company has established a cybersecurity risk management program (the "Program") that is designed to protect the confidentiality, integrity, and availability of our critical systems and information, including to assess, identify, manage, and mitigate material cybersecurity threats, as well as to respond to and recover from cybersecurity incidents.
Molina Healthcare, Inc. 2024 Form 10-K | 35 The Program is overseen by the Company’s Board of Directors through its Audit Committee which, pursuant to its charter, assists the Board with oversight of Company privacy, data security, and cybersecurity matters and risks.
The Program and cybersecurity risk is overseen by the Company’s Board of Directors and has delegated to its Audit Committee which, pursuant to its charter, assists the Board with oversight of Company privacy, data security, and cybersecurity matters and risks, including implementation of the Program.
The Company requires employees to undergo cybersecurity-related training, including phishing prevention training, and employees are tested regularly through phishing exercises. GOVERNANCE The CISO is responsible for developing, maintaining, and enforcing the Program's policies and procedures, as well as reporting on the Program's performance and material cybersecurity risks to the Audit Committee.
GOVERNANCE The CISO is primarily responsible for developing, maintaining, and enforcing the Program's policies and procedures, as well as reporting on the Program's performance and material cybersecurity risks to the Audit Committee, and supervising both our internal cybersecurity personnel and our retained external cybersecurity consultants.
The Company undergoes an annual Service Organization Controls (“SOC”) Type 2 attestation report covering the performance of safeguards deployed to protect certain Company systems and applications.
Control procedures are assessed regularly to confirm their effectiveness. The Company undergoes an annual Service Organization Controls (“SOC”) Type 2 attestation report covering the performance of safeguards deployed to protect certain Company systems and applications. The Company has a designated Chief Information Security Officer (the “CISO”), who is primarily responsible for assessing and managing material risks from cybersecurity threats.
Removed
CYBERSECURITY RISK MANAGEMENT The Program is based on the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework (“CSF”), NIST Special Publication 800-53, and the Payment Card Industry standards, as applicable, and designed to comply with applicable laws and regulations, including HIPAA and the New York Department of Financial Services Cybersecurity Regulation, as applicable.
Added
CYBERSECURITY RISK MANAGEMENT We design and assess our Program based on cybersecurity frameworks, such as the National Institute of Standards and Technology Cybersecurity Framework (“NIST CSF”).
Removed
The Company maintains cybersecurity insurance providing coverage for certain costs related to security failures and specified cybersecurity-related incidents that interrupt our network or networks of our vendors, in all cases up to specified limits and subject to certain exclusions. The Company has a designated Chief Information Security Officer (the “CISO”).
Added
Key elements of our Program, include but are not limited to the following: • risk assessments designed to help identify material risks from cybersecurity threats to our critical systems and information; • a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes; • cybersecurity awareness training of our employees, including incident response personnel and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for key service providers based on our assessment of their criticality to our operations and respective risk profile.
Added
Cybersecurity policies and procedures are also subject to periodic review and audits by internal and external parties, such as the internal audit function, external auditors, regulators, or independent assessors. The Company requires employees to undergo cybersecurity-related training, including phishing prevention training, and employees are tested regularly through phishing exercises.
Added
The Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity. The full Board also receives briefings from the Company’s executive management on the Program. Board members receive presentations on cybersecurity topics from our CISO or external experts as part of the Board’s continuing education on topics that impact public companies.
Added
Our CISO takes steps to stay informed about and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in our IT environment.
Added
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. PROPERTIES We own and lease certain real properties to support the business operations of our reportable segments. In 2022, we completed a plan to reduce the real estate footprint used in our business operations to accommodate our move to a permanent remote work environment, a model we have been working under successfully for over four years.
Biggest changeItem 2. PROPERTIES We own and lease certain real properties to support the business operations of our reportable segments. In 2022, we completed a plan to reduce the real estate footprint used in our business operations to accommodate our move to a permanent remote work environment, a model we have been working under successfully since 2020.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(HUM), Laboratory Corporation of America Holdings (LH), Quest Diagnostics Incorporated (DGX), Tenet Healthcare Corporation (THC) and Universal Health Services, Inc. (UHS). The 2024 peer group index consists of Aflac Incorporated (AFL), Becton, Dickinson and Company (BDX), Boston Scientific Corporation (BSX), Centene Corporation (CNC), The Cigna Group (CI), Community Health Systems, Inc. (CYH), DaVita Inc. (DVA), Elevance Health, Inc.
Biggest changeMolina Healthcare, Inc. 2025 Form 10-K | 38 The peer group index consists of Aflac Incorporated (AFL), Becton, Dickinson and Company (BDX), Boston Scientific Corporation (BSX), Centene Corporation (CNC), The Cigna Group (CI), Community Health Systems, Inc. (CYH), DaVita Inc. (DVA), Elevance Health, Inc. (ELV), HCA Healthcare, Inc. (HCA), Humana, Inc. (HUM), Laboratory Corporation of America Holdings (LH), MetLife, Inc.
The comparison assumes $100 was invested on December 31, 2019, in our common stock and in each of the foregoing indices and assumes reinvestment of dividends. The stock performance shown on the graph below represents historical stock price performance and is not necessarily indicative of future stock price performance.
The comparison assumes $100 was invested on December 31, 2020, in our common stock and in each of the foregoing indices and assumes reinvestment of dividends. The stock performance shown on the graph below represents historical stock price performance and is not necessarily indicative of future stock price performance.
For more information regarding restrictions on the ability of our regulated subsidiaries to pay dividends to us, please see the Notes to Consolidated Financial Statements, Note 15, “Commitments and Contingencies—Regulatory Capital Requirements and Dividend Restrictions.” UNREGISTERED SALES OF SECURITIES None. Molina Healthcare, Inc. 2024 Form 10-K | 38
For more information regarding restrictions on the ability of our regulated subsidiaries to pay dividends to us, please see the Notes to Consolidated Financial Statements, Note 15, “Commitments and Contingencies—Regulatory Capital Requirements and Dividend Restrictions.” UNREGISTERED SALES OF SECURITIES None. Molina Healthcare, Inc. 2025 Form 10-K | 39
(2) In October 2024, our board of directors authorized the purchase of up to $1 billion of our common stock. This new program extends through December 31, 2025 and supersedes the stock purchase program previously approved by our board of directors in September 2023.
(2) In April 2025, our board of directors authorized the purchase of up to $1 billion of our common stock. This new program extends through December 31, 2026 and supersedes the stock purchase program previously approved by our board of directors in October 2024.
We currently intend to retain any future earnings to fund our projected business operations. However, we intend to periodically evaluate our cash position to determine whether to pay a cash dividend in the future.
To date we have not paid cash dividends on our common stock. We currently intend to retain any future earnings to fund our projected business operations. However, we intend to periodically evaluate our cash position to determine whether to pay a cash dividend in the future.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES ISSUER PURCHASES OF EQUITY SECURITIES Purchases of common stock made by us, or on our behalf, during the fourth quarter of 2024, including shares withheld by us to satisfy our employees’ income tax obligations, are set forth below: 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 1,600 $ 341.91 — $ 1,000,000,000 November 1 - November 30 275,900 $ 297.25 275,900 $ 918,000,000 December 1 - December 31 1,390,500 $ 300.59 1,390,500 $ 500,000,000 Total 1,668,000 $ 300.08 1,666,400 _______________________ (1) During the fourth quarter of 2024, there were approximately 1,666,400 shares repurchased as part of our publicly announced share repurchase program and we withheld 1,600 shares of common stock to settle employee income tax obligations for releases of awards granted under the Molina Healthcare, Inc. 2019 Equity Incentive Plan.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES ISSUER PURCHASES OF EQUITY SECURITIES Purchases of common stock made by us, or on our behalf, during the fourth quarter of 2025, including shares withheld by us to satisfy our employees’ income tax obligations, are set forth below: 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 1,000 $ 192.79 — $ 500,000,000 November 1 - November 30 — $ — — $ 500,000,000 December 1 - December 31 300 $ 145.00 — $ 500,000,000 Total 1,300 $ 180.57 — _______________________ (1) During the fourth quarter of 2025, we withheld 1,300 shares of common stock to settle employee income tax obligations for releases of awards granted under the Molina Healthcare, Inc. 2019 Equity Incentive Plan.
The following line graph compares the percentage change in the cumulative total return on our common stock against the cumulative total return of the Standard & Poor’s Corporation Composite 500 Index (the “S&P 500”), a peer group index for the five-year period from December 31, 2019 to December 31, 2024 and a prior peer group index used in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
The following line graph compares the percentage change in the cumulative total return on our common stock against the cumulative total return of the Standard & Poor’s Corporation Composite 500 Index (the “S&P 500”), and a peer group index for the five-year period from December 31, 2020 to December 31, 2025.
STOCK TRADING SYMBOL AND DIVIDENDS Our common stock is listed on the New York Stock Exchange under the trading symbol “MOH.” As of February 7, 2025, there were 14 registered holders of record of our common stock, including Cede & Co. To date we have not paid cash dividends on our common stock.
(MET), Prudential Financial, Inc. (PRU), Quest Diagnostics Incorporated (DGX), Tenet Healthcare Corporation (THC) and Universal Health Services, Inc. (UHS). STOCK TRADING SYMBOL AND DIVIDENDS Our common stock is listed on the New York Stock Exchange under the trading symbol “MOH.” As of February 6, 2026, there were 14 registered holders of record of our common stock, including Cede & Co.
Removed
Molina Healthcare, Inc. 2024 Form 10-K | 37 The 2023 peer group index consists of Acadia Healthcare Company, Inc. (ACHC), Centene Corporation (CNC), Cigna Corporation (CI), Community Health Systems, Inc. (CYH), Elevance Health, Inc. (ELV), HCA Healthcare, Inc. (HCA), Humana, Inc.
Removed
(ELV), HCA Healthcare, Inc. (HCA), Humana, Inc. (HUM), Laboratory Corporation of America Holdings (LH), MetLife, Inc. (MET), Prudential Financial, Inc. (PRU), Quest Diagnostics Incorporated (DGX), Tenet Healthcare Corporation (THC) and Universal Health Services, Inc. (UHS).
Removed
The Company’s peer group was updated to include relevant peers across business segment and certain financial metrics, including but not limited to criteria relevant to revenue, market capitalization, EBITDA, organization model, and employee recruitment.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeBusiness—Our Business,” “—Trends and Uncertainties,” “—Legislative and Political Environment,” “—Operations—Medical Management,” and “—Regulation.” SEGMENT FINANCIAL PERFORMANCE The following table summarizes our membership by segment as of the dates indicated: As of December 31, 2024 2023 Medicaid 4,890,000 4,542,000 Medicare 242,000 172,000 Marketplace 403,000 281,000 Total 5,535,000 4,995,000 The tables below summarize premium revenue, medical margin, and MCR by segment for the periods indicated (dollars in millions): Year Ended December 31, 2024 2023 Premium Revenue Medical Margin MCR Premium Revenue Medical Margin MCR Medicaid $ 30,579 $ 2,979 90.3 % $ 26,327 $ 2,973 88.7 % Medicare 5,542 603 89.1 4,179 388 90.7 Marketplace 2,506 617 75.4 2,023 499 75.3 Total $ 38,627 $ 4,199 89.1 % $ 32,529 $ 3,860 88.1 % Molina Healthcare, Inc. 2024 Form 10-K | 42 Medicaid Key factors affecting results for this segment include: • Our growth initiatives, including acquisitions and expansion into new states, drove an increase in member months during the year, despite the impact of redeterminations, and changes in membership mix; • Impact of redetermination, including the loss of approximately 675,000 members, and a moderate impact from the effect of acuity shifts, net of the beneficial impact of risk corridors; and • Continued focus on managing medical costs amid higher-than-expected utilization, particularly in LTSS, pharmacy and behavioral health services.
Biggest changeBusiness—Our Business,” “—Trends and Uncertainties,” “—Operations—Medical Management,” and “—Regulation.” SEGMENT FINANCIAL PERFORMANCE 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 Molina Healthcare, Inc. 2025 Form 10-K | 43 The tables below summarize premium revenue, medical margin, and MCR by segment for the periods indicated (dollars in millions): Year Ended December 31, 2025 2024 Premium Revenue Medical Margin MCR Premium Revenue Medical Margin MCR Medicaid $ 32,240 $ 2,652 91.8 % $ 30,579 $ 2,979 90.3 % Medicare 6,235 475 92.4 5,542 603 89.1 Marketplace 4,487 423 90.6 2,506 617 75.4 Other 90 14 83.6 — — — Total $ 43,052 $ 3,564 91.7 % $ 38,627 $ 4,199 89.1 % Medicaid Key factors affecting results for this segment include: • General market contraction in Medicaid enrollment due to eligibility redeterminations; • The remaining higher-acuity risk population mix, and higher utilization, has contributed to elevated cost trends that began in the second half of 2024 and continued to rise in 2025, and have significantly outpaced rates in 2025; and • Results will continue to be challenged, as state rate updates continue to lag increased cost trends and risk corridor protection is now limited.
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; we have the ability to hold such restricted investments until maturity. All of our unrestricted investments are classified as current assets.
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.
The following table reflects the hypothetical change in our estimate of claims liability as of December 31, 2024 that would result if we change our completion factors for the fourth through the twelfth months preceding December 31, 2024, by the percentages indicated. A reduction in the completion factor results in an increase in medical claims liabilities.
The following table reflects the hypothetical change in our estimate of claims liability as of December 31, 2025 that would result if we change our completion factors for the fourth through the twelfth months preceding December 31, 2025, by the percentages indicated. A reduction in the completion factor results in an increase in medical claims liabilities.
For claims incurred within three months before the financial statement date, actual claims paid are a less reliable measure of our ultimate cost since a large portion of medical claims are not submitted to us until several months after services have been provided.
For claims incurred within three months prior to the financial statement date, actual claims paid are a less reliable measure of our ultimate cost since a large portion of medical claims are not submitted to us until several months after services have been provided.
When available and as permitted by applicable regulations, cash in excess of the capital needs of our regulated health plans is generally paid in the form of dividends to our unregulated parent company to be used for general corporate purposes.
Dividends from Subsidiaries. When available and as permitted by applicable regulations, cash in excess of the capital needs of our regulated health plans is generally paid in the form of dividends to our unregulated parent company to be used for general corporate purposes.
Our MD&A as of and for the year ended December 31, 2022, may be found in our 2023 Annual Report on Form 10-K, which prior disclosure is incorporated by reference herein.
Our MD&A as of and for the year ended December 31, 2023, may be found in our 2024 Annual Report on Form 10-K, which prior disclosure is incorporated by reference herein.
Under fee-for-service claims arrangements with providers, we retain the financial responsibility for medical care provided and incur costs based on actual utilization of hospital and physician services. Such medical care costs include amounts paid by us as well as estimated medical claims and benefits payable for costs that were incurred but not paid as of the reporting date (“IBNP”).
Under fee-for-service claims arrangements with providers, we retain the financial responsibility for medical care provided and incur costs based on actual utilization of hospital and physician services. Such medical care costs include both amounts paid by us and estimated medical claims and benefits payable for costs that were incurred but not yet paid as of the reporting date (“IBNP”).
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (“MD&A”) Management’s discussion and analysis of financial condition and results of operations as of and for the years ended December 31, 2024 and 2023, are presented in the sections that follow.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (“MD&A”) Management’s discussion and analysis of financial condition and results of operations as of and for the years ended December 31, 2025 and 2024, are presented in the sections that follow.
Of those factors, we consider estimated completion factors (measures the cumulative percentage of claims expense that will ultimately be paid for a given month of service based on historical payment patterns) and the assumed healthcare cost trend (the year-over-year change in per-member per-month medical care costs) to be the most critical assumptions.
Of those factors, we consider estimated completion factors (measures the cumulative percentage of claims expense that will ultimately be paid for a given month of service based on historical payment patterns) and the assumed healthcare cost trend (percent change in per-member per-month incurred medical care costs) to be the most critical assumptions.
As of February 11, 2025, $500 million remained available to purchase our common stock under this program through December 31, 2025. See further information in the Notes to Consolidated Financial Statements, Note 13, “Stockholders' Equity.” Acquisitions . We have a disciplined and steady approach to growth.
As of February 10, 2026, $500 million remained available to purchase our common stock under this program through December 31, 2026. See further information in the Notes to Consolidated Financial Statements, Note 13, “Stockholders' Equity.” Acquisitions . We have a disciplined and steady approach to growth.
The following discussion and analysis does not include certain items related to the year ended December 31, 2022, including year-to-year comparisons between the year ended December 31, 2023 and the year ended December 31, 2022.
The following discussion and analysis does not include certain items related to the year ended December 31, 2023, including year-to-year comparisons between the year ended December 31, 2024 and the year ended December 31, 2023.
Molina Healthcare, Inc. 2024 Form 10-K | 41 REPORTABLE SEGMENTS As of December 31, 2024, we served approximately 5.5 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.
Molina Healthcare, Inc. 2025 Form 10-K | 42 REPORTABLE SEGMENTS As of December 31, 2025, we served approximately 5.5 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.
For a comparison of our results of operations for the fiscal years ended December 31, 2023 and December 31, 2022, see “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 13, 2024.
For a comparison of our results of operations for the fiscal years ended December 31, 2024 and December 31, 2023, see “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 11, 2025.
Accordingly, we estimate our IBNP liability for claims incurred during these months based on a blend of estimated completion factors and assumed medical care cost trend.
Accordingly, we estimate our IBNP liability for claims incurred during these months based on a blend of estimated completion factors and projection-based estimates involving assumed medical care cost trend.
Therefore, the underlying medical margin, or the amount earned by the Medicaid, Medicare, and Marketplace segments after medical costs are deducted from premium 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.
Therefore, the underlying margin, or the amount earned by the segments after medical costs 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.
Since 2021, the Molina Healthcare Charitable Foundation has funded over 800 grants to local community organizations in 27 states that address social determinants of health, disaster relief, behavioral health, maternal child health, and other health-related concerns that our afflicting our communities in need. Contractual Obligations.
Since 2021, the Molina Healthcare Charitable Foundation has funded over 900 grants to local community organizations in 29 states that address social determinants of health, disaster relief, behavioral health, maternal child health, and other health-related concerns that are afflicting our communities in need. Contractual Obligations.
This provision is reported as part of “Components of medical care costs related to: Current year” in the table presented in Note 10, “Medical Claims and Benefits Payable.” Adverse conditions are situations that may cause actual claims to be higher than the otherwise estimated value of such claims at the time of the estimate, such as changes in the magnitude or severity of claims, uncertainties related to our entry into new geographical markets or provision of Molina Healthcare, Inc. 2024 Form 10-K | 49 services to new populations, changes in state-controlled fee schedules, and modifications or upgrades to our claims processing systems and practices.
The provision for adverse deviation is reported as part of “Components of medical care costs related to: Current year” in the table presented in Note 10, “Medical Claims and Benefits Payable.” Adverse conditions are situations that may cause actual claims to be higher than the otherwise estimated value of such claims at the time of the estimate, such as changes in the magnitude or severity of claims, uncertainties related to our entry into new geographical markets or provision of services to new populations, changes in state-controlled fee schedules, and modifications or upgrades to our claims processing systems and practices.
The assumed medical care cost trend represents the year-over-year change in per-member per-month medical care costs, which can be affected by many factors including, but not limited to, our ability and practices to manage medical and pharmaceutical costs, changes in level and mix of services utilized, mix of benefits offered, including the impact of co-pays and deductibles, changes in medical practices, changes in member demographics, catastrophes and epidemics , and other relevant factors.
The assumed medical care cost trend can be affected by many factors including, but not limited to, our ability and practices to manage medical and pharmaceutical costs, changes in level and mix of services utilized, mix of benefits offered, including the impact of co-pays and deductibles, changes in medical practices, changes in member demographics, catastrophes and epidemics, and other relevant factors.
IBNP includes the costs of claims incurred as of the balance sheet date which have been reported to us, and our best estimate of the cost of claims incurred but not yet reported to us.
IBNP includes both the costs of claims incurred but not yet paid as of the balance sheet date which has been reported to us, and our best estimate of the cost of claims incurred but not yet reported to us.
The exact timing and amount of any repurchase is determined by management based on market conditions and share price, in addition to other factors, and repurchases generally will be made in accordance with the volume, price, and timing parameters under Rule 10b-18 of the Securities Exchange Act of 1934, as amended.
The exact timing and amount of any share repurchases shall be determined by management, in consultation with the Finance Committee of the Board, based on market conditions and share price, in addition to other factors, and repurchases generally will be made in accordance with the volume, price, and timing parameters under Rule 10b-18 of the Securities Exchange Act of 1934, as amended.
Net unrealized losses on our investments classified as current and available for sale decreased to $75 million at December 31, 2024 compared to $108 million at December 31, 2023. We have determined that the unrealized losses primarily resulted from fluctuating interest rates, rather than a deterioration of the creditworthiness of the issuers.
Net unrealized gains on our investments classified as current and available for sale increased to $20 million at December 31, 2025 compared to net unrealized losses of $75 million at December 31, 2024. We have determined that the unrealized losses primarily resulted from fluctuating interest rates, rather than a deterioration of the creditworthiness of the issuers.
Molina Healthcare, Inc. 2024 Form 10-K | 45 FINANCIAL CONDITION We believe that our cash resources, borrowing capacity available under our Credit Agreement as discussed further below in “Future Sources and Uses of Liquidity—Future Sources,” and internally generated funds will be sufficient to support our operations, regulatory requirements, debt repayment obligations and capital expenditures for at least the next 12 months.
FINANCIAL CONDITION We believe that our cash resources, borrowing capacity available under our New Credit Agreement as discussed further below in “Future Sources and Uses of Liquidity—Future Sources,” and internally generated funds will be sufficient to support our operations, regulatory requirements, debt repayment obligations and capital expenditures for at least the next 12 months.
Cash, cash equivalents and investments at the parent company amounted to $445 million and $742 million as of December 31, 2024, and 2023, respectively.
Cash, cash equivalents and investments at the parent company amounted to $223 million and $445 million as of December 31, 2025, and 2024, respectively.
Because of the statutory restrictions that inhibit the ability of our health plan subsidiaries to transfer net assets to us, the amount of retained earnings readily available to pay dividends to our stockholders is generally limited to cash, cash equivalents and investments held by our unregulated parent. For more information, see the “Liquidity” discussion presented above.
Because of the statutory restrictions that inhibit the ability of our health plan subsidiaries to transfer net assets to us, the amount of retained earnings readily available to pay dividends to our stockholders is generally limited to cash, cash equivalents and investments held by our unregulated parent.
The estimation of the IBNP liability requires a significant degree of judgment in applying actuarial methods, determining the appropriate assumptions and considering numerous factors.
The estimation of the IBNP liability requires considerable judgment in applying actuarial methods, determining the appropriate assumptions, and considering numerous factors.
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.
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.
Molina Healthcare, Inc. 2024 Form 10-K | 46 Debt Ratings Each of our senior notes is rated “BB” by Standard & Poor’s, and “Ba2” by Moody’s Investor Service, Inc. A downgrade in our ratings could adversely affect our borrowing capacity and increase our borrowing costs.
Debt Ratings Each of our senior notes is rated “BB” by Standard & Poor’s, and “Ba2” by Moody’s Investor Service, Inc. A downgrade in our ratings could adversely affect our borrowing capacity and increase our borrowing costs.
The regulated health plan subsidiaries paid dividends to the parent company amounting to $997 million in 2024 and $705 million in 2023.
The regulated health plan subsidiaries paid dividends to the parent company amounting to $985 million in 2025 and $997 million in 2024.
Actual results could differ from these estimates, and some differences could be material. Our most significant accounting estimates, which include a higher degree of judgment and/or complexity, include the following: • Medical costs, claims and benefits payable.
Actual results could differ from these estimates, and some differences could be material. Our most significant accounting estimates, which include a higher degree of judgment and/or complexity, include the following: Molina Healthcare, Inc. 2025 Form 10-K | 49 • Medical costs, claims and benefits payable.
Increase (Decrease) in Estimated Completion Factors Increase (Decrease) in Medical Claims and Benefits Payable (6)% $ 1,139 (4)% 759 (2)% 380 2% (380) 4% (759) 6% (1,139) The following table reflects the hypothetical change in our estimate of claims liability as of December 31, 2024 that would result if we alter our assumed medical care cost trend factors by the percentages indicated.
Increase (Decrease) in Estimated Completion Factors Increase (Decrease) in Medical Claims and Benefits Payable (6)% $ 1,246 (4)% 831 (2)% 415 2% (415) 4% (831) 6% (1,246) The following table reflects the hypothetical change in our estimate of claims liability as of December 31, 2025 that would result if we altered our assumed medical care cost trend factors by the percentages indicated.
In 2024, financing activity included $740 million of net proceeds from the issuance of the $750 million 6.250% Notes due 2033, offset by common stock purchases of $1,000 million and $300 million in gross borrowings and payments under the Credit Facility.
In 2024, financing activity included common stock purchases of $1.0 billion and $300 million in repayment under the Credit Facility, partially offset by $740 million of net proceeds from the issuance of the 6.250% Notes due 2033 and $300 million in borrowings under the Credit Facility.
In 2024 and 2023, cash outflows included $57 million and $60 million, respectively, for common stock withheld to settle employee tax obligations.
In addition, in 2025 and 2024, cash outflows included $37 million and $57 million, respectively, for common stock withheld to settle employee tax obligations.
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.
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.
When subsequent actual claims payments are less than we estimated, we recognize a benefit for favorable prior period development that is reported as part of “Components of medical care costs related to: Prior years” in the table presented in Note 10.
When subsequent actual claims payments are more or less than we estimated, we recognize the variance as prior period development reported as part of “Components of medical care costs related to: Prior years” in the table presented in Note 10.
On a consolidated basis, as of December 31, 2024, our working capital was $4.9 billion compared with $4.4 billion as of December 31, 2023. At December 31, 2024, our cash and investments amounted to $9.3 billion, compared with $9.4 billion of cash and investments at December 31, 2023.
Our working capital on a consolidated basis was $5.1 billion at December 31, 2025, compared with $4.9 billion at December 31, 2024. At December 31, 2025, our cash and investments amounted to $8.6 billion, compared with $9.3 billion of cash and investments at December 31, 2024.
For example, government payors may delay our premium payments, or they may prepay the following month’s premium payment. Net cash provided by operations was $644 million in 2024, compared with $1,662 million in 2023.
For example, government payors may delay our premium payments, or they may prepay the following month’s premium payment. Net cash used in operations was $535 million in 2025, compared with $644 million of cash provided in 2024.
Therefore, we are seldom able to quantify the impact that any single factor has on a change in estimate. Given the variability inherent in the reserving process, we will only be able to identify specific factors if they represent a significant departure from expectations.
Therefore, we are seldom able to measure the precise impact of any single factor’s contribution to a change in estimate. Given the variability inherent in the reserving process, we will only be able to identify specific factors if they represent a significant departure from expectations.
The parent company contributed capital of $490 million and $221 million in 2024 and 2023, respectively, to our regulated health plan subsidiaries to satisfy statutory capital and surplus requirements. The higher contributions in 2024 were mainly attributed to fund our California, Iowa, Nebraska, and Wisconsin health plans.
The parent company contributed capital of $439 million and $490 million in 2025 and 2024, respectively, to our regulated health plan subsidiaries to satisfy statutory capital and surplus requirements. The contributions in 2025 were mainly attributed to fund our Connecticut, California, and Mississippi health plans.
INCOME TAXES Income tax expense amounted to $410 million in 2024, or 25.8% of pretax income, compared with income tax expense of $373 million in 2023, or 25.5% of pretax income.
INCOME TAXES Income tax expense amounted to $117 million in 2025, or 19.8% of pretax income, compared with income tax expense of $410 million in 2024, or 25.8% of pretax income.
We analyze historical claims payment patterns by comparing claim incurred dates to claim payment dates to estimate completion factors. The estimated completion factors are then applied to claims paid through the financial statement date to estimate the ultimate claims cost for a given month’s incurred claim activity.
The estimated completion factors are applied to claims paid through the financial statement date to estimate the ultimate claims cost for a given month’s incurred claim activity.
For more information on our regulatory capital requirements and dividend restrictions, refer to Notes to Consolidated Financial Statements, Note 15, “Commitments and Contingencies—Regulatory Capital Requirements and Dividend Restrictions,” and Note 17, “Condensed Financial Information of Registrant—Note C - Dividends and Capital Contributions.” Credit Agreement Borrowing Capacity.
For more information on our regulatory capital requirements and dividend restrictions, refer to “Regulatory Capital and Dividend Restrictions” discussion presented above, Notes Molina Healthcare, Inc. 2025 Form 10-K | 48 to Consolidated Financial Statements, Note 15, “Commitments and Contingencies—Regulatory Capital Requirements and Dividend Restrictions,” and Note 17, “Condensed Financial Information of Registrant—Note C - Dividends and Capital Contributions.” Credit Agreement Borrowing Capacity.
Business,” for further description of our segments. 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 Medicaid, Medicare, and Marketplace segments are premium revenue, medical margin and medical care ratio (“MCR”).
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.
Accordingly, future refinancing may occur at a higher rate than those we have achieved historically. This would increase our cost of capital in the future or may cause us to pursue alternative financing sources, should the need arise. We are not a party to any off-balance sheet financing arrangements.
Accordingly, future refinancing may occur at rates comparable to our most recent issuances, which would increase our cost of capital in the future or may cause us to pursue alternative financing sources, should the need arise. We are not a party to any off-balance sheet financing arrangements.
Molina Healthcare, Inc. 2024 Form 10-K | 48 The following table illustrates consolidated medical care costs by type for the periods indicated: Year Ended December 31, 2024 2023 Amount % of Total Amount % of Total (In millions) Fee-for-service $ 25,386 73.7 % $ 21,415 74.7 % Pharmacy 4,331 12.6 3,987 13.9 Capitation 3,048 8.9 1,651 5.8 Other 1,663 4.8 1,616 5.6 Total $ 34,428 100.0 % $ 28,669 100.0 % Medical claims and benefits payable consist mainly of fee-for-service IBNP, unpaid pharmacy claims, capitation costs, other medical costs, including amounts payable to providers pursuant to risk-sharing or other incentive arrangements, and amounts payable to providers on behalf of certain state agencies for certain state assessments in which we assume no financial risk.
The following table illustrates consolidated medical care costs by type for the periods indicated: Year Ended December 31, 2025 2024 Amount % of Total Amount % of Total (In millions) Fee-for-service $ 29,170 73.9 % $ 25,386 73.7 % Pharmacy 5,341 13.5 4,331 12.6 Capitation 3,141 8.0 3,048 8.9 Other 1,836 4.6 1,663 4.8 Total $ 39,488 100.0 % $ 34,428 100.0 % Medical claims and benefits payable consist mainly of fee-for-service IBNP, unpaid pharmacy claims, capitation costs, other medical costs, including amounts payable to providers based on risk-sharing or incentive arrangements, and amounts payable to providers on behalf of certain state agencies for certain state assessments where we do not assume financial risk.
Cash Flow Activities Our cash flows are summarized as follows: Year Ended December 31, 2024 2023 Change (In millions) Net cash provided by operating activities $ 644 $ 1,662 $ (1,018) Net cash used in investing activities (464) (744) 280 Net cash used in financing activities (347) (58) (289) Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents $ (167) $ 860 $ (1,027) Operating Activities We typically receive capitation payments monthly, in advance of payments for medical claims; however, government payors may adjust their payment schedules, positively or negatively impacting our reported cash flows from operating activities in any given period.
Cash Flow Activities Our cash flows are summarized as follows: Year Ended December 31, 2025 2024 Change (In millions) Net cash (used in) provided by operating activities $ (535) $ 644 $ (1,179) Net cash provided by (used in) investing activities 312 (464) 776 Net cash used in financing activities (170) (347) 177 Net decrease in cash, cash equivalents, and restricted cash and cash equivalents $ (393) $ (167) $ (226) Molina Healthcare, Inc. 2025 Form 10-K | 46 Operating Activities We typically receive capitation payments monthly, in advance of payments for medical claims; however, government payors may adjust their payment schedules, positively or negatively impacting our reported cash flows from operating activities in any given period.
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.
See Molina Healthcare, Inc. 2025 Form 10-K | 45 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.
The difference in the effective tax rate is primarily due to an increase in state and local income taxes and differences in discrete tax benefits recognized in the respective periods, net of a decrease in nondeductible expenses.
The difference in the effective tax rate is due to an increase in tax benefits related to transferable federal tax credits, decreases in nondeductible expenses and state and local income taxes, and differences in discrete tax items recognized in the respective periods.
Molina Healthcare, Inc. 2024 Form 10-K | 39 FINANCIAL RESULTS SUMMARY Year Ended December 31, 2024 2023 (In millions, except per-share amounts) Premium revenue $ 38,627 $ 32,529 Less: medical care costs 34,428 28,669 Medical margin 4,199 3,860 MCR (1) 89.1 % 88.1 % Other revenues: Premium tax revenue 1,486 1,069 Investment income 452 394 Other revenue 85 80 General and administrative expenses 2,743 2,462 G&A ratio (2) 6.7 % 7.2 % Premium tax expenses 1,486 1,069 Depreciation and amortization 186 171 Other 100 128 Operating income 1,707 1,573 Interest expense 118 109 Income before income tax expense 1,589 1,464 Income tax expense 410 373 Net income $ 1,179 $ 1,091 Net income per diluted share $ 20.42 $ 18.77 Diluted weighted average shares outstanding 57.7 58.1 Other Key Statistics: Ending Membership 5.5 5.0 Effective income tax rate 25.8 % 25.5 % After-tax margin (3) 2.9 % 3.2 % __________________ (1) MCR represents medical care costs as a percentage of premium revenue.
Molina Healthcare, Inc. 2025 Form 10-K | 40 FINANCIAL RESULTS SUMMARY Year Ended December 31, 2025 2024 (In millions, except per-share amounts) Premium revenue $ 43,052 $ 38,627 Less: medical care costs 39,488 34,428 Medical margin 3,564 4,199 MCR (1) 91.7 % 89.1 % Other revenues: Premium tax revenue 1,863 1,486 Investment income 420 452 Other revenue 91 85 General and administrative expenses 3,009 2,743 G&A ratio (2) 6.6 % 6.7 % Premium tax expenses 1,863 1,486 Depreciation and amortization 195 186 Other 90 100 Operating income 781 1,707 Interest expense 192 118 Income before income tax expense 589 1,589 Income tax expense 117 410 Net income $ 472 $ 1,179 Net income per diluted share $ 8.92 $ 20.42 Diluted weighted average shares outstanding 52.9 57.7 Other Key Statistics: Ending Membership 5.5 5.5 Effective income tax rate 19.8 % 25.8 % Pre-tax margin (3) 1.3 % 3.9 % __________________ (1) MCR represents medical care costs as a percentage of premium revenue.
Other relevant factors also include, but are not limited to, healthcare service utilization trends, claim inventory levels, changes in membership, product mix, seasonality, benefit changes or changes in fee schedules, provider contract changes, prior authorizations and the incidence of catastrophic or pandemic cases.
Other relevant factors also include, but are not limited to, utilization and unit cost trends, claim inventory levels, changes in membership, Molina Healthcare, Inc. 2025 Form 10-K | 50 product mix, seasonality, benefit changes, changes in fee schedules, provider contract changes, prior authorizations, prevalence of high-cost catastrophic cases, and the incidence of influenza-like illnesses.
In addition, on November 18, 2024 (the “Settlement Date”), we completed a private offering of $750 million aggregate principal amount of our 6.250% Senior Notes due 2033 (the “6.250% Notes”) pursuant to an indenture, dated as of the Settlement Date with U.S. Bank Trust Company and National Association, as trustee.
On November 20, 2025 (the “Settlement Date”), we completed a private offering of $850 million aggregate principal amount of our 6.500% Senior Notes due 2031 (the “6.500% Notes”) pursuant to an indenture, dated as of the Settlement Date with U.S. Bank Trust Company, National Association, as trustee. The 6.500% Notes bear interest at a rate of 6.500% per year.
Therefore, in many situations, the claim amounts ultimately settled will be less than the estimate that satisfies the actuarial standards of practice.
Absent significant adverse conditions, the claim amounts ultimately settled will be less than the estimate that satisfies the actuarial standards of practice.
We served approximately 5.5 million members as of December 31, 2024, located across 21 states. 2024 HIGHLIGHTS Highlights of our full-year 2024 results included the following: • Net income of $1,179 million, or $20.42 per diluted share, compared to $1,091 million, or $18.77 per diluted share in 2023; • Membership of 5.5 million at December 31, 2024, mainly reflecting the impact of our growth initiatives, which partially offset the impact of Medicaid redeterminations; • Total revenue of $40.7 billion, which increased 19% compared to 2023; • Premium revenue of $38.6 billion, which increased 19% compared to 2023; • Consolidated medical care ratio (“MCR”) of 89.1%, compared to 88.1% in 2023; • General and administrative expense ratio (“G&A ratio”) of 6.7%, which decreased from 7.2% in 2023; • Investment income of $452 million, which increased 5% compared to 2023; and • After-tax margin of 2.9%, compared to 3.2% in 2023.
We served approximately 5.5 million members as of December 31, 2025, located across 21 states. 2025 HIGHLIGHTS Highlights of our full-year 2025 results included the following: • Net income of $472 million, or $8.92 per diluted share, compared to $1,179 million, or $20.42 per diluted share in 2024; • Membership of 5.5 million at December 31, 2025, down slightly compared to the prior year, despite the impact of our growth initiatives, due to the impact of Medicaid redeterminations; • Total revenue of $45.4 billion, which increased 12% compared to 2024; • Premium revenue of $43.1 billion, which increased 11% compared to 2024; • Consolidated medical care ratio (“MCR”) of 91.7%, compared to 89.1% in 2024, reflecting a challenging medical cost trend environment in all our segments; • General and administrative expense ratio (“G&A ratio”) of 6.6%, which decreased from 6.7% in 2024; and • Pre-tax margin of 1.3%, compared to 3.9% in 2024.
Financial Covenants Our Credit Agreement contains customary non-financial and financial covenants, including a net leverage ratio and an interest coverage ratio. Such ratios are computed as defined by the terms of the Credit Agreement.
Financial Covenants Our New Credit Agreement contains customary non-financial and financial covenants, including a minimum Interest Coverage Ratio and a maximum Consolidated Total Debt to Capital Ratio. Such ratios are computed as defined by the terms of the New Credit Agreement discussed below.
As a result, we do not expect to be able to fully quantify the impact of individual factors on changes in estimates. RECENTLY ISSUED ACCOUNTING STANDARDS Refer to the Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies,” for a discussion of recent accounting pronouncements that affect us. Molina Healthcare, Inc. 2024 Form 10-K | 50
Thus, we do not anticipate being able to completely quantify how individual factors affect changes in estimates. RECENTLY ISSUED ACCOUNTING STANDARDS Refer to the Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies,” for a discussion of recent accounting pronouncements that affect us.
We have the ability, and have committed to provide, additional capital to each of our health plans as necessary to ensure compliance with minimum statutory capital requirements. The Molina Healthcare Charitable Foundation. In 2020, we announced our formation of The Molina Healthcare Charitable Foundation (the “Foundation”), an independent not-for-profit charitable foundation.
We have the ability, and have committed to provide, additional capital to each of our health plans as necessary to ensure compliance with minimum statutory capital requirements, including new state contract wins and growth in existing states. The Molina Healthcare Charitable Foundation.
We currently have 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. See "Item 1.
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.
Financing Activities Net cash used in financing activities was $347 million in 2024, compared with $58 million in 2023, a decrease in year-over-year cash flow of $289 million.
Financing Activities Net cash used in financing activities was $170 million in 2025, compared with $347 million in 2024, an increase in year-over-year cash flow of $177 million.
Molina Healthcare, Inc. 2024 Form 10-K | 44 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.
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.
The aggregate capital and surplus of our wholly owned subsidiaries was in excess of these minimum capital requirements as of both dates. Under applicable regulatory requirements, the amount of dividends that may be paid by our wholly owned subsidiaries without prior approval by regulatory authorities as of December 31, 2024, was approximately $400 million in the aggregate.
Molina Healthcare, Inc. 2025 Form 10-K | 47 Under applicable regulatory requirements, the amount of dividends that may be paid by our wholly owned subsidiaries without prior approval by regulatory authorities as of December 31, 2025, was approximately $170 million in the aggregate.
This new program extends through December 31, 2025 and supersedes the stock purchase program previously approved by our board of directors in September 2023.
Capital Structure In April 2025, our board of directors authorized the purchase of up to $1 billion of our common stock. This new program supersedes the stock purchase program previously approved by our board of directors in October 2024 and extends through December 31, 2026.
For claims incurred more than three months before the financial statement date, we mainly use estimated completion factors to estimate the ultimate cost of those claims. Completion factors measure the cumulative percentage of claims expense that will ultimately be paid for a given month of service based on historical claims payment patterns.
For claims incurred more than three months before the financial statement date, we mainly use estimated completion factors to estimate the ultimate cost of those claims. We analyze historical claims payment patterns by analyzing claims by incurred date and payment date to estimate completion factors.
This new program supersedes the stock purchase program previously approved by our board of directors in September 2023 and extends through December 31, 2025. As debt held by the parent company comes due, we typically engage in a new private offering of debt to retire and replace the prior issuance.
As debt held by the parent company comes due, we typically engage in a new private offering of debt to retire and replace the prior issuance.
Medicaid premium revenue increased $4.3 billion, or 16% in 2024, when compared with 2023.
Medicaid premium revenue increased $1.7 billion, or 5%, in 2025, when compared with 2024.
As of December 31, 2024, we had available borrowing capacity of $1.25 billion under the Credit Agreement. See further discussion in the Notes to Consolidated Financial Statements, Note 11, “Debt.” Future Uses Common Stock Purchases. In October 2024, our board of directors authorized the purchase of up to $1 billion of our common stock.
See further discussion in the Notes to Consolidated Financial Statements, Note 11, “Debt.” Future Uses Common Stock Purchases. In April 2025, our board of directors authorized the purchase of up to an additional $1 billion of our common stock. This new program extends through December 31, 2026.
Other The Other segment includes service revenues and costs associated with the long-term services and supports consultative services we provide in Wisconsin, and also includes certain corporate amounts not allocated to the Medicaid, Medicare, or Marketplace segments. Such amounts were immaterial to our consolidated results of operations for 2024 and 2023.
Other The Other segment includes service revenues and costs associated with the 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.
The Credit Agreement also provides for a $15 million swingline sub-facility and a $100 million letter of credit sub-facility, as well as incremental term loans available to finance certain acquisitions up to $800 million, plus an unlimited amount of such term loans as long as we maintain a minimum consolidated net leverage ratio.
The New Credit Agreement also provides for a $15 million swingline sub-facility and a $100 million letter of credit sub-facility, as well as incremental term loans available to finance certain acquisitions up to $800 million. As of December 31, 2025, we had available borrowing capacity of $1.25 billion under the New Credit Agreement.
Regulatory Capital and Dividend Restrictions Each of our regulated, wholly owned subsidiaries must maintain a minimum amount of statutory capital determined by statute or regulations. Such statutes, regulations and capital requirements also restrict the timing, payment and amount of dividends and other distributions, loans or advances that may be paid to us as the sole stockholder.
Such statutes, regulations and capital requirements also restrict the timing, payment and amount of dividends and other distributions, loans or advances that may be paid to us as the sole stockholder. To the extent our subsidiaries must comply with these regulations, they may not have the financial flexibility to transfer funds to us.
Actuarial standards of practice generally require a level of confidence such that our overall best estimate of the IBNP liability has a greater probability of being adequate versus being insufficient, where the liability is sufficient to account for moderately adverse conditions.
Actuarial standards of practice require a provision for adverse deviation in the IBNP liability estimates such that our IBNP liability has a greater probability of being adequate versus being insufficient.
Premium revenue is our primary source of liquidity. Thus, any decline in the receipt of premium revenue, and our profitability, could have a negative impact on our liquidity. Dividends from Subsidiaries.
FUTURE SOURCES AND USES OF LIQUIDITY Future Sources Our regulated subsidiaries generate significant cash flows from premium revenue, which is generally received a short time before related healthcare services are paid. Premium revenue is our primary source of liquidity. Thus, any decline in the receipt of premium revenue, and our profitability, could have a negative impact on our liquidity.
The decrease in 2024 was primarily due to funding of our Bright Health Medicare acquisition for $441 million and the purchase of approximately 3.1 million shares of our stock for $1.0 billion in the third and fourth quarter of 2024, partially offset by the $740 million net proceeds from issuing the new 6.250% Notes, net inflows from dividends received from and capital contributions made to our regulated health plan subsidiaries, and the timing of corporate payments.
The decrease in 2025 was primarily due to the purchase of approximately 1.7 million shares of our stock for $500 million in the first quarter of 2025, the purchase of approximately 2.8 million shares of our stock for $500 million in the third quarter of 2025, capital contributions to regulated health plan subsidiaries, and funding the ConnectiCare transaction for $350 million, partially offset by dividends received from regulated health plan subsidiaries, the $98 million net proceeds from the issuance of notes in November 2025 and repaying outstanding term loans, and the timing of corporate payments.
In the case of material growth or decline of membership, replenishment can exceed or fall short of the favorable development, assuming all other factors remain unchanged. Because of the significant degree of judgment involved in estimation of our IBNP liability, there is considerable variability and uncertainty inherent in such estimates.
Because of the significant degree of judgment involved in estimation of our IBNP liability, there is considerable variability and uncertainty inherent in such estimates.
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.
Such amounts were immaterial to our consolidated results of operations for 2025 and 2024. 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.
To the extent our subsidiaries must comply with these regulations, they may not have the financial flexibility to transfer funds to us. Based upon current statutes and regulations, the minimum capital and surplus requirement for these subsidiaries was estimated to be approximately $2.6 billion at December 31, 2024 and $2.3 billion at December 31, 2023.
Based upon current statutes and regulations, the minimum capital and surplus requirement for these subsidiaries was estimated to be approximately $3.1 billion at December 31, 2025 and $2.6 billion at December 31, 2024. The aggregate capital and surplus of our wholly owned subsidiaries was in excess of these minimum capital requirements as of both dates.
For several years we saw a continued decline in interest rates, which benefited our overall cost of capital during that time. However, interest rates have increased since we issued our 3.875% Notes due 2032 in 2021, as we experienced with our most recent issuance of our 6.250% Notes in 2024.
However, interest rates have increased since we issued our 3.875% Notes due 2032 in 2021, as we experienced with our most recent issuances of our Senior Notes in 2024 and 2025.
Capitation payments represent monthly contractual fees paid to providers, who are responsible for providing medical care to members, which could include medical or ancillary costs like dental, vision and other supplemental health benefits. Such capitation costs are fixed in advance of the periods covered and are not subject to significant accounting estimates.
Pharmacy benefits represent payments for members' prescription drug costs, net of rebates from drug manufacturers, with rebates estimated using historical and current prescription drug utilization and contractual provisions. Capitation payments represent monthly contractual fees paid to providers responsible for providing medical care to members, which could include medical or ancillary costs like dental, vision and other supplemental health benefits.
The Medicare MCR for the year ended December 31, 2024 is above our long-term target range.
The Medicare MCR for 2025 is higher than we expected and is above our long-term target range.
For further information on our acquisitions, refer to the Notes to Consolidated Financial Statements, Note 4, “Business Combinations.” Connecticut Acquisition—Marketplace and Medicare. Effective February 1, 2025, we closed on our acquisition of 100% of the issued and outstanding capital stock of ConnectiCare Holding Company, Inc. The purchase price for the transaction was $350 million. Regulatory Capital Requirements and Dividend Restrictions.
For further information on our acquisitions, refer to the Notes to Consolidated Financial Statements, Note 4, “Business Combinations.” Regulatory Capital Requirements and Dividend Restrictions.
Other revenue mainly includes service revenue associated with long-term services and supports consultative services we provide in Wisconsin. GENERAL AND ADMINISTRATIVE (“G&A”) EXPENSES The G&A ratio was 6.7% in 2024, compared to 7.2% in 2023.
The decrease was mainly attributable to a decline in prevailing interest rates and investment yields. OTHER REVENUE Other revenue amounted to $91 million in 2025, compared with $85 million in 2024. Other revenue mainly includes service revenue associated with long-term services and supports consultative services we provide in Wisconsin.
We maintain liquidity at two levels: 1) the regulated health plan subsidiaries; and 2) the parent company.
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.
(Decrease) Increase in Trended Per Member Per Month Cost Estimates (Decrease) Increase in Medical Claims and Benefits Payable (6)% $ (394) (4)% (262) (2)% (131) 2% 131 4% 262 6% 394 There are many related factors working in conjunction with one another that determine the accuracy of our estimates, some of which are qualitative in nature rather than quantitative.
Molina Healthcare, Inc. 2025 Form 10-K | 51 (Decrease) Increase in Trended Per Member Per Month Cost Estimates (Decrease) Increase in Medical Claims and Benefits Payable (6)% $ (420) (4)% (280) (2)% (140) 2% 140 4% 280 6% 420 Numerous interconnected factors influence the accuracy of our estimates, with some being qualitative rather than quantitative.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAssuming a hypothetical and immediate 1% increase in market interest rates at December 31, 2024, the fair value of our fixed income investments would decrease by approximately $112 million. Declines in interest rates over time will reduce our investment income.
Biggest changeAssuming a hypothetical and immediate 1% increase in market interest rates at December 31, 2025, the fair value of our fixed income investments would decrease by approximately $113 million. Declines in interest rates over time will reduce our investment income.
For further information on fair value measurements and our investment portfolio, please refer to the Notes to Consolidated Financial Statements, Note 5, “Fair Value Measurements,” and Note 6, “Investments.” Borrowings under the Credit Agreement bear interest based, at our election, on a base rate or other defined rate, plus, in each case, the applicable margin.
For further information on fair value measurements and our investment portfolio, please refer to the Notes to Consolidated Financial Statements, Note 5, “Fair Value Measurements,” and Note 6, “Investments.” Borrowings under the New Credit Agreement bear interest based, at our election, on a base rate or other defined rate, plus, in each case, the applicable margin.
Our notes bear interest at specified rates, each payable semiannually in arrears. For further information, see Notes to Consolidated Financial Statements, Note 11, “Debt.” Molina Healthcare, Inc. 2024 Form 10-K | 51
Our notes bear interest at specified rates, each payable semiannually in arrears. For further information, see Notes to Consolidated Financial Statements, Note 11, “Debt.” Molina Healthcare, Inc. 2025 Form 10-K | 52

Other MOH 10-K year-over-year comparisons