Revenue and profit at Molina Healthcare grew rapidly in 2014 as the managed-care insurer continues to show the business potential of Medicaid with the boost from the 2010 healthcare law.
Molina turned a $33.8 million profit in the fourth quarter compared with a $9.1 million loss in the same quarter of 2013. Profit per share was 69 cents in the quarter, beating Wall Street's consensus estimate by eight cents.
On the year, Molina, headquartered in Long Beach, Calif., posted profit that was 18% higher than in 2013, totaling $62.2 million.
Molina's top-line growth fueled the productive year. The insurer added 692,000 members to its rolls, giving it 2.6 million as of Dec. 31. Of that total, 385,000 people were added through the expansion of Medicaid under the Patient Protection and Affordable Care Act.
Consequently, the surge of new members led to almost $9.7 billion in revenue in 2014, a 47% boost year over year.
Still, the company's profits were somewhat constrained by high medical-cost trends. Molina closed the year with a medical-loss ratio of 89.5% compared with 87.1% in 2013. The MLR shows how much of members' premium dollars went toward medical care and procedures versus administrative costs and profits.
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