Molina Healthcare's third-quarter earnings were approximately three times higher than at the same point last year, further fueling the Medicaid managed-care company's highly profitable year.
Molina's profit in the third quarter jumped to $46.3 million, almost tripling the $16.1 million from the same quarter of 2014. Revenue climbed more than 45% to $3.6 billion. A vast majority of Molina's members are on Medicaid. The Affordable Care Act's Medicaid expansion and state managed-care contracts have boosted the company's business.
A larger revenue base wasn't the only stimulus for the bigger bottom line. Molina also held medical costs in check. The company's medical-loss ratio in the quarter was 89.3%, compared with 90.6% in 2014.
Nearly 3.5 million people had a Molina health plan as of Sept. 30. More than half a million of those resulted from Medicaid expansion, the company said. Molina also has 226,000 enrollees on the ACA's marketplaces, but lost 35,000 members from the second quarter of this year. Other publicly traded insurers such as Aetna and Anthem have also recorded attrition in their exchange populations.
Molina is selling 2016 plans in the same number of states as 2015, and executives were confident their plans would make money, which has not been the case for other insurance companies.
“We priced our products at a point we thought they would be competitive and yet remain profitable, and I would also want to make sure that people understand it's not just the premium,” Molina Chief Financial Officer John Molina said on an earnings call. “It's also things like co-pays, deductibles, etc. that really roll into what a competitive financial package is.”