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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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13-4204626
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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200 Oceangate, Suite 100
Long Beach, California
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90802
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section13(a) of the Exchange Act.
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¨
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ITEM NUMBER
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Page
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PART I - Financial Information
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1.
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||
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2.
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||
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3.
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||
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4.
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||
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Part II
- Other Information
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|
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|
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1.
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||
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1A.
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||
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2.
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||
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3.
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Defaults Upon Senior Securities
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Not Applicable.
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4.
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Mine Safety Disclosures
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Not Applicable.
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5.
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Other Information
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Not Applicable.
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6.
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||
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Three Months Ended September 30,
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Nine Months Ended September 30,
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||||||||||||
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2018
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2017
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2018
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2017
|
||||||||
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(In millions, except per-share data)
(Unaudited)
|
||||||||||||||
Revenue:
|
|
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|
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|
||||||||
Premium revenue
|
$
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4,337
|
|
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$
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4,777
|
|
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$
|
13,174
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|
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$
|
14,165
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Service revenue
|
130
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|
|
130
|
|
|
391
|
|
|
390
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|
||||
Premium tax revenue
|
110
|
|
|
106
|
|
|
320
|
|
|
331
|
|
||||
Health insurer fees reimbursed
|
83
|
|
|
—
|
|
|
248
|
|
|
—
|
|
||||
Investment income and other revenue
|
37
|
|
|
18
|
|
|
93
|
|
|
48
|
|
||||
Total revenue
|
4,697
|
|
|
5,031
|
|
|
14,226
|
|
|
14,934
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Medical care costs
|
3,790
|
|
|
4,220
|
|
|
11,362
|
|
|
12,822
|
|
||||
Cost of service revenue
|
111
|
|
|
123
|
|
|
349
|
|
|
369
|
|
||||
General and administrative expenses
|
311
|
|
|
383
|
|
|
998
|
|
|
1,227
|
|
||||
Premium tax expenses
|
110
|
|
|
106
|
|
|
320
|
|
|
331
|
|
||||
Health insurer fees
|
87
|
|
|
—
|
|
|
261
|
|
|
—
|
|
||||
Depreciation and amortization
|
25
|
|
|
33
|
|
|
76
|
|
|
109
|
|
||||
Restructuring and separation costs
|
5
|
|
|
118
|
|
|
38
|
|
|
161
|
|
||||
Impairment losses
|
—
|
|
|
129
|
|
|
—
|
|
|
201
|
|
||||
Total operating expenses
|
4,439
|
|
|
5,112
|
|
|
13,404
|
|
|
15,220
|
|
||||
Gain on sale of subsidiary
|
37
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|
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—
|
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|
37
|
|
|
—
|
|
||||
Operating income (loss)
|
295
|
|
|
(81
|
)
|
|
859
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|
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(286
|
)
|
||||
Other expenses, net:
|
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|
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|
||||||||
Interest expense
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26
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32
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91
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|
|
85
|
|
||||
Other expenses (income), net
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10
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—
|
|
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25
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|
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(75
|
)
|
||||
Total other expenses, net
|
36
|
|
|
32
|
|
|
116
|
|
|
10
|
|
||||
Income (loss) before income tax expense (benefit)
|
259
|
|
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(113
|
)
|
|
743
|
|
|
(296
|
)
|
||||
Income tax expense (benefit)
|
62
|
|
|
(16
|
)
|
|
237
|
|
|
(46
|
)
|
||||
Net income (loss)
|
$
|
197
|
|
|
$
|
(97
|
)
|
|
$
|
506
|
|
|
$
|
(250
|
)
|
|
|
|
|
|
|
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|
||||||||
Net income (loss) per share:
|
|
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||||||||
Basic
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$
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3.22
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$
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(1.70
|
)
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$
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8.32
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$
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(4.44
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)
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Diluted
|
$
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2.90
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$
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(1.70
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)
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$
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7.60
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$
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(4.44
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
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2018
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2017
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2018
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2017
|
||||||||
|
(In millions)
(Unaudited)
|
||||||||||||||
Net income (loss)
|
$
|
197
|
|
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$
|
(97
|
)
|
|
$
|
506
|
|
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$
|
(250
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Unrealized investment gain (loss)
|
1
|
|
|
1
|
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(5
|
)
|
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2
|
|
||||
Less: effect of income taxes
|
—
|
|
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1
|
|
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(1
|
)
|
|
1
|
|
||||
Other comprehensive income (loss), net of tax
|
1
|
|
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—
|
|
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(4
|
)
|
|
1
|
|
||||
Comprehensive income (loss)
|
$
|
198
|
|
|
$
|
(97
|
)
|
|
$
|
502
|
|
|
$
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(249
|
)
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
|
(In millions,
except per-share data)
|
||||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,814
|
|
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$
|
3,186
|
|
Investments
|
1,812
|
|
|
2,524
|
|
||
Restricted investments
|
—
|
|
|
169
|
|
||
Receivables
|
1,346
|
|
|
871
|
|
||
Prepaid expenses and other current assets
|
486
|
|
|
239
|
|
||
Derivative asset
|
843
|
|
|
522
|
|
||
Total current assets
|
7,301
|
|
|
7,511
|
|
||
Property, equipment, and capitalized software, net
|
264
|
|
|
342
|
|
||
Goodwill and intangible assets, net
|
195
|
|
|
255
|
|
||
Restricted investments
|
118
|
|
|
119
|
|
||
Deferred income taxes
|
143
|
|
|
103
|
|
||
Other assets
|
30
|
|
|
141
|
|
||
|
$
|
8,051
|
|
|
$
|
8,471
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Medical claims and benefits payable
|
$
|
2,042
|
|
|
$
|
2,192
|
|
Amounts due government agencies
|
1,030
|
|
|
1,542
|
|
||
Accounts payable and accrued liabilities
|
824
|
|
|
366
|
|
||
Deferred revenue
|
178
|
|
|
282
|
|
||
Current portion of long-term debt
|
296
|
|
|
653
|
|
||
Derivative liability
|
843
|
|
|
522
|
|
||
Total current liabilities
|
5,213
|
|
|
5,557
|
|
||
Long-term debt
|
1,019
|
|
|
1,318
|
|
||
Lease financing obligations
|
198
|
|
|
198
|
|
||
Other long-term liabilities
|
60
|
|
|
61
|
|
||
Total liabilities
|
6,490
|
|
|
7,134
|
|
||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Common stock, $0.001 par value, 150 shares authorized; outstanding: 62 shares at September 30, 2018 and 60 shares at December 31, 2017
|
—
|
|
|
—
|
|
||
Preferred stock, $0.001 par value; 20 shares authorized, no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
760
|
|
|
1,044
|
|
||
Accumulated other comprehensive loss
|
(10
|
)
|
|
(5
|
)
|
||
Retained earnings
|
811
|
|
|
298
|
|
||
Total stockholders’ equity
|
1,561
|
|
|
1,337
|
|
||
|
$
|
8,051
|
|
|
$
|
8,471
|
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Retained
Earnings
|
|
Total
|
|||||||||||||
|
Outstanding
|
|
Amount
|
|
|
|
|
|||||||||||||||
|
(In millions)
|
|||||||||||||||||||||
|
(Unaudited)
|
|||||||||||||||||||||
Balance at January 1, 2018
|
60
|
|
|
$
|
—
|
|
|
$
|
1,044
|
|
|
$
|
(5
|
)
|
|
$
|
298
|
|
|
$
|
1,337
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
107
|
|
|
107
|
|
|||||
Adoption of Topic 606
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
|||||
Adoption of ASU 2018-02
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|||||
Exchange of 1.625% Notes
|
2
|
|
|
—
|
|
|
108
|
|
|
—
|
|
|
—
|
|
|
108
|
|
|||||
Other comprehensive loss, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|||||
Share-based compensation
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Balance at March 31, 2018
|
62
|
|
|
—
|
|
|
1,153
|
|
|
(12
|
)
|
|
412
|
|
|
1,553
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
202
|
|
|
202
|
|
|||||
Partial termination of 1.125% Warrants
|
—
|
|
|
—
|
|
|
(113
|
)
|
|
—
|
|
|
—
|
|
|
(113
|
)
|
|||||
Other comprehensive income, net
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Share-based compensation
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|||||
Balance at June 30, 2018
|
62
|
|
|
—
|
|
|
1,055
|
|
|
(11
|
)
|
|
614
|
|
|
1,658
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
197
|
|
|
197
|
|
|||||
Partial termination of 1.125% Warrants
|
—
|
|
|
—
|
|
|
(306
|
)
|
|
—
|
|
|
—
|
|
|
(306
|
)
|
|||||
Conversion of 1.625% Notes
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||
Other comprehensive income, net
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Share-based compensation
|
—
|
|
|
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
Balance at September 30, 2018
|
62
|
|
|
$
|
—
|
|
|
$
|
760
|
|
|
$
|
(10
|
)
|
|
$
|
811
|
|
|
$
|
1,561
|
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Retained
Earnings
|
|
Total
|
|||||||||||||
|
Outstanding
|
|
Amount
|
|
|
|
|
|||||||||||||||
|
(In millions)
|
|||||||||||||||||||||
|
(Unaudited)
|
|||||||||||||||||||||
Balance at January 1, 2017
|
57
|
|
|
$
|
—
|
|
|
$
|
841
|
|
|
$
|
(2
|
)
|
|
$
|
810
|
|
|
$
|
1,649
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
77
|
|
|
77
|
|
|||||
Other comprehensive income, net
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Balance at March 31, 2017
|
57
|
|
|
—
|
|
|
841
|
|
|
(1
|
)
|
|
887
|
|
|
1,727
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(230
|
)
|
|
(230
|
)
|
|||||
Share-based compensation
|
—
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|||||
Balance at June 30, 2017
|
57
|
|
|
—
|
|
|
865
|
|
|
(1
|
)
|
|
657
|
|
|
1,521
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(97
|
)
|
|
(97
|
)
|
|||||
Share-based compensation
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|||||
Balance at September 30, 2017
|
57
|
|
|
$
|
—
|
|
|
$
|
870
|
|
|
$
|
(1
|
)
|
|
$
|
560
|
|
|
$
|
1,429
|
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
(Unaudited) |
||||||
Operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
506
|
|
|
$
|
(250
|
)
|
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
104
|
|
|
139
|
|
||
Deferred income taxes
|
(32
|
)
|
|
(68
|
)
|
||
Share-based compensation
|
20
|
|
|
38
|
|
||
Non-cash restructuring costs
|
17
|
|
|
49
|
|
||
Amortization of convertible senior notes and lease financing obligations
|
18
|
|
|
24
|
|
||
Gain on sale of subsidiary
|
(37
|
)
|
|
—
|
|
||
Loss on debt extinguishment
|
25
|
|
|
—
|
|
||
Impairment losses
|
—
|
|
|
201
|
|
||
Other, net
|
6
|
|
|
13
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Receivables
|
(507
|
)
|
|
(28
|
)
|
||
Prepaid expenses and other current assets
|
(117
|
)
|
|
(53
|
)
|
||
Medical claims and benefits payable
|
(144
|
)
|
|
549
|
|
||
Amounts due government agencies
|
(511
|
)
|
|
122
|
|
||
Accounts payable and accrued liabilities
|
398
|
|
|
90
|
|
||
Deferred revenue
|
(55
|
)
|
|
153
|
|
||
Income taxes
|
118
|
|
|
(22
|
)
|
||
Net cash (used in) provided by operating activities
|
(191
|
)
|
|
957
|
|
||
Investing activities:
|
|
|
|
||||
Purchases of investments
|
(1,202
|
)
|
|
(1,894
|
)
|
||
Proceeds from sales and maturities of investments
|
2,070
|
|
|
1,536
|
|
||
Purchases of property, equipment and capitalized software
|
(24
|
)
|
|
(85
|
)
|
||
Other, net
|
(23
|
)
|
|
(33
|
)
|
||
Net cash provided by (used in) investing activities
|
821
|
|
|
(476
|
)
|
||
Financing activities:
|
|
|
|
||||
Repayment of credit facility
|
(300
|
)
|
|
—
|
|
||
Repayment of principal amount of 1.125% Notes
|
(236
|
)
|
|
—
|
|
||
Cash paid for partial settlement of 1.125% Conversion Option
|
(477
|
)
|
|
—
|
|
||
Cash received for partial termination of 1.125% Call Option
|
477
|
|
|
—
|
|
||
Cash paid for partial termination of 1.125% Warrants
|
(419
|
)
|
|
—
|
|
||
Repayment of principal amount of 1.625% Notes
|
(64
|
)
|
|
—
|
|
||
Proceeds from senior notes offerings, net of issuance costs
|
—
|
|
|
325
|
|
||
Proceeds from borrowings under credit facility
|
—
|
|
|
300
|
|
||
Other, net
|
7
|
|
|
7
|
|
||
Net cash (used in) provided by financing activities
|
(1,012
|
)
|
|
632
|
|
||
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents
|
(382
|
)
|
|
1,113
|
|
||
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period
|
3,290
|
|
|
2,912
|
|
||
Cash, cash equivalents, and restricted cash and cash equivalents at end of period
|
$
|
2,908
|
|
|
$
|
4,025
|
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
(Unaudited) |
||||||
Supplemental cash flow information:
|
|
|
|
||||
|
|
|
|
||||
Schedule of non-cash investing and financing activities:
|
|
|
|
||||
Common stock used for share-based compensation
|
$
|
(6
|
)
|
|
$
|
(21
|
)
|
|
|
|
|
||||
Details of sale of subsidiary:
|
|
|
|
||||
Decrease in carrying amount of assets
|
$
|
(243
|
)
|
|
$
|
—
|
|
Decrease in carrying amount of liabilities
|
59
|
|
|
—
|
|
||
Transaction costs
|
(12
|
)
|
|
—
|
|
||
Receivable from buyer - recorded in prepaid expenses and other current assets
|
233
|
|
|
—
|
|
||
Gain on sale of subsidiary
|
$
|
37
|
|
|
$
|
—
|
|
|
|
|
|
||||
Details of change in fair value of derivatives, net:
|
|
|
|
||||
Gain on 1.125% Call Option
|
$
|
321
|
|
|
$
|
158
|
|
Loss on 1.125% Conversion Option
|
(321
|
)
|
|
(158
|
)
|
||
Change in fair value of derivatives, net
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||||
1.625% Notes exchange transaction:
|
|
|
|
||||
Common stock issued in exchange for 1.625% Notes
|
$
|
131
|
|
|
$
|
—
|
|
Component of 1.625% Notes allocated to additional paid-in capital, net of income taxes
|
(23
|
)
|
|
—
|
|
||
Net increase to additional paid-in capital
|
$
|
108
|
|
|
$
|
—
|
|
•
|
Income taxes refundable with “Prepaid expenses and other current assets;”
|
•
|
Income taxes payable with “Accounts payable and accrued liabilities;”
|
•
|
Goodwill, and intangible assets, net to a single line; and
|
•
|
Deferred contract costs with “Other assets.”
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
Cash and cash equivalents
|
$
|
2,814
|
|
|
$
|
3,934
|
|
Restricted cash and cash equivalents
|
94
|
|
|
91
|
|
||
Total cash, cash equivalents, and restricted cash and cash equivalents presented in the statements of cash flows
|
$
|
2,908
|
|
|
$
|
4,025
|
|
1)
|
Contractual Provisions That May Adjust or Limit Revenue or Profit:
|
•
|
Medical Cost Floors (Minimums), and Medical Cost Corridors:
Pursuant to certain contract provisions, a portion of our premium revenue may be returned if certain minimum amounts are not spent on defined medical care costs. In the aggregate, we recorded a liability under the terms of such contract provisions of
$198 million
and
$135 million
at
September 30, 2018
and
December 31, 2017
, respectively. Approximately
$144 million
and
$96 million
of this liability accrued at
September 30, 2018
and
December 31, 2017
, respectively, relates to our participation in Medicaid Expansion programs. Refer to Note
12
, “
Commitments and Contingencies
,” for further information regarding the California Medicaid Expansion program.
|
•
|
Retroactive Premium Adjustments:
State Medicaid programs periodically adjust premium rates on a retroactive basis. In these cases, we must adjust our premium revenue in the period in which we learn of the adjustment, rather than in the months of service to which the retroactive adjustment applies.
|
•
|
Minimum MLR:
The Affordable Care Act (ACA) has established a minimum annual medical loss ratio (Minimum MLR) of 85% for Medicare. The medical loss ratio represents medical costs as a percentage of premium revenue. Federal regulations define what constitutes medical costs and premium revenue. If the Minimum MLR is not met, we may be required to pay rebates to the federal government. We recognize estimated rebates under the Minimum MLR as an adjustment to premium revenue in our consolidated statements of operations. The payable for the Medicare Minimum MLR was not significant at September 30, 2018 and December 31, 2017.
|
•
|
Risk adjustment:
Under this program, our health plans’ composite risk scores are compared with the overall average risk score for the relevant state and market pool. Generally, our health plans will make a risk adjustment payment into the pool if their composite risk scores are below the average risk score, and will receive a risk adjustment payment from the pool if their composite risk scores are above the average risk score. We estimate our ultimate premium based on insurance policy year-to-date experience, and recognize estimated premiums relating to the risk adjustment program as an adjustment to premium
|
•
|
Minimum MLR:
The ACA has established a Minimum MLR of
80%
for the Marketplace. If the Minimum MLR is not met, we may be required to pay rebates to our Marketplace policyholders. The Marketplace risk adjustment program is taken into consideration when computing the Minimum MLR. We recognize estimated rebates under the Minimum MLR as an adjustment to premium revenue in our consolidated statements of operations. The payable for the Marketplace Minimum MLR was not significant at September 30, 2018 and December 31, 2017.
|
2)
|
Quality Incentives:
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(Dollars in millions)
|
||||||||||||||
Maximum available quality incentive premium - current period
|
$
|
48
|
|
|
$
|
36
|
|
|
$
|
135
|
|
|
$
|
113
|
|
Quality incentive premium revenue recognized in current period:
|
|
|
|
|
|
|
|
||||||||
Earned current period
|
$
|
39
|
|
|
$
|
24
|
|
|
$
|
97
|
|
|
$
|
72
|
|
Earned prior periods
|
9
|
|
|
3
|
|
|
32
|
|
|
9
|
|
||||
Total
|
$
|
48
|
|
|
$
|
27
|
|
|
$
|
129
|
|
|
81
|
|
|
|
|
|
|
|
|
|
|
||||||||
Quality incentive premium revenue recognized as a percentage of total premium revenue
|
1.1
|
%
|
|
0.6
|
%
|
|
1.0
|
%
|
|
0.6
|
%
|
•
|
ASU 2017-03,
Transition and Open Effective Date Information;
|
•
|
ASU 2018-01,
Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842;
|
•
|
ASU 2018-10,
Codification Improvements to Topic 842, Leases; and
|
•
|
ASU 2018-11,
Leases (Topic 842): Targeted Improvements.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In millions, except net income per share)
|
||||||||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
197
|
|
|
$
|
(97
|
)
|
|
$
|
506
|
|
|
$
|
(250
|
)
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Shares outstanding at the beginning of the period
|
61.3
|
|
|
56.5
|
|
|
59.3
|
|
|
55.8
|
|
||||
Weighted-average number of shares issued:
|
|
|
|
|
|
|
|
||||||||
Exchange of 1.625% Notes
(1)
|
—
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.4
|
|
||||
Denominator for basic net income per share
|
61.3
|
|
|
56.5
|
|
|
60.8
|
|
|
56.2
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
1.125% Warrants
(1)
|
5.6
|
|
|
—
|
|
|
5.0
|
|
|
—
|
|
||||
1.625% Notes
(1)
|
0.6
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
||||
Stock-based compensation
|
0.4
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
||||
Denominator for diluted net income per share
|
67.9
|
|
|
56.5
|
|
|
66.6
|
|
|
56.2
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share:
(2)
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
3.22
|
|
|
$
|
(1.70
|
)
|
|
$
|
8.32
|
|
|
$
|
(4.44
|
)
|
Diluted
|
$
|
2.90
|
|
|
$
|
(1.70
|
)
|
|
$
|
7.60
|
|
|
$
|
(4.44
|
)
|
|
|
|
|
|
|
|
|
||||||||
Potentially dilutive common shares excluded from calculations:
|
|
|
|
|
|
|
|
||||||||
1.125% Warrants
(1)
|
—
|
|
|
2.3
|
|
|
—
|
|
|
1.3
|
|
||||
1.625% Notes
(1)
|
—
|
|
|
0.6
|
|
|
—
|
|
|
0.3
|
|
||||
Stock-based compensation
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.3
|
|
(1)
|
For more information and definitions regarding the
1.625%
Notes, refer to Note
7
, “
Debt
.” For more information and definitions regarding the
1.125%
Warrants, refer to Note
9
, “
Stockholders' Equity
.” The dilutive effect of all potentially dilutive common shares is calculated using the treasury stock method. Certain potentially dilutive common shares issuable are not included in the computation of diluted net income (loss) per share because to do so would be anti-dilutive.
|
(2)
|
Source data for calculations in thousands.
|
|
Total
|
|
Quoted Market Prices (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||
|
(In millions)
|
||||||||||||||
Corporate debt securities
|
$
|
1,191
|
|
|
$
|
—
|
|
|
$
|
1,191
|
|
|
$
|
—
|
|
U.S. treasury notes
|
221
|
|
|
221
|
|
|
—
|
|
|
—
|
|
||||
Government-sponsored enterprise securities (GSEs)
|
170
|
|
|
170
|
|
|
—
|
|
|
—
|
|
||||
Municipal securities
|
119
|
|
|
—
|
|
|
119
|
|
|
—
|
|
||||
Asset-backed securities
|
92
|
|
|
—
|
|
|
92
|
|
|
—
|
|
||||
Certificate of deposit
|
15
|
|
|
—
|
|
|
15
|
|
|
—
|
|
||||
Other
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Subtotal - current investments
|
1,812
|
|
|
391
|
|
|
1,421
|
|
|
—
|
|
||||
1.125% Call Option derivative asset
|
843
|
|
|
—
|
|
|
—
|
|
|
843
|
|
||||
Total assets
|
$
|
2,655
|
|
|
$
|
391
|
|
|
$
|
1,421
|
|
|
$
|
843
|
|
|
|
|
|
|
|
|
|
||||||||
1.125% Conversion Option derivative liability
|
$
|
843
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
843
|
|
Total liabilities
|
$
|
843
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
843
|
|
|
Total
|
|
Quoted Market Prices (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
||||||||
|
(In millions)
|
||||||||||||||
Corporate debt securities
|
$
|
1,588
|
|
|
$
|
—
|
|
|
$
|
1,588
|
|
|
$
|
—
|
|
U.S. treasury notes
|
388
|
|
|
388
|
|
|
—
|
|
|
—
|
|
||||
GSEs
|
253
|
|
|
253
|
|
|
—
|
|
|
—
|
|
||||
Municipal securities
|
141
|
|
|
—
|
|
|
141
|
|
|
—
|
|
||||
Asset-backed securities
|
117
|
|
|
—
|
|
|
117
|
|
|
—
|
|
||||
Certificates of deposit
|
37
|
|
|
—
|
|
|
37
|
|
|
—
|
|
||||
Subtotal - current investments
|
2,524
|
|
|
641
|
|
|
1,883
|
|
|
—
|
|
||||
Corporate debt securities
|
101
|
|
|
—
|
|
|
101
|
|
|
—
|
|
||||
U.S. treasury notes
|
68
|
|
|
68
|
|
|
—
|
|
|
—
|
|
||||
Subtotal - current restricted investments
|
169
|
|
|
68
|
|
|
101
|
|
|
—
|
|
||||
1.125% Call Option derivative asset
|
522
|
|
|
—
|
|
|
—
|
|
|
522
|
|
||||
Total assets
|
$
|
3,215
|
|
|
$
|
709
|
|
|
$
|
1,984
|
|
|
$
|
522
|
|
|
|
|
|
|
|
|
|
||||||||
1.125% Conversion Option derivative liability
|
$
|
522
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
522
|
|
Total liabilities
|
$
|
522
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
522
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||
|
Carrying
Amount
|
|
Fair Value
|
|
Carrying
Amount
|
|
Fair Value
|
||||||||
|
(In millions)
|
||||||||||||||
5.375% Notes
|
$
|
693
|
|
|
$
|
711
|
|
|
$
|
692
|
|
|
$
|
730
|
|
1.125% Notes
(1)
|
295
|
|
|
1,142
|
|
|
496
|
|
|
1,052
|
|
||||
4.875% Notes
|
326
|
|
|
325
|
|
|
325
|
|
|
329
|
|
||||
1.625% Notes
(2)
|
—
|
|
|
—
|
|
|
157
|
|
|
220
|
|
||||
Credit Facility
(2)
|
—
|
|
|
—
|
|
|
300
|
|
|
300
|
|
||||
|
$
|
1,314
|
|
|
$
|
2,178
|
|
|
$
|
1,970
|
|
|
$
|
2,631
|
|
(1)
|
The fair value of the 1.125% Conversion Option (the embedded cash conversion option), which is included in the fair value amounts presented above, amounted to
$843 million
and
$522 million
as of
September 30, 2018
, and
December 31, 2017
, respectively. See further discussion at Note
7
, “
Debt
,” and Note
8
, “
Derivatives
.”
|
(2)
|
For more information on debt repayments in the nine months ended September 30, 2018, refer to Note
7
, “
Debt
.”
|
|
September 30, 2018
|
||||||||||||||
|
Amortized
|
|
Gross
Unrealized
|
|
Estimated
Fair
|
||||||||||
|
Cost
|
|
Gains
|
|
Losses
|
|
Value
|
||||||||
|
(In millions)
|
||||||||||||||
Corporate debt securities
|
$
|
1,197
|
|
|
$
|
1
|
|
|
$
|
7
|
|
|
$
|
1,191
|
|
U.S. treasury notes
|
222
|
|
|
—
|
|
|
1
|
|
|
221
|
|
||||
GSEs
|
172
|
|
|
—
|
|
|
2
|
|
|
170
|
|
||||
Municipal securities
|
121
|
|
|
—
|
|
|
2
|
|
|
119
|
|
||||
Asset backed securities
|
93
|
|
|
—
|
|
|
1
|
|
|
92
|
|
||||
Certificates of deposit
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
||||
Other
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
|
$
|
1,824
|
|
|
$
|
1
|
|
|
$
|
13
|
|
|
$
|
1,812
|
|
|
December 31, 2017
|
||||||||||||||
|
Amortized
|
|
Gross
Unrealized
|
|
Estimated
Fair
|
||||||||||
|
Cost
|
|
Gains
|
|
Losses
|
|
Value
|
||||||||
|
(In millions)
|
||||||||||||||
Corporate debt securities
|
$
|
1,591
|
|
|
$
|
1
|
|
|
$
|
4
|
|
|
$
|
1,588
|
|
U.S. treasury notes
|
389
|
|
|
—
|
|
|
1
|
|
|
388
|
|
||||
GSEs
|
255
|
|
|
—
|
|
|
2
|
|
|
253
|
|
||||
Municipal securities
|
142
|
|
|
—
|
|
|
1
|
|
|
141
|
|
||||
Asset-backed securities
|
117
|
|
|
—
|
|
|
—
|
|
|
117
|
|
||||
Certificates of deposit
|
37
|
|
|
—
|
|
|
—
|
|
|
37
|
|
||||
Subtotal - current investments
|
2,531
|
|
|
1
|
|
|
8
|
|
|
2,524
|
|
||||
Corporate debt securities
|
101
|
|
|
—
|
|
|
—
|
|
|
101
|
|
||||
U.S. treasury notes
|
68
|
|
|
—
|
|
|
—
|
|
|
68
|
|
||||
Subtotal - current restricted investments
|
169
|
|
|
—
|
|
|
—
|
|
|
169
|
|
||||
|
$
|
2,700
|
|
|
$
|
1
|
|
|
$
|
8
|
|
|
$
|
2,693
|
|
|
Amortized Cost
|
|
Estimated
Fair Value
|
||||
|
(In millions)
|
||||||
Due in one year or less
|
$
|
1,025
|
|
|
$
|
1,023
|
|
Due after one year through five years
|
799
|
|
|
789
|
|
||
|
$
|
1,824
|
|
|
$
|
1,812
|
|
|
In a Continuous Loss Position
for Less than 12 Months
|
|
In a Continuous Loss Position
for 12 Months or More
|
||||||||||||||||||
|
Estimated
Fair
Value
|
|
Unrealized
Losses
|
|
Total
Number of
Positions
|
|
Estimated
Fair
Value
|
|
Unrealized
Losses
|
|
Total
Number of
Positions
|
||||||||||
|
(Dollars in millions)
|
||||||||||||||||||||
Corporate debt securities
|
$
|
727
|
|
|
$
|
4
|
|
|
460
|
|
|
$
|
186
|
|
|
$
|
3
|
|
|
127
|
|
U.S. Treasury notes
|
—
|
|
|
—
|
|
|
—
|
|
|
94
|
|
|
1
|
|
|
31
|
|
||||
GSEs
|
—
|
|
|
—
|
|
|
—
|
|
|
127
|
|
|
2
|
|
|
68
|
|
||||
Municipal securities
|
63
|
|
|
1
|
|
|
63
|
|
|
55
|
|
|
1
|
|
|
57
|
|
||||
Asset backed securities
|
72
|
|
|
1
|
|
|
41
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
862
|
|
|
$
|
6
|
|
|
564
|
|
|
$
|
462
|
|
|
$
|
7
|
|
|
283
|
|
|
In a Continuous Loss Position
for Less than 12 Months
|
|
In a Continuous Loss Position
for 12 Months or More
|
||||||||||||||||||
|
Estimated
Fair
Value
|
|
Unrealized
Losses
|
|
Total
Number of
Positions
|
|
Estimated
Fair
Value
|
|
Unrealized
Losses
|
|
Total
Number of
Positions
|
||||||||||
|
(Dollars in millions)
|
||||||||||||||||||||
Corporate debt securities
|
$
|
1,297
|
|
|
$
|
3
|
|
|
561
|
|
|
$
|
94
|
|
|
$
|
1
|
|
|
69
|
|
U.S. Treasury Notes
|
470
|
|
|
1
|
|
|
89
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
GSEs
|
173
|
|
|
1
|
|
|
69
|
|
|
95
|
|
|
1
|
|
|
47
|
|
||||
Municipal securities
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|
1
|
|
|
48
|
|
||||
|
$
|
1,940
|
|
|
$
|
5
|
|
|
719
|
|
|
$
|
227
|
|
|
$
|
3
|
|
|
164
|
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||
|
(In millions)
|
||||||
Due in one year or less
|
$
|
111
|
|
|
$
|
111
|
|
Due after one year through five years
|
7
|
|
|
7
|
|
||
|
$
|
118
|
|
|
$
|
118
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
|
(In millions)
|
||||||
Fee-for-service claims incurred but not paid (IBNP)
|
$
|
1,609
|
|
|
$
|
1,717
|
|
Pharmacy payable
|
121
|
|
|
112
|
|
||
Capitation payable
|
48
|
|
|
67
|
|
||
Other
|
264
|
|
|
296
|
|
||
|
$
|
2,042
|
|
|
$
|
2,192
|
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
Medical claims and benefits payable, beginning balance
|
$
|
2,192
|
|
|
$
|
1,929
|
|
Components of medical care costs related to:
|
|
|
|
||||
Current period
|
11,589
|
|
|
12,813
|
|
||
Prior periods
|
(227
|
)
|
|
9
|
|
||
Total medical care costs
|
11,362
|
|
|
12,822
|
|
||
|
|
|
|
||||
Change in non-risk provider payables
|
60
|
|
|
172
|
|
||
|
|
|
|
||||
Payments for medical care costs related to:
|
|
|
|
||||
Current period
|
9,866
|
|
|
10,944
|
|
||
Prior periods
|
1,706
|
|
|
1,501
|
|
||
Total paid
|
11,572
|
|
|
12,445
|
|
||
Medical claims and benefits payable, ending balance
|
$
|
2,042
|
|
|
$
|
2,478
|
|
•
|
Across all of our health plans, the inventory of unpaid claims increased significantly during the first half of 2017, then decreased in the last half of 2017 and into 2018. Changes in claims inventories impact the timing between date of service and the date of claim payment, increasing the volatility of our liability estimates.
|
•
|
In June 2018, our Puerto Rico health plan implemented state prescribed claim billing requirements to ensure more accurate claims submissions. The billing requirements were more stringent and caused a significant number of claim denials. Although we expect providers to ultimately submit updated claims with the required information, the impact of the new billing requirements creates more uncertainty in our liability estimates.
|
•
|
At our Florida health plan, a new clinical service system was implemented in the first quarter of 2018. This system impacted the reporting of inpatient authorizations used in our development of claims liabilities, which makes our liability estimates subject to more than the usual amount of uncertainty.
|
•
|
We recently implemented a new process for increased quality review of claims payments in 11 of our health plans. While we do not anticipate this new process will impact the percentage of claims paid within the timely turnaround requirements, we believe it will have a minor impact on the timing of some paid claims. For this reason, our liability estimates in these 11 health plans are subject to more than the usual amount of uncertainty.
|
•
|
The impact of the provision for adverse claims deviation and the accrued cost of settling claims as discussed above. Because we re-establish the provision for adverse claims deviation and the accrued cost of settling claims on a consistent basis every quarter, the impact of this item to medical care costs in the nine months ended September 30, 2018, results was minimal.
|
•
|
Across all of our health plans, the inventory of unpaid claims increased significantly during the first half of 2017, then decreased in the last half of 2017. In hindsight, the impact of the changes in claims processing timing reduced our liabilities more than we had anticipated.
|
•
|
December 2017 data from The Centers for Disease Control and Prevention indicated widespread influenza activity in several states in which we operate health plans. The additional liabilities established in consideration of increased claims related to a more severe influenza season turned out to be higher than our actual experience.
|
•
|
In establishing our liability at December 31, 2017, we anticipated an increase in the utilization of medical services by Marketplace members concerned about the future of their healthcare coverage as a result of uncertainties related to high premium increases and issuer exits. This induced demand did not materialize to the degree we expected.
|
|
Total
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
(In millions)
|
||||||||||||||||||||||||||
5.375% Notes
|
$
|
700
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
700
|
|
|
$
|
—
|
|
|
$
|
—
|
|
4.875% Notes
|
330
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
330
|
|
|||||||
1.125% Notes
|
314
|
|
|
—
|
|
|
314
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
$
|
1,344
|
|
|
$
|
—
|
|
|
$
|
314
|
|
|
$
|
—
|
|
|
$
|
700
|
|
|
$
|
—
|
|
|
$
|
330
|
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
|
(In millions)
|
||||||
Current portion of long-term debt:
|
|
|
|
||||
1.125% Notes, net of unamortized discount of $18 at September 30, 2018, and $51 at December 31, 2017
|
$
|
296
|
|
|
$
|
499
|
|
1.625% Notes, net of unamortized discount of $3 at December 31, 2017
|
—
|
|
|
157
|
|
||
Lease financing obligations
|
1
|
|
|
1
|
|
||
Debt issuance costs
|
(1
|
)
|
|
(4
|
)
|
||
|
296
|
|
|
653
|
|
||
Non-current portion of long-term debt:
|
|
|
|
||||
5.375% Notes
|
700
|
|
|
700
|
|
||
4.875% Notes
|
330
|
|
|
330
|
|
||
Credit Facility
|
—
|
|
|
300
|
|
||
Debt issuance costs
|
(11
|
)
|
|
(12
|
)
|
||
|
1,019
|
|
|
1,318
|
|
||
Lease financing obligations
|
198
|
|
|
198
|
|
||
|
$
|
1,513
|
|
|
$
|
2,169
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In millions)
|
||||||||||||||
Contractual interest at coupon rate
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
5
|
|
|
$
|
9
|
|
Amortization of the discount
|
5
|
|
|
8
|
|
|
18
|
|
|
24
|
|
||||
|
$
|
6
|
|
|
$
|
11
|
|
|
$
|
23
|
|
|
$
|
33
|
|
|
Balance Sheet Location
|
|
September 30,
2018 |
|
December 31,
2017 |
||||
|
|
|
(In millions)
|
||||||
Derivative asset:
|
|
|
|
|
|
||||
1.125% Call Option
|
Current assets: Derivative asset
|
|
$
|
843
|
|
|
$
|
522
|
|
Derivative liability:
|
|
|
|
|
|
||||
1.125% Conversion Option
|
Current liabilities: Derivative liability
|
|
$
|
843
|
|
|
$
|
522
|
|
|
Restricted Stock Awards
|
|
Performance Stock Awards
|
|
Performance Stock Units
|
|
Total
|
|
Weighted
Average
Grant Date
Fair Value
|
||||||
Unvested balance, December 31, 2017
|
401,804
|
|
|
84,762
|
|
|
91,828
|
|
|
578,394
|
|
|
$
|
58.35
|
|
Granted
|
353,618
|
|
|
—
|
|
|
212,926
|
|
|
566,544
|
|
|
73.85
|
|
|
Vested
|
(188,954
|
)
|
|
(32,929
|
)
|
|
—
|
|
|
(221,883
|
)
|
|
57.87
|
|
|
Forfeited
|
(152,243
|
)
|
|
(48,701
|
)
|
|
(104,527
|
)
|
|
(305,471
|
)
|
|
63.67
|
|
|
Unvested balance, September 30, 2018
|
414,225
|
|
|
3,132
|
|
|
200,227
|
|
|
617,584
|
|
|
70.11
|
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(In millions)
|
||||||
Granted:
|
|
|
|
||||
Restricted stock awards
|
$
|
26
|
|
|
$
|
19
|
|
Performance stock units
|
16
|
|
|
16
|
|
||
|
$
|
42
|
|
|
$
|
35
|
|
Vested:
|
|
|
|
||||
Restricted stock awards
|
$
|
14
|
|
|
$
|
21
|
|
Performance stock awards
|
3
|
|
|
15
|
|
||
Performance stock units
|
—
|
|
|
9
|
|
||
|
$
|
17
|
|
|
$
|
45
|
|
|
Three and Nine Months Ended September 30, 2018
|
||||||||||||||
|
One-Time Termination Benefits
|
|
Other Restructuring Costs
|
|
Total
|
||||||||||
|
|
Consulting Fees
|
|
Contract Termination Costs
|
|
||||||||||
|
(In millions)
|
||||||||||||||
Other
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
One-Time Termination Benefits
|
|
Other Restructuring Costs
|
|
Total
|
||||||
|
|
||||||||||
Accrued as of December 31, 2017
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Charges
|
2
|
|
|
1
|
|
|
3
|
|
|||
Cash payments
|
—
|
|
|
—
|
|
|
—
|
|
|||
Accrued as of September 30, 2018
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
3
|
|
•
|
Streamlining of our organizational structure to eliminate redundant layers of management, consolidate regional support services, and other staff reductions to improve efficiency and the speed and quality of decision making;
|
•
|
Re-design of core operating processes such as provider payment, utilization management, quality monitoring and improvement, and information technology, to achieve more effective and cost-efficient outcomes;
|
•
|
Remediation of high-cost provider contracts and enhancement of high quality, cost-effective networks;
|
•
|
Restructuring, including selective exits, of direct delivery operations; and
|
•
|
Partnering with the lowest-cost, most effective vendors.
|
|
Three Months Ended September 30, 2018
|
||||||||||||||||||
|
One-Time Termination Benefits
|
|
Other Restructuring Costs
|
|
Total
|
||||||||||||||
|
|
Write-offs of Current and Long-lived Assets
|
|
Consulting Fees
|
|
Contract Termination Costs
|
|
||||||||||||
|
(In millions)
|
||||||||||||||||||
Health Plans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||
|
One-Time Termination Benefits
|
|
Other Restructuring Costs
|
|
Total
|
||||||||||||||
|
|
Write-offs of Current and Long-lived Assets
|
|
Consulting Fees
|
|
Contract Termination Costs
|
|
||||||||||||
|
(In millions)
|
||||||||||||||||||
Health Plans
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
9
|
|
Other
|
5
|
|
|
20
|
|
|
1
|
|
|
—
|
|
|
26
|
|
|||||
|
$
|
5
|
|
|
$
|
19
|
|
|
$
|
1
|
|
|
$
|
10
|
|
|
$
|
35
|
|
|
Three Months Ended September 30, 2017
|
||||||||||||||||||||||
|
Separation Costs - Former Executives
|
|
One-Time Termination Benefits
|
|
Other Restructuring Costs
|
|
Total
|
||||||||||||||||
|
|
|
Write-offs of Current and Long-lived Assets
|
|
Consulting Fees
|
|
Contract Termination Costs
|
|
|||||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Health Plans
|
$
|
—
|
|
|
$
|
27
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33
|
|
Molina Medicaid Solutions
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
||||||
Other
|
—
|
|
|
23
|
|
|
35
|
|
|
16
|
|
|
3
|
|
|
77
|
|
||||||
|
$
|
—
|
|
|
$
|
50
|
|
|
$
|
49
|
|
|
$
|
16
|
|
|
$
|
3
|
|
|
$
|
118
|
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||||||||||
|
Separation Costs - Former Executives
|
|
One-Time Termination Benefits
|
|
Other Restructuring Costs
|
|
Total
|
||||||||||||||||
|
|
|
Write-offs of Current and Long-lived Assets
|
|
Consulting Fees
|
|
Contract Termination Costs
|
|
|||||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Health Plans
|
$
|
—
|
|
|
$
|
27
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
33
|
|
Molina Medicaid Solutions
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
||||||
Other
|
35
|
|
|
23
|
|
|
35
|
|
|
24
|
|
|
3
|
|
|
120
|
|
||||||
|
$
|
35
|
|
|
$
|
50
|
|
|
$
|
49
|
|
|
$
|
24
|
|
|
$
|
3
|
|
|
$
|
161
|
|
|
Separation Costs - Former Executives
|
|
One-Time Termination Benefits
|
|
Other Restructuring Costs
|
|
Total
|
||||||||||||||||
|
|
|
Write-offs of Current and Long-lived Assets
|
|
Consulting Fees
|
|
Contract Termination Costs
|
|
|||||||||||||||
|
(In millions)
|
||||||||||||||||||||||
Health Plans
|
$
|
—
|
|
|
$
|
33
|
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
34
|
|
|
$
|
82
|
|
Molina Medicaid Solutions
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
||||||
Other
|
36
|
|
|
39
|
|
|
57
|
|
|
45
|
|
|
2
|
|
|
179
|
|
||||||
|
$
|
36
|
|
|
$
|
72
|
|
|
$
|
80
|
|
|
$
|
45
|
|
|
$
|
36
|
|
|
$
|
269
|
|
|
Separation Costs - Former Executives
|
|
One-Time Termination Benefits
|
|
Other Restructuring Costs
|
|
Total
|
||||||||
|
(In millions)
|
||||||||||||||
Accrued as of December 31, 2017
|
$
|
2
|
|
|
$
|
11
|
|
|
$
|
35
|
|
|
$
|
48
|
|
Adjustments
|
—
|
|
|
(1
|
)
|
|
10
|
|
|
9
|
|
||||
Charges
|
—
|
|
|
6
|
|
|
2
|
|
|
8
|
|
||||
Cash payments
|
(2
|
)
|
|
(15
|
)
|
|
(15
|
)
|
|
(32
|
)
|
||||
Accrued as of September 30, 2018
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
32
|
|
|
$
|
33
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In millions)
|
||||||||||||||
Total revenue:
|
|
|
|
|
|
|
|
||||||||
Health Plans
|
$
|
4,565
|
|
|
$
|
4,899
|
|
|
$
|
13,826
|
|
|
$
|
14,538
|
|
Molina Medicaid Solutions
|
53
|
|
|
47
|
|
|
152
|
|
|
140
|
|
||||
Other
|
79
|
|
|
85
|
|
|
248
|
|
|
256
|
|
||||
Consolidated
|
$
|
4,697
|
|
|
$
|
5,031
|
|
|
$
|
14,226
|
|
|
$
|
14,934
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In millions)
|
||||||||||||||
Margin:
|
|
|
|
|
|
|
|
||||||||
Health Plans
|
$
|
547
|
|
|
$
|
557
|
|
|
$
|
1,812
|
|
|
$
|
1,343
|
|
Molina Medicaid Solutions
|
14
|
|
|
5
|
|
|
26
|
|
|
13
|
|
||||
Other
|
5
|
|
|
2
|
|
|
16
|
|
|
8
|
|
||||
Total margin
|
566
|
|
|
564
|
|
|
1,854
|
|
|
1,364
|
|
||||
Add: other operating revenues
(1)
|
230
|
|
|
124
|
|
|
661
|
|
|
379
|
|
||||
Add: gain on sale of subsidiary
|
37
|
|
|
—
|
|
|
37
|
|
|
—
|
|
||||
Less: other operating expenses
(2)
|
(538
|
)
|
|
(769
|
)
|
|
(1,693
|
)
|
|
(2,029
|
)
|
||||
Operating income (loss)
|
295
|
|
|
(81
|
)
|
|
859
|
|
|
(286
|
)
|
||||
Other expenses, net
|
36
|
|
|
32
|
|
|
116
|
|
|
10
|
|
||||
Income (loss) before income taxes
|
$
|
259
|
|
|
$
|
(113
|
)
|
|
$
|
743
|
|
|
$
|
(296
|
)
|
(1)
|
Other operating revenues include premium tax revenue, health insurer fees reimbursed, and investment income and other revenue.
|
(2)
|
Other operating expenses include general and administrative expenses, premium tax expenses, health insurer fees, depreciation and amortization, restructuring and separation costs, and impairment losses.
|
|
Three Months Ended September 30, 2018
|
||||||||||||||||||
|
Parent Guarantor
|
|
Other Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue
|
$
|
273
|
|
|
$
|
—
|
|
|
$
|
4,695
|
|
|
$
|
(271
|
)
|
|
$
|
4,697
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Medical care costs
|
(11
|
)
|
|
—
|
|
|
3,801
|
|
|
—
|
|
|
3,790
|
|
|||||
Cost of service revenue
|
—
|
|
|
—
|
|
|
111
|
|
|
—
|
|
|
111
|
|
|||||
General and administrative expenses
|
243
|
|
|
1
|
|
|
338
|
|
|
(271
|
)
|
|
311
|
|
|||||
Premium tax expenses
|
—
|
|
|
—
|
|
|
110
|
|
|
—
|
|
|
110
|
|
|||||
Health insurer fees
|
—
|
|
|
—
|
|
|
87
|
|
|
—
|
|
|
87
|
|
|||||
Depreciation and amortization
|
17
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
25
|
|
|||||
Restructuring and separation costs
|
3
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
5
|
|
|||||
Total operating expenses
|
252
|
|
|
1
|
|
|
4,457
|
|
|
(271
|
)
|
|
4,439
|
|
|||||
Gain on sale of subsidiary
|
37
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|||||
Operating income (loss)
|
58
|
|
|
(1
|
)
|
|
238
|
|
|
—
|
|
|
295
|
|
|||||
Interest expense
|
26
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|||||
Other expenses, net
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|||||
Income (loss) before income taxes
|
22
|
|
|
(1
|
)
|
|
238
|
|
|
—
|
|
|
259
|
|
|||||
Income tax (benefit) expense
|
(6
|
)
|
|
—
|
|
|
68
|
|
|
—
|
|
|
62
|
|
|||||
Net income (loss) before equity in net earnings (losses) of subsidiaries
|
28
|
|
|
(1
|
)
|
|
170
|
|
|
—
|
|
|
197
|
|
|||||
Equity in net earnings (losses) of subsidiaries
|
169
|
|
|
(2
|
)
|
|
—
|
|
|
(167
|
)
|
|
—
|
|
|||||
Net income (loss)
|
$
|
197
|
|
|
$
|
(3
|
)
|
|
$
|
170
|
|
|
$
|
(167
|
)
|
|
$
|
197
|
|
|
Three Months Ended September 30, 2018
|
||||||||||||||||||
|
Parent Guarantor
|
|
Other Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Net income (loss)
|
$
|
197
|
|
|
$
|
(3
|
)
|
|
$
|
170
|
|
|
$
|
(167
|
)
|
|
$
|
197
|
|
Other comprehensive gain, net of tax
|
1
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
1
|
|
|||||
Comprehensive income (loss)
|
$
|
198
|
|
|
$
|
(3
|
)
|
|
$
|
171
|
|
|
$
|
(168
|
)
|
|
$
|
198
|
|
|
Three Months Ended September 30, 2017
|
||||||||||||||||||
|
Parent Guarantor
|
|
Other Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue
|
$
|
380
|
|
|
$
|
(1
|
)
|
|
$
|
5,031
|
|
|
$
|
(379
|
)
|
|
$
|
5,031
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Medical care costs
|
3
|
|
|
—
|
|
|
4,217
|
|
|
—
|
|
|
4,220
|
|
|||||
Cost of service revenue
|
—
|
|
|
—
|
|
|
123
|
|
|
—
|
|
|
123
|
|
|||||
General and administrative expenses
|
244
|
|
|
—
|
|
|
518
|
|
|
(379
|
)
|
|
383
|
|
|||||
Premium tax expenses
|
—
|
|
|
—
|
|
|
106
|
|
|
—
|
|
|
106
|
|
|||||
Depreciation and amortization
|
23
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
33
|
|
|||||
Restructuring and separation costs
|
77
|
|
|
—
|
|
|
41
|
|
|
—
|
|
|
118
|
|
|||||
Impairment losses
|
—
|
|
|
—
|
|
|
129
|
|
|
—
|
|
|
129
|
|
|||||
Total operating expenses
|
347
|
|
|
—
|
|
|
5,144
|
|
|
(379
|
)
|
|
5,112
|
|
|||||
Operating income (loss)
|
33
|
|
|
(1
|
)
|
|
(113
|
)
|
|
—
|
|
|
(81
|
)
|
|||||
Interest expense
|
32
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|||||
Income (loss) before income taxes
|
1
|
|
|
(1
|
)
|
|
(113
|
)
|
|
—
|
|
|
(113
|
)
|
|||||
Income tax expense (benefit)
|
9
|
|
|
(1
|
)
|
|
(24
|
)
|
|
—
|
|
|
(16
|
)
|
|||||
Net loss before equity in net (losses) earnings of subsidiaries
|
(8
|
)
|
|
—
|
|
|
(89
|
)
|
|
—
|
|
|
(97
|
)
|
|||||
Equity in net (losses) earnings of subsidiaries
|
(89
|
)
|
|
(86
|
)
|
|
8
|
|
|
167
|
|
|
—
|
|
|||||
Net loss
|
$
|
(97
|
)
|
|
$
|
(86
|
)
|
|
$
|
(81
|
)
|
|
$
|
167
|
|
|
$
|
(97
|
)
|
|
Three Months Ended September 30, 2017
|
||||||||||||||||||
|
Parent Guarantor
|
|
Other Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Net loss
|
$
|
(97
|
)
|
|
$
|
(86
|
)
|
|
$
|
(81
|
)
|
|
$
|
167
|
|
|
$
|
(97
|
)
|
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Comprehensive loss
|
$
|
(97
|
)
|
|
$
|
(86
|
)
|
|
$
|
(81
|
)
|
|
$
|
167
|
|
|
$
|
(97
|
)
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||
|
Parent Guarantor
|
|
Other Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue
|
$
|
867
|
|
|
$
|
2
|
|
|
$
|
14,220
|
|
|
$
|
(863
|
)
|
|
$
|
14,226
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Medical care costs
|
(4
|
)
|
|
—
|
|
|
11,366
|
|
|
—
|
|
|
11,362
|
|
|||||
Cost of service revenue
|
—
|
|
|
—
|
|
|
349
|
|
|
—
|
|
|
349
|
|
|||||
General and administrative expenses
|
762
|
|
|
3
|
|
|
1,096
|
|
|
(863
|
)
|
|
998
|
|
|||||
Premium tax expenses
|
—
|
|
|
—
|
|
|
320
|
|
|
—
|
|
|
320
|
|
|||||
Health insurer fees
|
—
|
|
|
—
|
|
|
261
|
|
|
—
|
|
|
261
|
|
|||||
Depreciation and amortization
|
53
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
76
|
|
|||||
Restructuring and separation costs
|
28
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
38
|
|
|||||
Total operating expenses
|
839
|
|
|
3
|
|
|
13,425
|
|
|
(863
|
)
|
|
13,404
|
|
|||||
Gain on sale of subsidiary
|
37
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|||||
Operating income (loss)
|
65
|
|
|
(1
|
)
|
|
795
|
|
|
—
|
|
|
859
|
|
|||||
Interest expense
|
90
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
91
|
|
|||||
Other expenses, net
|
25
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|||||
(Loss) income before income taxes
|
(50
|
)
|
|
(1
|
)
|
|
794
|
|
|
—
|
|
|
743
|
|
|||||
Income tax expense
|
4
|
|
|
—
|
|
|
233
|
|
|
—
|
|
|
237
|
|
|||||
Net (loss) income before equity in net earnings (losses) of subsidiaries
|
(54
|
)
|
|
(1
|
)
|
|
561
|
|
|
—
|
|
|
506
|
|
|||||
Equity in net earnings (losses) of subsidiaries
|
560
|
|
|
(6
|
)
|
|
—
|
|
|
(554
|
)
|
|
—
|
|
|||||
Net income (loss)
|
$
|
506
|
|
|
$
|
(7
|
)
|
|
$
|
561
|
|
|
$
|
(554
|
)
|
|
$
|
506
|
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||
|
Parent Guarantor
|
|
Other Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Net income (loss)
|
$
|
506
|
|
|
$
|
(7
|
)
|
|
$
|
561
|
|
|
$
|
(554
|
)
|
|
$
|
506
|
|
Other comprehensive loss, net of tax
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|
4
|
|
|
(4
|
)
|
|||||
Comprehensive income (loss)
|
$
|
502
|
|
|
$
|
(7
|
)
|
|
$
|
557
|
|
|
$
|
(550
|
)
|
|
$
|
502
|
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||||||
|
Parent Guarantor
|
|
Other Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue
|
$
|
1,010
|
|
|
$
|
1
|
|
|
$
|
14,937
|
|
|
$
|
(1,014
|
)
|
|
$
|
14,934
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Medical care costs
|
10
|
|
|
—
|
|
|
12,812
|
|
|
—
|
|
|
12,822
|
|
|||||
Cost of service revenue
|
—
|
|
|
—
|
|
|
369
|
|
|
—
|
|
|
369
|
|
|||||
General and administrative expenses
|
799
|
|
|
2
|
|
|
1,440
|
|
|
(1,014
|
)
|
|
1,227
|
|
|||||
Premium tax expenses
|
—
|
|
|
—
|
|
|
331
|
|
|
—
|
|
|
331
|
|
|||||
Depreciation and amortization
|
75
|
|
|
—
|
|
|
34
|
|
|
—
|
|
|
109
|
|
|||||
Restructuring and separation costs
|
120
|
|
|
—
|
|
|
41
|
|
|
—
|
|
|
161
|
|
|||||
Impairment losses
|
—
|
|
|
—
|
|
|
201
|
|
|
—
|
|
|
201
|
|
|||||
Total operating expenses
|
1,004
|
|
|
2
|
|
|
15,228
|
|
|
(1,014
|
)
|
|
15,220
|
|
|||||
Operating income (loss)
|
6
|
|
|
(1
|
)
|
|
(291
|
)
|
|
—
|
|
|
(286
|
)
|
|||||
Interest expense
|
85
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
85
|
|
|||||
Other income, net
|
(75
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(75
|
)
|
|||||
Loss before income taxes
|
(4
|
)
|
|
(1
|
)
|
|
(291
|
)
|
|
—
|
|
|
(296
|
)
|
|||||
Income tax expense (benefit)
|
26
|
|
|
(1
|
)
|
|
(71
|
)
|
|
—
|
|
|
(46
|
)
|
|||||
Net loss before equity in net (losses) earnings of subsidiaries
|
(30
|
)
|
|
—
|
|
|
(220
|
)
|
|
—
|
|
|
(250
|
)
|
|||||
Equity in net (losses) earnings of subsidiaries
|
(220
|
)
|
|
(152
|
)
|
|
8
|
|
|
364
|
|
|
—
|
|
|||||
Net loss
|
$
|
(250
|
)
|
|
$
|
(152
|
)
|
|
$
|
(212
|
)
|
|
$
|
364
|
|
|
$
|
(250
|
)
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||||||
|
Parent Guarantor
|
|
Other Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Net loss
|
$
|
(250
|
)
|
|
$
|
(152
|
)
|
|
$
|
(212
|
)
|
|
$
|
364
|
|
|
$
|
(250
|
)
|
Other comprehensive income, net of tax
|
1
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
1
|
|
|||||
Comprehensive loss
|
$
|
(249
|
)
|
|
$
|
(152
|
)
|
|
$
|
(211
|
)
|
|
$
|
363
|
|
|
$
|
(249
|
)
|
|
September 30, 2018
|
||||||||||||||||||
|
Parent Guarantor
|
|
Other Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In millions)
|
||||||||||||||||||
ASSETS
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
399
|
|
|
$
|
2
|
|
|
$
|
2,413
|
|
|
$
|
—
|
|
|
$
|
2,814
|
|
Investments
|
106
|
|
|
—
|
|
|
1,706
|
|
|
—
|
|
|
1,812
|
|
|||||
Receivables
|
2
|
|
|
—
|
|
|
1,344
|
|
|
—
|
|
|
1,346
|
|
|||||
Due from (to) affiliates
|
63
|
|
|
(4
|
)
|
|
(59
|
)
|
|
—
|
|
|
—
|
|
|||||
Prepaid expenses and other current assets
|
293
|
|
|
—
|
|
|
193
|
|
|
—
|
|
|
486
|
|
|||||
Derivative asset
|
843
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
843
|
|
|||||
Total current assets
|
1,706
|
|
|
(2
|
)
|
|
5,597
|
|
|
—
|
|
|
7,301
|
|
|||||
Property, equipment, and capitalized software, net
|
187
|
|
|
—
|
|
|
77
|
|
|
—
|
|
|
264
|
|
|||||
Goodwill and intangible assets, net
|
14
|
|
|
—
|
|
|
181
|
|
|
—
|
|
|
195
|
|
|||||
Restricted investments
|
—
|
|
|
—
|
|
|
118
|
|
|
—
|
|
|
118
|
|
|||||
Investment in subsidiaries, net
|
2,578
|
|
|
74
|
|
|
—
|
|
|
(2,652
|
)
|
|
—
|
|
|||||
Deferred income taxes
|
48
|
|
|
—
|
|
|
95
|
|
|
—
|
|
|
143
|
|
|||||
Other assets
|
40
|
|
|
—
|
|
|
6
|
|
|
(16
|
)
|
|
30
|
|
|||||
|
$
|
4,573
|
|
|
$
|
72
|
|
|
$
|
6,074
|
|
|
$
|
(2,668
|
)
|
|
$
|
8,051
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Medical claims and benefits payable
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
2,038
|
|
|
$
|
—
|
|
|
$
|
2,042
|
|
Amounts due government agencies
|
—
|
|
|
—
|
|
|
1,030
|
|
|
—
|
|
|
1,030
|
|
|||||
Accounts payable and accrued liabilities
|
635
|
|
|
—
|
|
|
189
|
|
|
—
|
|
|
824
|
|
|||||
Deferred revenue
|
—
|
|
|
—
|
|
|
178
|
|
|
—
|
|
|
178
|
|
|||||
Current portion of long-term debt
|
296
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
296
|
|
|||||
Derivative liability
|
843
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
843
|
|
|||||
Total current liabilities
|
1,778
|
|
|
—
|
|
|
3,435
|
|
|
—
|
|
|
5,213
|
|
|||||
Long-term debt and lease financing obligations
|
1,217
|
|
|
—
|
|
|
16
|
|
|
(16
|
)
|
|
1,217
|
|
|||||
Other long-term liabilities
|
17
|
|
|
—
|
|
|
43
|
|
|
—
|
|
|
60
|
|
|||||
Total liabilities
|
3,012
|
|
|
—
|
|
|
3,494
|
|
|
(16
|
)
|
|
6,490
|
|
|||||
Total stockholders’ equity
|
1,561
|
|
|
72
|
|
|
2,580
|
|
|
(2,652
|
)
|
|
1,561
|
|
|||||
|
$
|
4,573
|
|
|
$
|
72
|
|
|
$
|
6,074
|
|
|
$
|
(2,668
|
)
|
|
$
|
8,051
|
|
|
December 31, 2017
|
||||||||||||||||||
|
Parent Guarantor
|
|
Other Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In millions)
|
||||||||||||||||||
ASSETS
|
|||||||||||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
504
|
|
|
$
|
—
|
|
|
$
|
2,682
|
|
|
$
|
—
|
|
|
$
|
3,186
|
|
Investments
|
192
|
|
|
—
|
|
|
2,332
|
|
|
—
|
|
|
2,524
|
|
|||||
Restricted investments
|
169
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
169
|
|
|||||
Receivables
|
2
|
|
|
—
|
|
|
869
|
|
|
—
|
|
|
871
|
|
|||||
Due from (to) affiliates
|
148
|
|
|
(5
|
)
|
|
(143
|
)
|
|
—
|
|
|
—
|
|
|||||
Prepaid expenses and other current assets
|
103
|
|
|
16
|
|
|
136
|
|
|
(16
|
)
|
|
239
|
|
|||||
Derivative asset
|
522
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
522
|
|
|||||
Total current assets
|
1,640
|
|
|
11
|
|
|
5,876
|
|
|
(16
|
)
|
|
7,511
|
|
|||||
Property, equipment, and capitalized software, net
|
223
|
|
|
—
|
|
|
119
|
|
|
—
|
|
|
342
|
|
|||||
Goodwill and intangible assets, net
|
15
|
|
|
—
|
|
|
240
|
|
|
—
|
|
|
255
|
|
|||||
Restricted investments
|
—
|
|
|
—
|
|
|
119
|
|
|
—
|
|
|
119
|
|
|||||
Investment in subsidiaries, net
|
2,306
|
|
|
82
|
|
|
—
|
|
|
(2,388
|
)
|
|
—
|
|
|||||
Deferred income taxes
|
17
|
|
|
—
|
|
|
101
|
|
|
(15
|
)
|
|
103
|
|
|||||
Other assets
|
32
|
|
|
—
|
|
|
110
|
|
|
(1
|
)
|
|
141
|
|
|||||
|
$
|
4,233
|
|
|
$
|
93
|
|
|
$
|
6,565
|
|
|
$
|
(2,420
|
)
|
|
$
|
8,471
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Medical claims and benefits payable
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
2,189
|
|
|
$
|
—
|
|
|
$
|
2,192
|
|
Amounts due government agencies
|
—
|
|
|
—
|
|
|
1,542
|
|
|
—
|
|
|
1,542
|
|
|||||
Accounts payable and accrued liabilities
|
178
|
|
|
14
|
|
|
174
|
|
|
—
|
|
|
366
|
|
|||||
Deferred revenue
|
—
|
|
|
—
|
|
|
282
|
|
|
—
|
|
|
282
|
|
|||||
Current portion of long-term debt
|
653
|
|
|
—
|
|
|
16
|
|
|
(16
|
)
|
|
653
|
|
|||||
Derivative liability
|
522
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
522
|
|
|||||
Total current liabilities
|
1,356
|
|
|
14
|
|
|
4,203
|
|
|
(16
|
)
|
|
5,557
|
|
|||||
Long-term debt and lease financing obligations
|
1,516
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,516
|
|
|||||
Deferred income taxes
|
—
|
|
|
—
|
|
|
15
|
|
|
(15
|
)
|
|
—
|
|
|||||
Other long-term liabilities
|
24
|
|
|
1
|
|
|
37
|
|
|
(1
|
)
|
|
61
|
|
|||||
Total liabilities
|
2,896
|
|
|
15
|
|
|
4,255
|
|
|
(32
|
)
|
|
7,134
|
|
|||||
Total stockholders’ equity
|
1,337
|
|
|
78
|
|
|
2,310
|
|
|
(2,388
|
)
|
|
1,337
|
|
|||||
|
$
|
4,233
|
|
|
$
|
93
|
|
|
$
|
6,565
|
|
|
$
|
(2,420
|
)
|
|
$
|
8,471
|
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||
|
Parent Guarantor
|
|
Other Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
451
|
|
|
$
|
1
|
|
|
$
|
(643
|
)
|
|
$
|
—
|
|
|
$
|
(191
|
)
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of investments
|
(136
|
)
|
|
—
|
|
|
(1,066
|
)
|
|
—
|
|
|
(1,202
|
)
|
|||||
Proceeds from sales and maturities of investments
|
383
|
|
|
—
|
|
|
1,687
|
|
|
—
|
|
|
2,070
|
|
|||||
Purchases of property, equipment and capitalized software
|
(16
|
)
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(24
|
)
|
|||||
Capital contributions to subsidiaries
|
(122
|
)
|
|
—
|
|
|
122
|
|
|
—
|
|
|
—
|
|
|||||
Dividends from subsidiaries
|
268
|
|
|
—
|
|
|
(268
|
)
|
|
—
|
|
|
—
|
|
|||||
Change in amounts due to/from affiliates
|
70
|
|
|
1
|
|
|
(71
|
)
|
|
—
|
|
|
—
|
|
|||||
Other, net
|
—
|
|
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
(23
|
)
|
|||||
Net cash provided by investing activities
|
447
|
|
|
1
|
|
|
373
|
|
|
—
|
|
|
821
|
|
|||||
Financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Repayment of credit facility
|
(300
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(300
|
)
|
|||||
Repayment of principal amount of 1.125% Notes
|
(236
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(236
|
)
|
|||||
Cash paid for partial settlement of 1.125% Conversion Option
|
(477
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(477
|
)
|
|||||
Cash received for partial termination of 1.125% Call Option
|
477
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
477
|
|
|||||
Cash paid for partial termination of 1.125% Warrants
|
(419
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(419
|
)
|
|||||
Repayment of principal amount of 1.625% Notes
|
(64
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(64
|
)
|
|||||
Other, net
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
Net cash used in financing activities
|
(1,012
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,012
|
)
|
|||||
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents
|
(114
|
)
|
|
2
|
|
|
(270
|
)
|
|
—
|
|
|
(382
|
)
|
|||||
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period
|
513
|
|
|
—
|
|
|
2,777
|
|
|
—
|
|
|
3,290
|
|
|||||
Cash, cash equivalents, and restricted cash and cash equivalents at end of period
|
$
|
399
|
|
|
$
|
2
|
|
|
$
|
2,507
|
|
|
$
|
—
|
|
|
$
|
2,908
|
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||||||
|
Parent Guarantor
|
|
Other Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
$
|
215
|
|
|
$
|
—
|
|
|
$
|
742
|
|
|
$
|
—
|
|
|
$
|
957
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of investments
|
(331
|
)
|
|
—
|
|
|
(1,563
|
)
|
|
—
|
|
|
(1,894
|
)
|
|||||
Proceeds from sales and maturities of investments
|
148
|
|
|
—
|
|
|
1,388
|
|
|
—
|
|
|
1,536
|
|
|||||
Purchases of property, equipment and capitalized software
|
(67
|
)
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
(85
|
)
|
|||||
Capital contributions to subsidiaries
|
(363
|
)
|
|
2
|
|
|
361
|
|
|
—
|
|
|
—
|
|
|||||
Dividends from subsidiaries
|
136
|
|
|
—
|
|
|
(136
|
)
|
|
—
|
|
|
—
|
|
|||||
Change in amounts due to/from affiliates
|
(100
|
)
|
|
—
|
|
|
100
|
|
|
—
|
|
|
—
|
|
|||||
Other, net
|
—
|
|
|
—
|
|
|
(33
|
)
|
|
—
|
|
|
(33
|
)
|
|||||
Net cash (used in) provided by investing activities
|
(577
|
)
|
|
2
|
|
|
99
|
|
|
—
|
|
|
(476
|
)
|
|||||
Financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from senior notes offerings, net of issuance costs
|
325
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
325
|
|
|||||
Proceeds from borrowings under credit facility
|
300
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300
|
|
|||||
Other, net
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
Net cash provided by financing activities
|
632
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
632
|
|
|||||
Net increase in cash, cash equivalents, and restricted cash and cash equivalents
|
270
|
|
|
2
|
|
|
841
|
|
|
—
|
|
|
1,113
|
|
|||||
Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period
|
86
|
|
|
—
|
|
|
2,826
|
|
|
—
|
|
|
2,912
|
|
|||||
Cash, cash equivalents, and restricted cash and cash equivalents at end of period
|
$
|
356
|
|
|
$
|
2
|
|
|
$
|
3,667
|
|
|
$
|
—
|
|
|
$
|
4,025
|
|
•
|
the success of the Company’s profit improvement and maintenance initiatives, including the timing and amounts of the benefits realized, and administrative and medical cost savings achieved;
|
•
|
the numerous political and market-based uncertainties associated with the Affordable Care Act (the “ACA”) or “Obamacare;”
|
•
|
the market dynamics surrounding the ACA Marketplaces, including but not limited to uncertainties associated with risk adjustment requirements, the potential for disproportionate enrollment of higher acuity members, the discontinuation of premium tax credits, and the adequacy of agreed rates;
|
•
|
subsequent adjustments to reported premium revenue based upon subsequent developments or new information, including changes to estimated amounts payable or receivable related to Marketplace risk adjustment;
|
•
|
effective management of the Company’s medical costs;
|
•
|
the Company’s ability to predict with a reasonable degree of accuracy utilization rates, including utilization rates associated with seasonal flu patterns or other newly emergent diseases;
|
•
|
significant budget pressures on state governments and their potential inability to maintain current rates, to implement expected rate increases, or to maintain existing benefit packages or membership eligibility thresholds or criteria;
|
•
|
the full reimbursement of the ACA health insurer fee, or HIF;
|
•
|
the success of the Company’s efforts to retain existing or awarded government contracts, including the success of any protest filings or defenses;
|
•
|
the Company’s ability to manage its operations, including maintaining and creating adequate internal systems and controls relating to authorizations, approvals, provider payments, and the overall success of its care management initiatives;
|
•
|
the Company’s ability to consummate and realize benefits from divestitures and acquisitions, including the recently consummated MMS and Pathways divestitures;
|
•
|
the Company’s receipt of adequate premium rates to support increasing pharmacy costs, including costs associated with specialty drugs and costs resulting from formulary changes that allow the option of higher-priced non-generic drugs;
|
•
|
the Company’s ability to operate profitably in an environment where the trend in premium rate increases lags behind the trend in increasing medical costs;
|
•
|
the interpretation and implementation of federal or state medical cost expenditure floors, administrative cost and profit ceilings, premium stabilization programs, profit sharing arrangements, and risk adjustment provisions and requirements;
|
•
|
the Company’s estimates of amounts owed for such cost expenditure floors, administrative cost and profit ceilings, premium stabilization programs, profit-sharing arrangements, and risk adjustment provisions;
|
•
|
the Medicaid expansion medical cost corridors in California, New Mexico, and Washington, and any other retroactive adjustment to revenue where methodologies and procedures are subject to interpretation or dependent upon information about the health status of participants other than Molina members;
|
•
|
the interpretation and implementation of at-risk premium rules and state contract performance requirements regarding the achievement of certain quality measures, and the Company’s ability to recognize revenue amounts associated therewith;
|
•
|
cyber-attacks or other privacy or data security incidents resulting in an inadvertent unauthorized disclosure of protected health information;
|
•
|
the success of the Company’s health plan in Puerto Rico, including the resolution of the debt crisis and the effect of the PROMESA law, and the impact of any future significant weather events;
|
•
|
the success and renewal of the Company’s duals demonstration programs in California, Illinois, Michigan, Ohio, South Carolina, and Texas;
|
•
|
the accurate estimation of incurred but not reported or paid medical costs across the Company’s health plans;
|
•
|
efforts by states to recoup previously paid and recognized premium amounts;
|
•
|
complications, member confusion, or enrollment backlogs related to the annual renewal of Medicaid coverage;
|
•
|
government audits and reviews, or potential investigations, and any fine, sanction, enrollment freeze, monitoring program, or premium recovery that may result therefrom;
|
•
|
changes with respect to the Company’s provider contracts and the loss of providers;
|
•
|
approval by state regulators of dividends and distributions by the Company’s health plan subsidiaries;
|
•
|
changes in funding under the Company’s contracts as a result of regulatory changes, programmatic adjustments, or other reforms;
|
•
|
high dollar claims related to catastrophic illness;
|
•
|
the favorable resolution of litigation, arbitration, or administrative proceedings, including litigation involving the ACA to which we ourselves are not a direct party;
|
•
|
the relatively small number of states in which we operate health plans, including the greater scale and revenues of the Company’s California, Ohio, Texas, and Washington health plans;
|
•
|
the availability of adequate financing on acceptable terms to fund and capitalize the Company’s expansion and growth, repay the Company’s outstanding indebtedness at maturity and meet its liquidity needs, including the interest expense and other costs associated with such financing;
|
•
|
the Company’s failure to comply with the financial or other covenants in its credit agreement or the indentures governing its outstanding notes;
|
•
|
the sufficiency of the Company’s funds on hand to pay the amounts due upon conversion or maturity of its outstanding notes;
|
•
|
the failure of a state in which we operate to renew its federal Medicaid waiver;
|
•
|
changes generally affecting the managed care or Medicaid management information systems industries;
|
•
|
increases in government surcharges, taxes, and assessments, including but not limited to the deductibility of certain compensation costs;
|
•
|
newly emergent viruses or widespread epidemics, public catastrophes or terrorist attacks, and associated public alarm;
|
•
|
the unexpected loss of the leadership of one or more of our senior executives;
and
|
•
|
increasing competition and consolidation in the Medicaid industry
;
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In millions, except per-share amounts)
|
||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Premium revenue
|
$
|
4,337
|
|
|
$
|
4,777
|
|
|
$
|
13,174
|
|
|
$
|
14,165
|
|
Premium tax revenue
|
110
|
|
|
106
|
|
|
320
|
|
|
331
|
|
||||
Health insurer fees reimbursed
|
83
|
|
|
—
|
|
|
248
|
|
|
—
|
|
||||
Investment income and other revenue
|
37
|
|
|
18
|
|
|
93
|
|
|
48
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Medical care costs
|
3,790
|
|
|
4,220
|
|
|
11,362
|
|
|
12,822
|
|
||||
General and administrative expenses
|
311
|
|
|
383
|
|
|
998
|
|
|
1,227
|
|
||||
Premium tax expenses
|
110
|
|
|
106
|
|
|
320
|
|
|
331
|
|
||||
Health insurer fees
|
87
|
|
|
—
|
|
|
261
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Gain on sale of subsidiary
|
37
|
|
|
—
|
|
|
37
|
|
|
—
|
|
||||
Operating income (loss)
|
295
|
|
|
(81
|
)
|
|
859
|
|
|
(286
|
)
|
||||
Interest expense
|
26
|
|
|
32
|
|
|
91
|
|
|
85
|
|
||||
Other expenses (income), net
|
10
|
|
|
—
|
|
|
25
|
|
|
(75
|
)
|
||||
Income tax expense (benefit)
|
62
|
|
|
(16
|
)
|
|
237
|
|
|
(46
|
)
|
||||
Net income (loss)
|
197
|
|
|
(97
|
)
|
|
506
|
|
|
(250
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating Statistics:
|
|
|
|
|
|
|
|
||||||||
Ending total membership
|
4.0
|
|
|
4.5
|
|
|
4.0
|
|
|
4.5
|
|
||||
MCR
(1)
|
87.4
|
%
|
|
88.3
|
%
|
|
86.2
|
%
|
|
90.5
|
%
|
||||
G&A ratio
(2)
|
6.6
|
%
|
|
7.6
|
%
|
|
7.0
|
%
|
|
8.2
|
%
|
||||
Premium tax ratio
(1)
|
2.5
|
%
|
|
2.2
|
%
|
|
2.4
|
%
|
|
2.3
|
%
|
||||
Effective income tax rate
|
24.0
|
%
|
|
14.6
|
%
|
|
31.9
|
%
|
|
15.5
|
%
|
||||
Net profit (loss) margin
(2)
|
4.2
|
%
|
|
(1.9
|
)%
|
|
3.6
|
%
|
|
(1.7
|
)%
|
||||
Net income (loss) per diluted share
|
$
|
2.90
|
|
|
$
|
(1.70
|
)
|
|
$
|
7.60
|
|
|
$
|
(4.44
|
)
|
(1)
|
MCR represents medical care costs as a percentage of premium revenue; premium tax ratio represents premium tax expenses as a percentage of premium revenue plus premium tax revenue.
|
(2)
|
Net profit margin represents net income as a percentage of total revenue. G&A ratio represents general and administrative expenses as a percentage of total revenue.
|
|
Three Months Ended September 30, 2018
|
|
Nine Months Ended September 30, 2018
|
||||||||||||
|
Amount
|
|
Per Diluted Share
(1)
|
|
Amount
|
|
Per Diluted Share
(1)
|
||||||||
|
|
||||||||||||||
Retroactive California Medicaid Expansion risk corridor for the state fiscal year ended June 30, 2017
|
$
|
(57
|
)
|
|
$
|
(0.65
|
)
|
|
$
|
(57
|
)
|
|
$
|
(0.67
|
)
|
Marketplace risk adjustment, for 2017 dates of service
|
—
|
|
|
—
|
|
|
56
|
|
|
0.66
|
|
||||
Marketplace CSR subsidies, for 2017 dates of service
|
5
|
|
|
0.06
|
|
|
81
|
|
|
0.95
|
|
||||
Gain on sale of subsidiary
|
37
|
|
|
0.42
|
|
|
37
|
|
|
0.43
|
|
||||
Restructuring costs
(2)
|
(5
|
)
|
|
(0.06
|
)
|
|
(38
|
)
|
|
(0.45
|
)
|
||||
Loss on debt extinguishment
|
(10
|
)
|
|
(0.12
|
)
|
|
(25
|
)
|
|
(0.33
|
)
|
||||
|
$
|
(30
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
54
|
|
|
$
|
0.59
|
|
|
Three Months Ended September 30, 2017
|
|
Nine Months Ended September 30, 2017
|
||||||||||||
|
Amount
|
|
Per Diluted Share
(1)
|
|
Amount
|
|
Per Diluted Share
(1)
|
||||||||
|
|
||||||||||||||
Restructuring costs
(2)
|
$
|
(118
|
)
|
|
$
|
(1.39
|
)
|
|
$
|
(161
|
)
|
|
$
|
(1.92
|
)
|
Impairment losses
(3)
|
(129
|
)
|
|
(1.77
|
)
|
|
(201
|
)
|
|
(2.77
|
)
|
||||
Change in Marketplace premium deficiency reserve for 2017 service dates
|
30
|
|
|
0.33
|
|
|
(40
|
)
|
|
(0.45
|
)
|
||||
Termination fee received for terminated Medicare acquisition
|
—
|
|
|
—
|
|
|
75
|
|
|
0.84
|
|
||||
|
$
|
(217
|
)
|
|
$
|
(2.83
|
)
|
|
$
|
(327
|
)
|
|
$
|
(4.30
|
)
|
(1)
|
Except for certain items that are not deductible for tax purposes, per diluted share amounts are generally calculated at the statutory income tax rates of 22% for 2018, and 37% for 2017.
|
(2)
|
For more information, refer to Notes to Consolidated Financial Statements, Note
10
, “
Restructuring and Separation Costs
.”
|
(3)
|
In the nine months ended September 30, 2017, we recorded non-cash impairment losses for goodwill and intangibles, primarily relating to our Pathways subsidiary.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(In millions)
|
||||||||||||||
Health Plans segment medical margin
(1)
|
$
|
547
|
|
|
$
|
557
|
|
|
$
|
1,812
|
|
|
$
|
1,343
|
|
Molina Medicaid Solutions segment service margin
(2)
|
14
|
|
|
5
|
|
|
26
|
|
|
13
|
|
||||
Other segment service margin
(2)
|
5
|
|
|
2
|
|
|
16
|
|
|
8
|
|
||||
Total margin
|
$
|
566
|
|
|
$
|
564
|
|
|
$
|
1,854
|
|
|
$
|
1,364
|
|
|
|
|
|
|
|
|
|
||||||||
Health Plans segment medical care ratio
|
87.4
|
%
|
|
88.3
|
%
|
|
86.2
|
%
|
|
90.5
|
%
|
(1)
|
Represents premium revenue minus medical care costs.
|
(2)
|
Represents service revenue minus cost of service revenue.
|
•
|
In May 2018, our Washington health plan was selected by the Washington State Health Care Authority (HCA) to enter into a managed care contract for the eight remaining regions of the state’s Apple Health Integrated Managed Care program, in addition to the two regions previously awarded to us. We were selected by HCA for the following regions: Greater Columbia, King, North Sound, Pierce, and Spokane beginning January 1, 2019; and Salish, Thurston-Mason, and Great Rivers beginning January 1, 2020. As of September 30, 2018, we served approximately
738,000
Medicaid members in Washington, which represented premium revenue of
$1,558 million
for the
nine months ended September 30, 2018
.
|
•
|
In June 2018, our Florida health plan was awarded comprehensive Medicaid Managed Care contracts by the Florida Agency for Health Care Administration (AHCA) in Regions 8 and 11 of the Florida Statewide Medicaid Managed Care Invitation to Negotiate. As of September 30, 2018, we served approximately
96,000
Medicaid members in those regions, which represented premium revenue of approximately
$346 million
for the
nine months ended September 30, 2018
. Services under the new contract are expected to begin on January 1, 2019. We will be serving both the Medicaid and long-term care populations in the two regions.
|
•
|
In July 2018, our Puerto Rico health plan was selected by the Puerto Rico Health Insurance Administration to be one of the organizations to administer the Commonwealth’s new Medicaid Managed Care contract. We expect to serve approximately
290,000
members under the new contract. The base contract runs for a period of three years with an optional one-year extension. As of September 30, 2018, we served approximately
320,000
Medicaid members in the East and Southwest regions of Puerto Rico, which represented premium revenue of
$549 million
for the
nine months ended September 30, 2018
.
|
|
|
|
|
|
|
Premium Revenue
|
|
|
|
|
|||
|
|
|
|
Membership as of
|
|
Nine Months Ended
|
|
Anticipated
|
|||||
State Health Plan
|
|
Medicaid Program(s)
|
|
September 30, 2018
|
|
September 30, 2018
|
|
Award Date
|
|
Effective Date
|
|||
Texas
|
|
ABD, MMP
|
|
99,000
|
|
|
$
|
1,460
|
|
|
Q2 2019
|
|
6/1/2020
|
Texas
|
|
TANF, CHIP
|
|
124,000
|
|
|
236
|
|
|
Q3 2019
|
|
9/1/2020
|
•
|
Ending the entitlement nature of Medicaid by capping future increases in federal health spending for these programs, and shifting 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 (a “per capita cap”);
|
•
|
Requiring Medicaid beneficiaries to work;
|
•
|
Limiting the amount of lifetime benefits for Medicaid beneficiaries; and
|
•
|
Numerous other potential changes and reforms.
|
|
September 30,
2018 |
|
December 31,
2017 |
|
September 30,
2017 |
|||
Ending Membership by Program:
|
|
|
|
|
|
|||
Temporary Assistance for Needy Families (TANF) and Children’s Health Insurance Program (CHIP)
|
2,436,000
|
|
|
2,457,000
|
|
|
2,451,000
|
|
Medicaid Expansion
|
664,000
|
|
|
668,000
|
|
|
662,000
|
|
Aged, Blind or Disabled (ABD)
|
415,000
|
|
|
412,000
|
|
|
411,000
|
|
Total Medicaid
|
3,515,000
|
|
|
3,537,000
|
|
|
3,524,000
|
|
Medicare-Medicaid Plan (MMP) – Integrated
(1)
|
55,000
|
|
|
57,000
|
|
|
58,000
|
|
Medicare Special Needs Plans (Medicare)
|
45,000
|
|
|
44,000
|
|
|
44,000
|
|
Total Medicare
|
100,000
|
|
|
101,000
|
|
|
102,000
|
|
Total Medicaid and Medicare
|
3,615,000
|
|
|
3,638,000
|
|
|
3,626,000
|
|
Marketplace
|
384,000
|
|
|
815,000
|
|
|
877,000
|
|
|
3,999,000
|
|
|
4,453,000
|
|
|
4,503,000
|
|
|
|
|
|
|
|
|||
Ending Membership by Health Plan:
|
|
|
|
|
|
|||
California
|
623,000
|
|
|
746,000
|
|
|
751,000
|
|
Florida
|
395,000
|
|
|
625,000
|
|
|
641,000
|
|
Illinois
|
223,000
|
|
|
165,000
|
|
|
163,000
|
|
Michigan
|
394,000
|
|
|
398,000
|
|
|
399,000
|
|
New Mexico
|
234,000
|
|
|
253,000
|
|
|
256,000
|
|
Ohio
|
315,000
|
|
|
327,000
|
|
|
343,000
|
|
Puerto Rico
|
320,000
|
|
|
314,000
|
|
|
306,000
|
|
South Carolina
|
117,000
|
|
|
116,000
|
|
|
113,000
|
|
Texas
|
436,000
|
|
|
430,000
|
|
|
444,000
|
|
Washington
|
770,000
|
|
|
777,000
|
|
|
770,000
|
|
Other
(2)
|
172,000
|
|
|
302,000
|
|
|
317,000
|
|
|
3,999,000
|
|
|
4,453,000
|
|
|
4,503,000
|
|
(1)
|
MMP members receive both Medicaid and Medicare coverage from Molina Healthcare.
|
(2)
|
“Other” includes the Idaho, New York, Utah and Wisconsin health plans, which are not individually significant to our consolidated operating results.
|
|
PMPM Premiums
|
||||||||||
|
Low
|
|
High
|
|
Consolidated
|
||||||
TANF and CHIP
|
$
|
120.00
|
|
|
$
|
340.00
|
|
|
$
|
190.00
|
|
Medicaid Expansion
|
300.00
|
|
|
510.00
|
|
|
360.00
|
|
|||
ABD
|
520.00
|
|
|
1,530.00
|
|
|
1,030.00
|
|
|||
MMP – Integrated
|
1,360.00
|
|
|
3,190.00
|
|
|
2,170.00
|
|
|||
Medicare
|
600.00
|
|
|
1,270.00
|
|
|
1,170.00
|
|
|||
Marketplace
|
250.00
|
|
|
650.00
|
|
|
380.00
|
|
|
Three Months Ended September 30, 2018
|
||||||||||||||||||||||||
|
Member
Months
(1)
|
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR
(2)
|
|
Medical Margin
|
||||||||||||||||
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
|||||||||||||||
TANF and CHIP
|
7.4
|
|
|
$
|
1,379
|
|
|
$
|
187.03
|
|
|
$
|
1,228
|
|
|
$
|
166.41
|
|
|
89.0
|
%
|
|
$
|
151
|
|
Medicaid Expansion
|
2.0
|
|
|
671
|
|
|
333.11
|
|
|
640
|
|
|
317.62
|
|
|
95.3
|
|
|
31
|
|
|||||
ABD
|
1.2
|
|
|
1,322
|
|
|
1,054.92
|
|
|
1,186
|
|
|
946.38
|
|
|
89.7
|
|
|
136
|
|
|||||
Total Medicaid
|
10.6
|
|
|
3,372
|
|
|
316.86
|
|
|
3,054
|
|
|
286.86
|
|
|
90.5
|
|
|
318
|
|
|||||
MMP
|
0.2
|
|
|
353
|
|
|
2,159.72
|
|
|
323
|
|
|
1,981.45
|
|
|
91.7
|
|
|
30
|
|
|||||
Medicare
|
0.1
|
|
|
156
|
|
|
1,157.71
|
|
|
121
|
|
|
895.25
|
|
|
77.3
|
|
|
35
|
|
|||||
Total Medicare
|
0.3
|
|
|
509
|
|
|
1,706.95
|
|
|
444
|
|
|
1,490.63
|
|
|
87.3
|
|
|
65
|
|
|||||
Total Medicaid and Medicare
|
10.9
|
|
|
3,881
|
|
|
354.70
|
|
|
3,498
|
|
|
319.63
|
|
|
90.1
|
|
|
383
|
|
|||||
Marketplace
|
1.2
|
|
|
456
|
|
|
394.02
|
|
|
292
|
|
|
252.61
|
|
|
64.1
|
|
|
164
|
|
|||||
|
12.1
|
|
|
$
|
4,337
|
|
|
$
|
358.46
|
|
|
$
|
3,790
|
|
|
$
|
313.23
|
|
|
87.4
|
%
|
|
$
|
547
|
|
|
Three Months Ended September 30, 2017
|
||||||||||||||||||||||||
|
Member
Months
(1)
|
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR
(2)
|
|
Medical Margin
|
||||||||||||||||
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
|||||||||||||||
TANF and CHIP
|
7.5
|
|
|
$
|
1,392
|
|
|
$
|
185.95
|
|
|
$
|
1,242
|
|
|
$
|
165.76
|
|
|
89.1
|
%
|
|
$
|
150
|
|
Medicaid Expansion
|
2.0
|
|
|
773
|
|
|
385.58
|
|
|
667
|
|
|
332.99
|
|
|
86.4
|
|
|
106
|
|
|||||
ABD
|
1.2
|
|
|
1,288
|
|
|
1,038.85
|
|
|
1,259
|
|
|
1,016.06
|
|
|
97.8
|
|
|
29
|
|
|||||
Total Medicaid
|
10.7
|
|
|
3,453
|
|
|
321.77
|
|
|
3,168
|
|
|
295.23
|
|
|
91.8
|
|
|
285
|
|
|||||
MMP
|
0.2
|
|
|
378
|
|
|
2,263.07
|
|
|
336
|
|
|
2,013.67
|
|
|
89.0
|
|
|
42
|
|
|||||
Medicare
|
0.1
|
|
|
163
|
|
|
1,231.61
|
|
|
126
|
|
|
951.01
|
|
|
77.2
|
|
|
37
|
|
|||||
Total Medicare
|
0.3
|
|
|
541
|
|
|
1,806.26
|
|
|
462
|
|
|
1,543.05
|
|
|
85.4
|
|
|
79
|
|
|||||
Total Medicaid and Medicare
|
11.0
|
|
|
3,994
|
|
|
362.04
|
|
|
3,630
|
|
|
329.08
|
|
|
90.9
|
|
|
364
|
|
|||||
Marketplace
|
2.7
|
|
|
783
|
|
|
301.72
|
|
|
590
|
|
|
227.22
|
|
|
75.3
|
|
|
193
|
|
|||||
|
13.7
|
|
|
$
|
4,777
|
|
|
$
|
350.55
|
|
|
$
|
4,220
|
|
|
$
|
309.68
|
|
|
88.3
|
%
|
|
$
|
557
|
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||||||||
|
Member
Months
(1)
|
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR
(2)
|
|
Medical Margin
|
||||||||||||||||
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
|||||||||||||||
TANF and CHIP
|
22.3
|
|
|
$
|
4,145
|
|
|
$
|
186.12
|
|
|
$
|
3,705
|
|
|
$
|
166.35
|
|
|
89.4
|
%
|
|
$
|
440
|
|
Medicaid Expansion
|
6.1
|
|
|
2,184
|
|
|
359.37
|
|
|
1,957
|
|
|
322.01
|
|
|
89.6
|
|
|
227
|
|
|||||
ABD
|
3.7
|
|
|
3,864
|
|
|
1,034.25
|
|
|
3,550
|
|
|
950.11
|
|
|
91.9
|
|
|
314
|
|
|||||
Total Medicaid
|
32.1
|
|
|
10,193
|
|
|
317.70
|
|
|
9,212
|
|
|
287.10
|
|
|
90.4
|
|
|
981
|
|
|||||
MMP
|
0.5
|
|
|
1,077
|
|
|
2,173.90
|
|
|
941
|
|
|
1,899.26
|
|
|
87.4
|
|
|
136
|
|
|||||
Medicare
|
0.4
|
|
|
470
|
|
|
1,171.59
|
|
|
385
|
|
|
959.54
|
|
|
81.9
|
|
|
85
|
|
|||||
Total Medicare
|
0.9
|
|
|
1,547
|
|
|
1,725.71
|
|
|
1,326
|
|
|
1,479.06
|
|
|
85.7
|
|
|
221
|
|
|||||
Total Medicaid and Medicare
|
33.0
|
|
|
11,740
|
|
|
355.96
|
|
|
10,538
|
|
|
319.50
|
|
|
89.8
|
|
|
1,202
|
|
|||||
Marketplace
|
3.8
|
|
|
1,434
|
|
|
379.91
|
|
|
824
|
|
|
218.44
|
|
|
57.5
|
|
|
610
|
|
|||||
|
36.8
|
|
|
$
|
13,174
|
|
|
$
|
358.42
|
|
|
$
|
11,362
|
|
|
$
|
309.12
|
|
|
86.2
|
%
|
|
$
|
1,812
|
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||||||||||||
|
Member
Months
(1)
|
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR
(2)
|
|
Medical Margin
|
||||||||||||||||
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
|||||||||||||||
TANF and CHIP
|
22.8
|
|
|
$
|
4,185
|
|
|
$
|
183.69
|
|
|
$
|
3,861
|
|
|
$
|
169.44
|
|
|
92.2
|
%
|
|
$
|
324
|
|
Medicaid Expansion
|
6.1
|
|
|
2,376
|
|
|
389.14
|
|
|
2,045
|
|
|
334.93
|
|
|
86.1
|
|
|
331
|
|
|||||
ABD
|
3.6
|
|
|
3,769
|
|
|
1,033.45
|
|
|
3,634
|
|
|
996.58
|
|
|
96.4
|
|
|
135
|
|
|||||
Total Medicaid
|
32.5
|
|
|
10,330
|
|
|
317.49
|
|
|
9,540
|
|
|
293.21
|
|
|
92.4
|
|
|
790
|
|
|||||
MMP
|
0.5
|
|
|
1,083
|
|
|
2,189.96
|
|
|
976
|
|
|
1,974.22
|
|
|
90.1
|
|
|
107
|
|
|||||
Medicare
|
0.4
|
|
|
449
|
|
|
1,142.68
|
|
|
369
|
|
|
939.21
|
|
|
82.2
|
|
|
80
|
|
|||||
Total Medicare
|
0.9
|
|
|
1,532
|
|
|
1,726.39
|
|
|
1,345
|
|
|
1,516.09
|
|
|
87.8
|
|
|
187
|
|
|||||
Total Medicaid and Medicare
|
33.4
|
|
|
11,862
|
|
|
354.88
|
|
|
10,885
|
|
|
325.66
|
|
|
91.8
|
|
|
977
|
|
|||||
Marketplace
|
8.4
|
|
|
2,303
|
|
|
276.27
|
|
|
1,937
|
|
|
232.31
|
|
|
84.1
|
|
|
366
|
|
|||||
|
41.8
|
|
|
$
|
14,165
|
|
|
$
|
339.19
|
|
|
$
|
12,822
|
|
|
$
|
307.03
|
|
|
90.5
|
%
|
|
$
|
1,343
|
|
(1)
|
A member month is defined as the aggregate of each month’s ending membership for the period presented.
|
(2)
|
“MCR” represents medical costs as a percentage of premium revenue.
|
|
Three Months Ended September 30, 2018
|
||||||||||||||||||||||||
|
Member
Months |
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR
|
|
Medical Margin
|
||||||||||||||||
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
|||||||||||||||
California
|
1.7
|
|
|
$
|
435
|
|
|
$
|
249.00
|
|
|
$
|
446
|
|
|
$
|
255.22
|
|
|
102.5
|
%
|
|
$
|
(11
|
)
|
Florida
|
1.0
|
|
|
388
|
|
|
363.16
|
|
|
362
|
|
|
339.33
|
|
|
93.4
|
|
|
26
|
|
|||||
Illinois
|
0.7
|
|
|
207
|
|
|
312.72
|
|
|
182
|
|
|
274.98
|
|
|
87.9
|
|
|
25
|
|
|||||
Michigan
|
1.1
|
|
|
397
|
|
|
350.05
|
|
|
321
|
|
|
282.49
|
|
|
80.7
|
|
|
76
|
|
|||||
New Mexico
|
0.6
|
|
|
304
|
|
|
471.66
|
|
|
275
|
|
|
426.69
|
|
|
90.5
|
|
|
29
|
|
|||||
Ohio
|
0.9
|
|
|
584
|
|
|
624.84
|
|
|
532
|
|
|
568.93
|
|
|
91.1
|
|
|
52
|
|
|||||
Puerto Rico
|
1.0
|
|
|
179
|
|
|
189.65
|
|
|
162
|
|
|
171.96
|
|
|
90.7
|
|
|
17
|
|
|||||
South Carolina
|
0.4
|
|
|
124
|
|
|
354.53
|
|
|
112
|
|
|
318.56
|
|
|
89.9
|
|
|
12
|
|
|||||
Texas
|
0.7
|
|
|
577
|
|
|
848.47
|
|
|
525
|
|
|
772.14
|
|
|
91.0
|
|
|
52
|
|
|||||
Washington
|
2.3
|
|
|
511
|
|
|
226.77
|
|
|
444
|
|
|
197.04
|
|
|
86.9
|
|
|
67
|
|
|||||
Other
(1)
|
0.5
|
|
|
175
|
|
|
334.29
|
|
|
137
|
|
|
261.49
|
|
|
78.2
|
|
|
38
|
|
|||||
|
10.9
|
|
|
$
|
3,881
|
|
|
$
|
354.70
|
|
|
$
|
3,498
|
|
|
$
|
319.63
|
|
|
90.1
|
%
|
|
$
|
383
|
|
|
Three Months Ended September 30, 2017
|
||||||||||||||||||||||||
|
Member
Months |
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR
|
|
Medical Margin
|
||||||||||||||||
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
|||||||||||||||
California
|
1.9
|
|
|
$
|
601
|
|
|
$
|
322.97
|
|
|
$
|
563
|
|
|
$
|
302.67
|
|
|
93.7
|
%
|
|
$
|
38
|
|
Florida
|
1.0
|
|
|
388
|
|
|
355.59
|
|
|
390
|
|
|
356.83
|
|
|
100.3
|
|
|
(2
|
)
|
|||||
Illinois
|
0.5
|
|
|
137
|
|
|
287.69
|
|
|
138
|
|
|
289.36
|
|
|
100.6
|
|
|
(1
|
)
|
|||||
Michigan
|
1.2
|
|
|
390
|
|
|
337.17
|
|
|
345
|
|
|
298.83
|
|
|
88.6
|
|
|
45
|
|
|||||
New Mexico
|
0.7
|
|
|
304
|
|
|
429.07
|
|
|
277
|
|
|
390.91
|
|
|
91.1
|
|
|
27
|
|
|||||
Ohio
|
0.9
|
|
|
549
|
|
|
560.06
|
|
|
483
|
|
|
492.61
|
|
|
88.0
|
|
|
66
|
|
|||||
Puerto Rico
|
1.0
|
|
|
191
|
|
|
202.59
|
|
|
159
|
|
|
168.25
|
|
|
83.1
|
|
|
32
|
|
|||||
South Carolina
|
0.3
|
|
|
113
|
|
|
332.48
|
|
|
101
|
|
|
297.74
|
|
|
89.6
|
|
|
12
|
|
|||||
Texas
|
0.7
|
|
|
541
|
|
|
778.50
|
|
|
506
|
|
|
728.19
|
|
|
93.5
|
|
|
35
|
|
|||||
Washington
|
2.3
|
|
|
612
|
|
|
276.73
|
|
|
522
|
|
|
236.11
|
|
|
85.3
|
|
|
90
|
|
|||||
Other
(1)
|
0.5
|
|
|
168
|
|
|
294.99
|
|
|
146
|
|
|
256.99
|
|
|
87.1
|
|
|
22
|
|
|||||
|
11.0
|
|
|
$
|
3,994
|
|
|
$
|
362.04
|
|
|
$
|
3,630
|
|
|
$
|
329.08
|
|
|
90.9
|
%
|
|
$
|
364
|
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||||||||
|
Member
Months |
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR
|
|
Medical Margin
|
||||||||||||||||
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
|||||||||||||||
California
|
5.3
|
|
|
$
|
1,446
|
|
|
$
|
270.63
|
|
|
$
|
1,299
|
|
|
$
|
243.14
|
|
|
89.8
|
%
|
|
$
|
147
|
|
Florida
|
3.2
|
|
|
1,147
|
|
|
356.15
|
|
|
1,069
|
|
|
331.93
|
|
|
93.2
|
|
|
78
|
|
|||||
Illinois
|
1.8
|
|
|
551
|
|
|
308.45
|
|
|
474
|
|
|
265.47
|
|
|
86.1
|
|
|
77
|
|
|||||
Michigan
|
3.4
|
|
|
1,161
|
|
|
343.08
|
|
|
983
|
|
|
290.26
|
|
|
84.6
|
|
|
178
|
|
|||||
New Mexico
|
2.0
|
|
|
936
|
|
|
469.19
|
|
|
875
|
|
|
438.70
|
|
|
93.5
|
|
|
61
|
|
|||||
Ohio
|
2.8
|
|
|
1,670
|
|
|
590.71
|
|
|
1,474
|
|
|
521.26
|
|
|
88.2
|
|
|
196
|
|
|||||
Puerto Rico
|
2.9
|
|
|
549
|
|
|
190.34
|
|
|
501
|
|
|
173.83
|
|
|
91.3
|
|
|
48
|
|
|||||
South Carolina
|
1.1
|
|
|
369
|
|
|
350.94
|
|
|
323
|
|
|
306.76
|
|
|
87.4
|
|
|
46
|
|
|||||
Texas
|
2.1
|
|
|
1,715
|
|
|
831.21
|
|
|
1,554
|
|
|
753.31
|
|
|
90.6
|
|
|
161
|
|
|||||
Washington
|
6.8
|
|
|
1,666
|
|
|
245.40
|
|
|
1,544
|
|
|
227.41
|
|
|
92.7
|
|
|
122
|
|
|||||
Other
(1)
|
1.6
|
|
|
530
|
|
|
323.84
|
|
|
442
|
|
|
269.98
|
|
|
83.4
|
|
|
88
|
|
|||||
|
33.0
|
|
|
$
|
11,740
|
|
|
$
|
355.96
|
|
|
$
|
10,538
|
|
|
$
|
319.50
|
|
|
89.8
|
%
|
|
$
|
1,202
|
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||||||||||||
|
Member
Months |
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR
|
|
Medical Margin
|
||||||||||||||||
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
|||||||||||||||
California
|
5.6
|
|
|
$
|
1,771
|
|
|
$
|
316.83
|
|
|
$
|
1,586
|
|
|
$
|
283.82
|
|
|
89.6
|
%
|
|
$
|
185
|
|
Florida
|
3.2
|
|
|
1,132
|
|
|
347.41
|
|
|
1,112
|
|
|
341.15
|
|
|
98.2
|
|
|
20
|
|
|||||
Illinois
|
1.6
|
|
|
447
|
|
|
284.18
|
|
|
492
|
|
|
312.54
|
|
|
110.0
|
|
|
(45
|
)
|
|||||
Michigan
|
3.5
|
|
|
1,162
|
|
|
332.60
|
|
|
1,035
|
|
|
296.28
|
|
|
89.1
|
|
|
127
|
|
|||||
New Mexico
|
2.2
|
|
|
933
|
|
|
431.70
|
|
|
887
|
|
|
410.24
|
|
|
95.0
|
|
|
46
|
|
|||||
Ohio
|
2.9
|
|
|
1,598
|
|
|
541.56
|
|
|
1,434
|
|
|
486.02
|
|
|
89.7
|
|
|
164
|
|
|||||
Puerto Rico
|
2.9
|
|
|
553
|
|
|
190.99
|
|
|
513
|
|
|
177.01
|
|
|
92.7
|
|
|
40
|
|
|||||
South Carolina
|
1.0
|
|
|
329
|
|
|
325.43
|
|
|
301
|
|
|
298.43
|
|
|
91.7
|
|
|
28
|
|
|||||
Texas
|
2.1
|
|
|
1,592
|
|
|
760.76
|
|
|
1,468
|
|
|
701.32
|
|
|
92.2
|
|
|
124
|
|
|||||
Washington
|
6.7
|
|
|
1,835
|
|
|
275.60
|
|
|
1,603
|
|
|
240.83
|
|
|
87.4
|
|
|
232
|
|
|||||
Other
(1)
|
1.7
|
|
|
510
|
|
|
292.93
|
|
|
454
|
|
|
261.01
|
|
|
89.1
|
|
|
56
|
|
|||||
|
33.4
|
|
|
$
|
11,862
|
|
|
$
|
354.88
|
|
|
$
|
10,885
|
|
|
$
|
325.66
|
|
|
91.8
|
%
|
|
$
|
977
|
|
(1)
|
“Other” includes the Idaho, New York, Utah and Wisconsin health plans, which are not individually significant to our consolidated operating results.
|
|
Three Months Ended September 30, 2018
|
||||||||||||||||||||||||
|
Member
Months |
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR
|
|
Medical Margin
|
||||||||||||||||
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
|||||||||||||||
California
|
0.2
|
|
|
$
|
49
|
|
|
$
|
309.04
|
|
|
$
|
37
|
|
|
$
|
235.63
|
|
|
76.2
|
%
|
|
$
|
12
|
|
Florida
|
0.2
|
|
|
66
|
|
|
548.60
|
|
|
45
|
|
|
362.39
|
|
|
66.1
|
|
|
21
|
|
|||||
Michigan
|
—
|
|
|
12
|
|
|
233.51
|
|
|
7
|
|
|
145.13
|
|
|
62.1
|
|
|
5
|
|
|||||
New Mexico
|
0.1
|
|
|
28
|
|
|
419.20
|
|
|
18
|
|
|
249.33
|
|
|
59.5
|
|
|
10
|
|
|||||
Ohio
|
0.1
|
|
|
27
|
|
|
485.08
|
|
|
18
|
|
|
336.86
|
|
|
69.4
|
|
|
9
|
|
|||||
Texas
|
0.6
|
|
|
228
|
|
|
357.54
|
|
|
134
|
|
|
209.80
|
|
|
58.7
|
|
|
94
|
|
|||||
Washington
|
—
|
|
|
44
|
|
|
656.70
|
|
|
34
|
|
|
518.75
|
|
|
79.0
|
|
|
10
|
|
|||||
Other
(1)
|
—
|
|
|
2
|
|
|
NM
|
|
|
(1
|
)
|
|
NM
|
|
|
NM
|
|
3
|
|
||||||
|
1.2
|
|
|
$
|
456
|
|
|
$
|
394.02
|
|
|
$
|
292
|
|
|
$
|
252.61
|
|
|
64.1
|
%
|
|
$
|
164
|
|
|
Three Months Ended September 30, 2017
|
||||||||||||||||||||||||
|
Member
Months |
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR
|
|
Medical Margin
|
||||||||||||||||
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
|||||||||||||||
California
|
0.3
|
|
|
$
|
88
|
|
|
$
|
208.19
|
|
|
$
|
63
|
|
|
$
|
147.87
|
|
|
71.0
|
%
|
|
$
|
25
|
|
Florida
|
0.9
|
|
|
260
|
|
|
313.36
|
|
|
235
|
|
|
283.13
|
|
|
90.4
|
|
|
25
|
|
|||||
Michigan
|
—
|
|
|
14
|
|
|
212.08
|
|
|
10
|
|
|
150.24
|
|
|
70.8
|
|
|
4
|
|
|||||
New Mexico
|
0.1
|
|
|
29
|
|
|
383.58
|
|
|
20
|
|
|
269.28
|
|
|
70.2
|
|
|
9
|
|
|||||
Ohio
|
0.1
|
|
|
23
|
|
|
386.09
|
|
|
20
|
|
|
364.31
|
|
|
94.4
|
|
|
3
|
|
|||||
Texas
|
0.7
|
|
|
183
|
|
|
291.14
|
|
|
109
|
|
|
172.70
|
|
|
59.3
|
|
|
74
|
|
|||||
Washington
|
0.1
|
|
|
42
|
|
|
327.40
|
|
|
33
|
|
|
256.52
|
|
|
78.3
|
|
|
9
|
|
|||||
Other
(1)
|
0.5
|
|
|
144
|
|
|
375.83
|
|
|
100
|
|
|
259.15
|
|
|
69.0
|
|
|
44
|
|
|||||
|
2.7
|
|
|
$
|
783
|
|
|
$
|
301.72
|
|
|
$
|
590
|
|
|
$
|
227.22
|
|
|
75.3
|
%
|
|
$
|
193
|
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||||||||
|
Member
Months |
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR
|
|
Medical Margin
|
||||||||||||||||
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
|||||||||||||||
California
|
0.6
|
|
|
$
|
171
|
|
|
$
|
326.82
|
|
|
$
|
89
|
|
|
$
|
169.98
|
|
|
52.0
|
%
|
|
$
|
82
|
|
Florida
|
0.5
|
|
|
211
|
|
|
491.13
|
|
|
67
|
|
|
155.24
|
|
|
31.6
|
|
|
144
|
|
|||||
Michigan
|
0.1
|
|
|
40
|
|
|
248.24
|
|
|
23
|
|
|
145.38
|
|
|
58.6
|
|
|
17
|
|
|||||
New Mexico
|
0.2
|
|
|
93
|
|
|
426.07
|
|
|
55
|
|
|
247.57
|
|
|
58.1
|
|
|
38
|
|
|||||
Ohio
|
0.2
|
|
|
84
|
|
|
466.75
|
|
|
58
|
|
|
324.91
|
|
|
69.6
|
|
|
26
|
|
|||||
Texas
|
2.0
|
|
|
679
|
|
|
330.92
|
|
|
440
|
|
|
214.65
|
|
|
64.9
|
|
|
239
|
|
|||||
Washington
|
0.2
|
|
|
139
|
|
|
654.78
|
|
|
105
|
|
|
497.00
|
|
|
75.9
|
|
|
34
|
|
|||||
Other
(1)
|
—
|
|
|
17
|
|
|
NM
|
|
|
(13
|
)
|
|
NM
|
|
|
NM
|
|
30
|
|
||||||
|
3.8
|
|
|
$
|
1,434
|
|
|
$
|
379.91
|
|
|
$
|
824
|
|
|
$
|
218.44
|
|
|
57.5
|
%
|
|
$
|
610
|
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||||||||||||
|
Member
Months |
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR
|
|
Medical Margin
|
||||||||||||||||
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
|||||||||||||||
California
|
1.2
|
|
|
$
|
241
|
|
|
$
|
193.33
|
|
|
$
|
156
|
|
|
$
|
124.32
|
|
|
64.3
|
%
|
|
$
|
85
|
|
Florida
|
2.8
|
|
|
821
|
|
|
296.14
|
|
|
758
|
|
|
273.55
|
|
|
92.4
|
|
|
63
|
|
|||||
Michigan
|
0.2
|
|
|
41
|
|
|
187.96
|
|
|
27
|
|
|
126.76
|
|
|
67.4
|
|
|
14
|
|
|||||
New Mexico
|
0.2
|
|
|
82
|
|
|
338.18
|
|
|
62
|
|
|
256.05
|
|
|
75.7
|
|
|
20
|
|
|||||
Ohio
|
0.2
|
|
|
68
|
|
|
365.35
|
|
|
64
|
|
|
346.93
|
|
|
95.0
|
|
|
4
|
|
|||||
Texas
|
2.1
|
|
|
517
|
|
|
252.32
|
|
|
351
|
|
|
171.57
|
|
|
68.0
|
|
|
166
|
|
|||||
Washington
|
0.4
|
|
|
123
|
|
|
315.95
|
|
|
128
|
|
|
327.51
|
|
|
103.7
|
|
|
(5
|
)
|
|||||
Other
(1)
|
1.3
|
|
|
410
|
|
|
333.05
|
|
|
391
|
|
|
316.86
|
|
|
95.1
|
|
|
19
|
|
|||||
|
8.4
|
|
|
$
|
2,303
|
|
|
$
|
276.27
|
|
|
$
|
1,937
|
|
|
$
|
232.31
|
|
|
84.1
|
%
|
|
$
|
366
|
|
(1)
|
“Other” includes the Utah and Wisconsin health plans, which are not individually significant to our consolidated operating results. We terminated Marketplace operations at these plans effective January 1, 2018, so the ratios for 2018 periods are not meaningful (NM).
|
|
Three Months Ended September 30, 2018
|
||||||||||||||||||||||||
|
Member
Months
|
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR
|
|
Medical Margin
|
||||||||||||||||
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
|||||||||||||||
California
|
1.9
|
|
|
$
|
484
|
|
|
$
|
253.96
|
|
|
$
|
483
|
|
|
$
|
253.60
|
|
|
99.9
|
%
|
|
$
|
1
|
|
Florida
|
1.2
|
|
|
454
|
|
|
382.20
|
|
|
407
|
|
|
341.70
|
|
|
89.4
|
|
|
47
|
|
|||||
Illinois
|
0.7
|
|
|
207
|
|
|
312.72
|
|
|
182
|
|
|
274.98
|
|
|
87.9
|
|
|
25
|
|
|||||
Michigan
|
1.1
|
|
|
409
|
|
|
345.28
|
|
|
328
|
|
|
276.88
|
|
|
80.2
|
|
|
81
|
|
|||||
New Mexico
|
0.7
|
|
|
332
|
|
|
466.63
|
|
|
293
|
|
|
409.68
|
|
|
87.8
|
|
|
39
|
|
|||||
Ohio
|
1.0
|
|
|
611
|
|
|
616.95
|
|
|
550
|
|
|
555.83
|
|
|
90.1
|
|
|
61
|
|
|||||
Puerto Rico
|
1.0
|
|
|
179
|
|
|
189.65
|
|
|
162
|
|
|
171.96
|
|
|
90.7
|
|
|
17
|
|
|||||
South Carolina
|
0.4
|
|
|
124
|
|
|
354.53
|
|
|
112
|
|
|
318.56
|
|
|
89.9
|
|
|
12
|
|
|||||
Texas
|
1.3
|
|
|
805
|
|
|
611.01
|
|
|
659
|
|
|
500.14
|
|
|
81.9
|
|
|
146
|
|
|||||
Washington
|
2.3
|
|
|
555
|
|
|
239.25
|
|
|
478
|
|
|
206.38
|
|
|
86.3
|
|
|
77
|
|
|||||
Other
(1)
|
0.5
|
|
|
177
|
|
|
336.18
|
|
|
136
|
|
|
260.19
|
|
|
77.4
|
|
|
41
|
|
|||||
|
12.1
|
|
|
$
|
4,337
|
|
|
$
|
358.46
|
|
|
$
|
3,790
|
|
|
$
|
313.23
|
|
|
87.4
|
%
|
|
$
|
547
|
|
|
Three Months Ended September 30, 2017
|
||||||||||||||||||||||||
|
Member
Months
|
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR
|
|
Medical Margin
|
||||||||||||||||
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
|||||||||||||||
California
|
2.2
|
|
|
$
|
689
|
|
|
$
|
301.64
|
|
|
$
|
626
|
|
|
$
|
273.90
|
|
|
90.8
|
%
|
|
$
|
63
|
|
Florida
|
1.9
|
|
|
648
|
|
|
337.40
|
|
|
625
|
|
|
325.09
|
|
|
96.4
|
|
|
23
|
|
|||||
Illinois
|
0.5
|
|
|
137
|
|
|
287.69
|
|
|
138
|
|
|
289.36
|
|
|
100.6
|
|
|
(1
|
)
|
|||||
Michigan
|
1.2
|
|
|
404
|
|
|
330.27
|
|
|
355
|
|
|
290.63
|
|
|
88.0
|
|
|
49
|
|
|||||
New Mexico
|
0.8
|
|
|
333
|
|
|
424.61
|
|
|
297
|
|
|
378.98
|
|
|
89.3
|
|
|
36
|
|
|||||
Ohio
|
1.0
|
|
|
572
|
|
|
550.75
|
|
|
503
|
|
|
485.61
|
|
|
88.2
|
|
|
69
|
|
|||||
Puerto Rico
|
1.0
|
|
|
191
|
|
|
202.59
|
|
|
159
|
|
|
168.25
|
|
|
83.1
|
|
|
32
|
|
|||||
South Carolina
|
0.3
|
|
|
113
|
|
|
332.48
|
|
|
101
|
|
|
297.74
|
|
|
89.6
|
|
|
12
|
|
|||||
Texas
|
1.4
|
|
|
724
|
|
|
546.57
|
|
|
615
|
|
|
463.83
|
|
|
84.9
|
|
|
109
|
|
|||||
Washington
|
2.4
|
|
|
654
|
|
|
279.52
|
|
|
555
|
|
|
237.23
|
|
|
84.9
|
|
|
99
|
|
|||||
Other
(1)
|
1.0
|
|
|
312
|
|
|
327.47
|
|
|
246
|
|
|
257.86
|
|
|
78.7
|
|
|
66
|
|
|||||
|
13.7
|
|
|
$
|
4,777
|
|
|
$
|
350.55
|
|
|
$
|
4,220
|
|
|
$
|
309.68
|
|
|
88.3
|
%
|
|
$
|
557
|
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||||||||
|
Member
Months
|
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR
|
|
Medical Margin
|
||||||||||||||||
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
|||||||||||||||
California
|
5.9
|
|
|
$
|
1,617
|
|
|
$
|
275.64
|
|
|
$
|
1,388
|
|
|
$
|
236.61
|
|
|
85.8
|
%
|
|
$
|
229
|
|
Florida
|
3.7
|
|
|
1,358
|
|
|
372.07
|
|
|
1,136
|
|
|
311.09
|
|
|
83.6
|
|
|
222
|
|
|||||
Illinois
|
1.8
|
|
|
551
|
|
|
308.45
|
|
|
474
|
|
|
265.47
|
|
|
86.1
|
|
|
77
|
|
|||||
Michigan
|
3.5
|
|
|
1,201
|
|
|
338.83
|
|
|
1,006
|
|
|
283.77
|
|
|
83.7
|
|
|
195
|
|
|||||
New Mexico
|
2.2
|
|
|
1,029
|
|
|
464.92
|
|
|
930
|
|
|
419.78
|
|
|
90.3
|
|
|
99
|
|
|||||
Ohio
|
3.0
|
|
|
1,754
|
|
|
583.29
|
|
|
1,532
|
|
|
509.52
|
|
|
87.4
|
|
|
222
|
|
|||||
Puerto Rico
|
2.9
|
|
|
549
|
|
|
190.34
|
|
|
501
|
|
|
173.83
|
|
|
91.3
|
|
|
48
|
|
|||||
South Carolina
|
1.1
|
|
|
369
|
|
|
350.94
|
|
|
323
|
|
|
306.76
|
|
|
87.4
|
|
|
46
|
|
|||||
Texas
|
4.1
|
|
|
2,394
|
|
|
581.74
|
|
|
1,994
|
|
|
484.70
|
|
|
83.3
|
|
|
400
|
|
|||||
Washington
|
7.0
|
|
|
1,805
|
|
|
257.82
|
|
|
1,649
|
|
|
235.59
|
|
|
91.4
|
|
|
156
|
|
|||||
Other
(1)
|
1.6
|
|
|
547
|
|
|
334.26
|
|
|
429
|
|
|
262.27
|
|
|
78.5
|
|
|
118
|
|
|||||
|
36.8
|
|
|
$
|
13,174
|
|
|
$
|
358.42
|
|
|
$
|
11,362
|
|
|
$
|
309.12
|
|
|
86.2
|
%
|
|
$
|
1,812
|
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||||||||||||
|
Member
Months
|
|
Premium Revenue
|
|
Medical Care Costs
|
|
MCR
|
|
Medical Margin
|
||||||||||||||||
|
|
Total
|
|
PMPM
|
|
Total
|
|
PMPM
|
|
|
|||||||||||||||
California
|
6.8
|
|
|
$
|
2,012
|
|
|
$
|
294.26
|
|
|
$
|
1,742
|
|
|
$
|
254.67
|
|
|
86.5
|
%
|
|
$
|
270
|
|
Florida
|
6.0
|
|
|
1,953
|
|
|
323.86
|
|
|
1,870
|
|
|
310.09
|
|
|
95.7
|
|
|
83
|
|
|||||
Illinois
|
1.6
|
|
|
447
|
|
|
284.18
|
|
|
492
|
|
|
312.54
|
|
|
110.0
|
|
|
(45
|
)
|
|||||
Michigan
|
3.7
|
|
|
1,203
|
|
|
324.12
|
|
|
1,062
|
|
|
286.35
|
|
|
88.3
|
|
|
141
|
|
|||||
New Mexico
|
2.4
|
|
|
1,015
|
|
|
422.25
|
|
|
949
|
|
|
394.66
|
|
|
93.5
|
|
|
66
|
|
|||||
Ohio
|
3.1
|
|
|
1,666
|
|
|
531.17
|
|
|
1,498
|
|
|
477.81
|
|
|
90.0
|
|
|
168
|
|
|||||
Puerto Rico
|
2.9
|
|
|
553
|
|
|
190.99
|
|
|
513
|
|
|
177.01
|
|
|
92.7
|
|
|
40
|
|
|||||
South Carolina
|
1.0
|
|
|
329
|
|
|
325.43
|
|
|
301
|
|
|
298.43
|
|
|
91.7
|
|
|
28
|
|
|||||
Texas
|
4.2
|
|
|
2,109
|
|
|
509.09
|
|
|
1,819
|
|
|
439.11
|
|
|
86.3
|
|
|
290
|
|
|||||
Washington
|
7.1
|
|
|
1,958
|
|
|
277.83
|
|
|
1,731
|
|
|
245.62
|
|
|
88.4
|
|
|
227
|
|
|||||
Other
(1)
|
3.0
|
|
|
920
|
|
|
309.56
|
|
|
845
|
|
|
284.16
|
|
|
91.8
|
|
|
75
|
|
|||||
|
41.8
|
|
|
$
|
14,165
|
|
|
$
|
339.19
|
|
|
$
|
12,822
|
|
|
$
|
307.03
|
|
|
90.5
|
%
|
|
$
|
1,343
|
|
(1)
|
“Other” includes the Idaho, New York, Utah and Wisconsin health plans, which are not individually significant to our consolidated operating results.
|
|
Three Months Ended September 30,
|
||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||
|
Amount
|
|
PMPM
|
|
% of
Total
|
|
Amount
|
|
PMPM
|
|
% of
Total
|
||||||||||
Fee for service
|
$
|
2,865
|
|
|
$
|
236.74
|
|
|
75.6
|
%
|
|
$
|
3,196
|
|
|
$
|
234.51
|
|
|
75.8
|
%
|
Pharmacy
|
495
|
|
|
40.90
|
|
|
13.1
|
|
|
638
|
|
|
46.85
|
|
|
15.1
|
|
||||
Capitation
|
297
|
|
|
24.52
|
|
|
7.8
|
|
|
342
|
|
|
25.07
|
|
|
8.1
|
|
||||
Other
|
133
|
|
|
11.07
|
|
|
3.5
|
|
|
44
|
|
|
3.25
|
|
|
1.0
|
|
||||
|
$
|
3,790
|
|
|
$
|
313.23
|
|
|
100.0
|
%
|
|
$
|
4,220
|
|
|
$
|
309.68
|
|
|
100.0
|
%
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||
|
Amount
|
|
PMPM
|
|
% of Total
|
|
Amount
|
|
PMPM
|
|
% of Total
|
||||||||||
Fee for service
|
$
|
8,471
|
|
|
$
|
230.46
|
|
|
74.6
|
%
|
|
$
|
9,630
|
|
|
$
|
230.58
|
|
|
75.1
|
%
|
Pharmacy
|
1,645
|
|
|
44.76
|
|
|
14.5
|
|
|
1,904
|
|
|
45.60
|
|
|
14.8
|
|
||||
Capitation
|
891
|
|
|
24.23
|
|
|
7.8
|
|
|
1,022
|
|
|
24.47
|
|
|
8.0
|
|
||||
Other
|
355
|
|
|
9.67
|
|
|
3.1
|
|
|
266
|
|
|
6.38
|
|
|
2.1
|
|
||||
|
$
|
11,362
|
|
|
$
|
309.12
|
|
|
100.0
|
%
|
|
$
|
12,822
|
|
|
$
|
307.03
|
|
|
100.0
|
%
|
|
|
|
Nine Months Ended September 30,
|
||||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
|
(In millions)
|
||||||||||
Net cash (used in) provided by operating activities
|
$
|
(191
|
)
|
|
$
|
957
|
|
|
$
|
(1,148
|
)
|
Net cash provided by (used in) investing activities
|
821
|
|
|
(476
|
)
|
|
1,297
|
|
|||
Net cash (used in) provided by financing activities
|
(1,012
|
)
|
|
632
|
|
|
(1,644
|
)
|
|||
Net (decrease) increase in cash, cash equivalents, and restricted cash and cash equivalents
|
$
|
(382
|
)
|
|
$
|
1,113
|
|
|
$
|
(1,495
|
)
|
•
|
The timing effect of premium receipts and other revenues negatively impacted our cash flows from operating activities by
$687 million
on a year-over-year comparative basis. This impact was mainly related to the timing of premiums received at our California, Florida, Ohio, and Washington health plans.
|
•
|
The decline in medical claims and benefits payable, mainly resulting from reduced Marketplace membership in Florida, Utah, Washington and Wisconsin decreased cash flows from operations by
$693 million
.
|
•
|
Settlements with government agencies decreased our cash flows by
$633 million
on a year-over-year comparative basis, primarily due to payments in the
third quarter of 2018
, including risk transfer payments associated with our Marketplace health plans.
|
•
|
The declines discussed above were partially offset by favorable timing differences in the settlement of various operating expenses, including the health insurer fee (HIF).
The HIF payable of $348 million was paid on October 1, 2018, after receiving certain related state reimbursements.
These favorable timing differences benefited our cash flows by
$308 million
on a year-over-year comparative basis
.
|
•
|
$300 million
repayment of the Credit Facility in 2018;
|
•
|
$236 million
partial principal repayment of the 1.125% Notes in 2018;
|
•
|
$477 million
cash paid for partial settlement of the 1.125% Conversion Option in 2018;
|
•
|
$419 million
cash paid for partial termination of the 1.125% Warrants in 2018;
|
•
|
$64 million
principal repayment of 1.625% Notes in 2018; and
|
•
|
$625 million
of proceeds from the sale of the 4.875% Notes and borrowings under the Credit Facility in 2017.
|
Credit Facility Financial Covenants
|
Required Per Agreement
|
|
As of September 30, 2018
|
|
|
|
|
Net leverage ratio
|
<4.0x
|
|
1.2x
|
Interest coverage ratio
|
>3.5x
|
|
10.8x
|
•
|
Health Plans segment medical claims and benefits payable
. Refer to Notes to Consolidated Financial Statements, Note
6
, “
Medical Claims and Benefits Payable
,” for a table that presents the components of the change in medical claims and benefits payable, and for additional information regarding the factors used to determine our changes in estimates for all periods presented in the accompanying consolidated financial statements. Other than the discussion as noted above, there have been no significant changes during the
nine months ended September 30, 2018
, to our disclosure reported in “Critical Accounting Estimates” in our Annual Report on Form 10-K for the year ended
December 31, 2017
.
|
•
|
Health Plans segment contractual provisions that may adjust or limit revenue or profit
. For a discussion of this topic, including amounts recorded in our consolidated financial statements, refer to Notes to Consolidated Financial Statements, Note
2
, “
Significant Accounting Policies
.”
|
•
|
Health Plans segment quality incentives
. For a discussion of this topic, including amounts recorded in our consolidated financial statements, refer to Notes to Consolidated Financial Statements, Note
2
, “
Significant Accounting Policies
.”
|
•
|
Goodwill and intangible assets, net.
As result of the divestiture of MMS on September 30, 2018, the carrying amount of goodwill was reduced by $43 million; therefore, goodwill and intangible assets, net, represented approximately 2% of total assets and 12% of stockholders’ equity as of September 30, 2018, compared with 3% and 19%, respectively, at
December 31, 2017
. Other than the divestiture of MMS, there have been no significant changes during the
nine months ended September 30, 2018
, to our disclosure reported in “Critical Accounting Estimates” in our Annual Report on Form 10-K for the year ended
December 31, 2017
.
|
|
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 Authorized to Be Purchased Under the Plans or Programs
|
||||||
July 1 - July 31
|
105
|
|
|
$
|
97.94
|
|
|
—
|
|
|
$
|
—
|
|
August 1 - August 31
|
243
|
|
|
$
|
134.01
|
|
|
—
|
|
|
$
|
—
|
|
September 1 - September 30
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Total
|
348
|
|
|
$
|
123.13
|
|
|
—
|
|
|
|
(1)
|
During the
three months ended September 30, 2018
, we withheld
348
shares of common stock under our 2011 Equity Incentive Plan to settle employee income tax obligations.
|
Exhibit No.
|
|
Title
|
|
Method of Filing
|
|
|
|
|
|
|
Membership Interest Purchase Agreement, dated as of October 19, 2018, by and among Pyramid Health Holdings, LLC, Molina Pathways, LLC, and Molina Healthcare, Inc.*
|
|
Filed herewith.
|
|
|
|
|
|
|
|
Section 302 Certification of Chief Executive Officer
|
|
Filed herewith.
|
|
|
|
|
|
|
|
Section 302 Certification of Chief Financial Officer
|
|
Filed herewith.
|
|
|
|
|
|
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Filed herewith.
|
|
|
|
|
|
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Filed herewith.
|
|
|
|
|
|
|
101.INS
|
|
XBRL Taxonomy Instance Document.
|
|
Filed herewith.
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
Filed herewith.
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
Filed herewith.
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
Filed herewith.
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
Filed herewith.
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Filed herewith.
|
|
|
|
MOLINA HEALTHCARE, INC.
|
|
|
|
(Registrant)
|
|
|
|
|
Dated:
|
November 1, 2018
|
|
/s/ JOSEPH M. ZUBRETSKY
|
|
|
|
Joseph M. Zubretsky
|
|
|
|
Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
Dated:
|
November 1, 2018
|
|
/s/ THOMAS L. TRAN
|
|
|
|
Thomas L. Tran
|
|
|
|
Chief Financial Officer and Treasurer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
Dated: November 1, 2018
|
|
/s/ Joseph M. Zubretsky
|
|
|
Joseph M. Zubretsky
|
|
|
Chief Executive Officer, President and Director
|
|
|
|
Dated: November 1, 2018
|
|
/s/ Thomas L. Tran
|
|
|
Thomas L. Tran
|
|
|
Chief Financial Officer and Treasurer
|
|
|
|
Dated: November 1, 2018
|
|
/s/ Joseph M. Zubretsky
|
|
|
Joseph M. Zubretsky
|
|
|
Chief Executive Officer, President and Director
|
|
|
|
Dated: November 1, 2018
|
|
/s/ Thomas L. Tran
|
|
|
Thomas L. Tran
|
|
|
Chief Financial Officer and Treasurer
|