Molina Healthcare released preliminary results from its second-quarter financials as it braces for elevated medical costs.
Molina is the second insurer with a large presence on the Affordable Care Act's marketplaces to sound the alarm on higher-than-expected intensity in that population. The stormy seas come as the industry prepares for enhanced premium subsidies to run out at the end of this year, which have previously driven booms in marketplace plan enrollment.
In an announcement, Molina said it expects its second-quarter earnings per share to weigh in at $5.50, a figure "modestly below" its previous projection. In April, the company predicted its annual EPS would pass at least $24.50, while its revised estimate now lands between $21.50 and $22.50.
The insurer also said it expects to feel medical cost pressures across all of its business lines, including Medicaid and Medicare as well as the exchanges.
“The short-term earnings pressure we are experiencing results from what we believe to be a temporary dislocation between premium rates and medical cost trend, which has recently accelerated,” Molina CEO Joseph Zubretsky said in the press release.
“As we are still performing near our long-term target ranges, nothing, including the potential impacts of the budget bill, has changed our outlook for the long-term performance of the business," Zubretsky said.
Last week, Centene pulled its outlook for the year after an actuarial analysis suggested it would receive lower risk adjustment revenue transfers than it had predicted, and that growth in the marketplaces would not meet previous estimates.
The insurer said that it would give its marketplace another look and then resubmit them for 2026 to account for the higher-than-expected costs.
Molina's stock took a dive when Centene pulled back its 2025 guidance, and fell a bit further on Monday following its own announcement, with its share price down by 21% over the past five days.
Shares in Centene also plummeted after the company's announcement, with the price down by more than 38% over the previous five days.
Molina will release its full Q2 results after the markets close on July 23.