Molina Healthcare took the "prudent" route of reaffirming its 2026 outlook as questions loom in the Medicaid business.
The health insurer reported $14 million in profit for Q1, a significant drop from the $298 million the company brought in during the prior-year quarter. Revenues were $10.8 billion, also down year over year from the $11.1 billion reported in the first quarter of 2025.
Molina posted a 91.1% consolidated medical loss ratio (MLR), including a 92% MLR in Medicaid, which the company said was favorable to its expectations. Despite the positive news, the company reaffirmed its outlook of about $42 billion in premium revenue and at least $5 in earnings per share.
On its earnings call Thursday morning, investors pressed executives on why they chose not to boost the guidance as other payers have done so far this quarter, given that there are signs of cost moderation.
CEO Joseph Zubretsky said the team wants to make sure it has more information before taking that step.
"In this environment, we think it is entirely reasonable, if not prudent, to have two full quarters of information," he said. "Let the first quarter develop and become fully seasoned."
He said that "there is nothing in the first quarter result that is causing this caution," however. In Q2, the team will likely have more data on membership shifts in certain business lines, and it will make the most sense to update them with all that information in hand, Zubretsky said.
The company reported about 5 million members at the end of Q1, down from just under 5.5 million at the end of 2025 and nearly 5.8 million in the prior-year quarter. Of that, about 4.5 million are in Medicaid, per the earnings report.
Molina said it expects a 6% decline in Medicaid enrollment over the course of the year, up from its previous estimate of 2% attrition. Chief Financial Officer Mark Keim said the company is seeing increased attrition in several key markets, such as California, Illinois, New York and Texas.
In the Golden State specifically, the company is seeing particular membership impacts in the undocumented immigrant population, Keim said.
However, while there are membership declines on the horizon, Keim said that the team believes that acuity impact will be minimal, as many of the low utilizers exited the market in the post-COVID redetermination process, so massive shifts are largely behind them.
"So yes, lower on Medicaid membership, but we don't really see an acuity impact here," he said.
Molina's shares were trading about 12% above open Thursday afternoon.