Molina's third-quarter profit falls 52% from a year earlier as it reaffirms $5.25 adjusted EPS guidance

Molina Healthcare's third-quarter 2026 GAAP net income fell 52% from a year earlier to $38 million, or $0.73 a diluted share, on premium revenue of $10.46 billion, and the insurer reaffirmed full-year adjusted earnings guidance of at least $5.25 a share while raising its GAAP floor to at least $2.38.

Molina reported third-quarter 2026 adjusted net income of $46 million, or $0.89 a diluted share, against $97 million and $1.84 a year earlier, a decrease of 53%, and total revenue of $11.08 billion against $11.48 billion. The company attributed the profit decline mainly to a higher consolidated medical care ratio.

Marketplace membership fell 62.55% and pulled premium revenue down with it

Molina Healthcare served 4,862,000 members at September 30, 2026, against 5,628,000 a year earlier, and the Marketplace book accounted for most of the attrition: 267,000 members against 713,000, a decline of 62.55%. Marketplace premium revenue fell to $642 million from $1.2 billion, down 46.37%. Medicaid membership declined 5.76% to 4,372,000. Medicaid premium revenue still rose 2.3% to $8.2 billion from $8.02 billion as rate updates outran the smaller roster. Medicare membership was 222,000 against 266,000, with premium revenue of $1.62 billion against $1.61 billion. Consolidated premium revenue was $10.46 billion against $10.84 billion, a decline of 3.54% that the release rounds to 4%.

Medicaid's medical care ratio rose least as the other segments worsened sequentially

The consolidated medical care ratio was 92.9% of premium revenue, against 92.6% a year earlier and 92.2% in the second quarter, an increase of 0.7 points sequentially. Medicaid's ratio was 93.0%, up from 92.0% a year earlier but only 0.3 points above the second quarter's 92.7%. Medicare's ratio was 93.0%, up 2.3 points from 90.7% in the second quarter, and Marketplace's was 92.5%, up 3.6 points from 88.9%. Medical care costs fell 3.24% from a year earlier to $9.72 billion while the general and administrative expense ratio held at 6.4% reported and 6.3% adjusted. GAAP net income was $38 million, 36.67% below the second quarter's $60 million. Molina said the Medicaid ratio was in line with its expectations.

Guidance was reaffirmed at $5.25 adjusted, with the GAAP floor raised

Full-year 2026 guidance kept premium revenue at approximately $42 billion and adjusted earnings at no less than $5.25 a diluted share, unchanged from July, when the company lifted that figure by $0.25. The GAAP floor rose to at least $2.38 from at least $2.15. Both numbers absorb two drags the company had already disclosed: a loss of $1.50 per share from implementing the new Florida Medicaid contract in the fourth quarter of 2026, and a loss of $1.00 per share from the traditional MAPD product Molina will exit for 2027. The nine-month non-GAAP reconciliation carries a $1.82-a-share impairment charge tied to that exit.

Operating cash flow swung positive and parent-company cash rose

Nine-month operating cash flow was $629 million against an outflow of $237 million a year earlier, which the release attributes mainly to lower government receivable and payable settlements in 2026. Cash and investments at the parent company were approximately $608 million at September 30, 2026, against $223 million at December 31, 2025. Days in claims payable was 44, unchanged from June 30, 2026. Favorable development on prior-year reserves reduced nine-month medical care costs by $352 million, against $124 million in the same stretch of 2025.

The October 22 call is the next dated test

Chief Executive Joseph Zubretsky described the quarter as a turn: "We are pleased with our third quarter results in this challenging environment and reaffirm our full year guidance," and said that with medical cost trend apparently plateauing, "we believe we are likely observing the beginning of the turn in Medicaid margins." Management holds a call at 8:00 a.m. Eastern on Thursday, October 22, 2026. The release states that the Form 10-Q for the quarter ended September 30, 2026, is still to be filed, and it sets no 2027 premium revenue target beyond citing the strength of recent rate updates.