Molina Healthcare Predicts 6% Medicaid Attrition, MAPD Exit Slices $1 EPS
Molina Healthcare projects Medicaid membership attrition rising to 6% in 2026 and will incur a $1 EPS drag from exiting its MAPD product while reaffirming full-year guidance of $42 billion in premium revenue and at least $5 adjusted EPS. The company held $213 million in parent cash at quarter-end.
1. Medicaid Membership Attrition and MLR Outlook
Molina expects Medicaid membership attrition to rise to 6% in 2026, driven by underestimation of pressure in California, Illinois, New York and Texas. Low- and no-utilizer levels are 7.5 percentage points below pandemic peaks, supporting the assumption of no further acuity shift in the Medicaid population.
2. MAPD Product Exit and EPS Impact
The company will exit its MAPD product for the 2027 plan year, resulting in an estimated $1 drag on 2026 earnings per share. This strategic exit reflects a shift away from certain Medicare Advantage Prescription Drug offerings.
3. Capital Position and Cash Flow Targets
Parent company cash stood at $213 million at quarter-end, with expectations to exceed $600 million by year-end. Free cash flow at the parent level is prioritized, and the debt-to-capital ratio, currently at 48%, is targeted to fall into the low 40s.
4. 2026 Guidance Reaffirmation
Despite positive cost trends in inpatient, pharmacy and behavioral health management, Molina reaffirmed its full-year 2026 guidance of approximately $42 billion in premium revenue and at least $5 in adjusted EPS. Management cites a preference for additional time-tested data before raising guidance.