Molina Healthcare, Inc. confirmed that the California Department of Health Care Services (DHCS) has announced the awards of Medi-Cal contracts to Molina Healthcare of California commencing on January 1, 2024. The December 30th announcement confirms Molina's footprint as originally announced in August 2022, including Medi-Cal awards in each of Riverside, Sacramento, San Bernardino, and San Diego Counties and as a subcontractor in Los Angeles County. In Los Angeles County, Molina will share membership equally with the current commercial incumbent.

In Riverside and San Bernadino Counties, Molina will remain the sole commercial plan. DHCS has also agreed to grant Molina a contract to offer D-SNP products for dual eligible members in Los Angeles County. Under the finalized award, Molina's Medi-Cal membership is expected to grow from approximately 600,000 members as of September 30, 2022, to approximately 1.2 million members in 2024.

Molina's current annual premium revenue related to its Medi-Cal contract of approximately $1.9 billion is now expected to be approximately $3.9 billion for full year 2024 versus the prior expectation of $5.5 billion based on DHCS's August 2022 announcement. The projected combined 2024 revenues of California, Nebraska, and Iowa now total $4.2 billion. Incremental earnings from these recently announced portfolio additions are updated to at least $3.50 per share at full run rate, now reflecting portfolio target margins and modest operating leverage.

The DHCS grant of a D-SNP contract for dual eligible members in Los Angeles County will create a significant additional revenue opportunity for Molina. This additional opportunity is expected to exceed $500 million at full run rate and is not included in the updated $3.9 billion full year 2024 Medi-Cal revenue projection.