ACA Uneven For Molina, Health Net

The rollout of the Affordable Care Act last fall has had an uneven impact on two of California's publicly-traded health plans, according to fourth-quarter earnings report released last week.

Woodland Hills-based Health Net saw its enrollment numbers slip, while Long Beach-based Molina Healthcare saw a fairly significant bump.

Health Net saw its overall enrollment in California drop by 22,000 between the third and fourth quarters of last year. Molina, which focuses on Medicaid managed care and dual-eligible populations, reported a bump of nearly 10% between the end of 2012 and 2013, from 336,000 to 368,000.

For the fourth quarter ending Dec. 31, Health Net reported net income of $20 million on revenue of $2.7 billion. That compares to net income of $6 million on revenue of $2.8 million for the fourth quarter of 2012.

For calendar 2013, Health Net reported net income of $170.1 million on revenues of $11.1 billion. In 2012, it earned $122.1 million on revenues of $11.3 billion.

Molina reported a net loss of $9.1 million for the quarter, on revenue of $1.7 billion. That compares to net income of $25.6 million on revenue of $1.5 billion for the year-ago quarter.

In a call with analysts, company officials attributed the loss in part to extra expenses associated with ramping up operations in New Mexico, where it recently gained a new Medicaid managed care contract, as well as entering the Illinois and South Carolina markets. 

Health Net reported a similar ramp-up in expenses.

“Our general and administrative expenses in the fourth quarter of 2013 related to the implementation of the ACA were slightly higher than we anticipated,” said Jay Gellert, Health Net’s chief executive officer. 

The plan had enrolled more than 81,000 lives through Covered California as of Dec. 31. Molina has enrolled just under 3,000.

However, Molina reported a significant build-up in both profit and revenue for 2013. It reported net income of $52.9 million on revenue of $6.6 billion. That compares to net income of $9.8 million on revenue of $5.9 billion for 2012.

  “We laid the foundation for success in 2014 and beyond by increasing medical margins, securing (dual-eligible) contracts in five states...and building the robust administrative infrastructure we will need going forward,” said J. Mario Molina, M.D., Molina Healthcare's chief executive officer.

Both Health Net and Molina have won contracts to provide coverage to the dual-eligible population in Los Angeles County. Those enrollment numbers have yet to appear in either company’s numbers.