Molina Healthcare, Inc. (NYSE:MOH) Q2 2020 Earnings Conference Call - Final Transcript

Jul 30, 2020 • 08:00 pm ET

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Molina Healthcare, Inc. (NYSE:MOH) Q2 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Thank you. We will now begin the question and answer session. [Operator Instructions] The first question today comes from Justin Lake of Wolfe Research. Please go ahead.

Analyst
Justin Lake

Thanks. Good morning. First question just on how you're thinking about the progression of Medicaid membership through the year. I think you added, you said about 4% of membership in the quarter on the Medicaid side. How do you expect to end the year on Medicaid and specifically can you delineate how much of that membership you expect to carve from this lack of disenrollment? And how are you treating that going into 2021 in terms of how you think that kind of - how long that lasts, given the FMAP and the net emergency status uncertainty?

Executive
Joseph Zubretsky

Sure, Justin this is Joe. We grew membership sequentially in Medicaid by 152,000 members at 5%. We believe with really good information that most of that was the result of the suspension of redetermination; that the unemployment surge that is likely to come to manage Medicaid has not yet occurred due to a variety of reasons, spousal coverage, COBRA and backlogs in the various states.

Certainly we expect that membership to be on the books for a while. We know it will hit a peak and we also know that as the economy recovers, it will begin to trip. We do not yet, we have various forecasts of how much membership we are likely to have at the end of the year as a result of all this. But I think we're comfortable in saying that our Medicaid membership will be higher than previously forecasted as a result of COVID. But we have not put a point estimate on that. It's still way too many variables to put a point estimate on how many members we're likely to get. I will say this, through the first three weeks of July the Medicaid membership continued to grow by about 30,000 members organically in the first three weeks of July.

Analyst
Justin Lake

That's helpful. Thanks for that. And then just last question on the exchange performance. You noted little bit higher costs due to higher acuity, can you flesh that out a little bit for us? And then, should we assume that you were able to catch that early enough for 2021 bids? And any color you can give us in terms of how you're thinking about, where you did, for margins in 2021 and that exchange business that would be helpful? Thanks.

Executive
Joseph Zubretsky

Sure. In our marketplace business, our silver bronze mix didn't change all that much. But we did have a churn in the bronze membership we took on, so we had many new members in our bronze product. The MLR ran higher on those numbers than we had expected. It's either higher medical -- if you are attracting the right risk or it's either mismanagement of your medical cost line, but if you're managing medical costs effectively, which we think we are, then the risk scores just haven't been