The Texas Health and Human Services Commission (HHSC) on Oct. 29 delivered the highly anticipated results of its latest managed Medicaid procurement, revealing its intent to award contracts to Aetna Inc., Anthem, Inc., El Paso Health Plan, Molina Healthcare, Inc., Centene Corp.’s Superior Health Plan and UnitedHealthcare to serve approximately 525,000 high-acuity enrollees through the STAR+PLUS program. While the news was a minor hit to incumbent Cigna Corp., it came as a bigger disappointment to Molina, which had been banking on reprocuring its existing business in six regions instead of renewing just one service area and picking up a new zone. Since embarking on a major restructuring plan that include leadership changes (RMA 8/10/17, p. 7), Molina has been on an aggressive path toward reclaiming double-digit topline growth. The company at its May investor day provided 2020 premium guidance that was above Wall Street consensus and a long-term earnings-per-share (EPS) growth target in the range of 12% to 15% that had some analysts doing a double take. Specifically, the company for 2020 forecast annual premiums of $17.0 billion to $17.3 billion, or 7% to 9% growth, before factoring in the return of the Affordable Care Act health insurer fee. But that growth included the status quo in Texas, and executives during its latest quarterly earnings call acknowledged that the insurer will have to adjust its expectations for 2020 on account of an anticipated four-month revenue shortfall.
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