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© 2017 MOLINA HEALTHCARE, INC.
35th Annual JP Morgan Healthcare Conference
January 9-12, 2017
San Francisco, CA
Molina Healthcare
J. Mario Molina, MD
President & Chief Executive Officer
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Cautionary Statement
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This slide presentation and our
accompanying oral remarks contain “forward-looking statements” regarding, without limitation: political uncertainty and future
potential legislative changes to the Medicaid, ACA Marketplace, and Medicare programs; the pending Aetna-Humana Medicare
Advantage divestiture transaction, including the Federal Court’s decision in the pending antitrust proceeding, and the timely
satisfaction of all closing conditions; 2017 Marketplace enrollment estimates; and various other matters. All of our forward-
looking statements are subject to numerous risks, uncertainties, and other factors that could cause our actual results to differ
materially. Anyone viewing or listening to this presentation is urged to read the risk factors and cautionary statements found
under Item 1A in our annual report on Form 10-K, as well as the risk factors and cautionary statements in our quarterly reports
and in our other reports and filings with the Securities and Exchange Commission and available for viewing on its website at
sec.gov. Except to the extent otherwise required by federal securities laws, we do not undertake to address or update forward-
looking statements in future filings or communications regarding our business or operating results.
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Our mission
To provide quality health care to people receiving government assistance
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1. Total enrollment relates to estimated membership as of September 30, 2016 and includes the Total Care transaction in New York, which closed on August 1, 2016
Member Mix
4.2M
Members
Puerto Rico
USVI
1
Molina Health plans
Molina Medicaid Solutions
Primary Care Direct delivery
Pathways by Molina
1% Medicare
60%
TANF &
CHIP
16%
Expansion
9%
ABD
14%
Marketplace
1% Duals
Our footprint today
Health plan footprint includes the 5 largest Medicaid markets
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© 2017 MOLINA HEALTHCARE, INC.
51. MAC Stats Data Book December 2016, US Census, CMS office of the Actuary
Johnson
1965
Established
Medicaid &
Medicare
Programs
Clinton
1997
State
Children’s
Health
Insurance
Program
(SCHIP)
Bush
2003
Medicare
Modernization
Act
Obama
2010
Affordable
Care Act
Trump
2017
…
Molina responds and adapts
Molina has a proven track record in responding to changes in government programs
C. David Molina
1969
Obtains MPH at
UCLA
1980
Medicaid focused primary care
clinics founded in California
2000
Awarded first SCHIP contract
2005
Awarded Medicare Advantage
Special Needs Plan contracts
2013
Medicaid Expansion,
Marketplace, Dual Eligible
Demonstration Programs
1984
Awarded first Medicaid
HMO contract
Molina Healthcare
Response
123 Million
Currently enrolled
Medicaid & Medicare
beneficiaries1
4.2 Million
Medicaid & Medicare
Beneficiaries enrolled
with Molina
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Demand for low-cost health insurance will continue
States that have expanded Medicaid1
1. http://kkf.org/health-reform
2. http://www.cnbc.com/2016/06/13/obamacare-repeal-would-lead-to-24-million-more-people-without-health-insurance.html
Puerto Rico
USVI Number of Americans that currently receive their
care through Medicaid Expansion and Marketplace
products
24 Million2
Democratic States that
have expanded Medicaid
Republican States that have
expanded Medicaid
Healthcare is a growing
portion of federal and
state budgets
Long term care needs
of baby boomers
Growing cost of drugs
(specialty & generic)
Emerging public health
threats (i.e. Zika, etc)
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Fee for service remains significant
Managed care organizations and fee for service FY 2014
Sources:
1. CMS Medicaid Managed care Enrollment and Program Characteristics, 2014 – Published spring 2016
2. MAC Stats Data Book December 2015
62%
of Medicaid spending
remains in Fee-for-Service
$468B72M
24%
76%
62%
38%
55M
17M
$177B
$291B
Medicaid Enrollment 2014 Medicaid Benefit Spending 2014
Fee-For-Service
Managed Care
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Our toolkit for responding to industry changes & customer needs
Product portfolios
Risk-based health plan
outsourcing for Medicaid,
Medicare, and other
government programs.
Company owned and operated
primary care community clinics.
Medical Services
Primary Care
Provider network of outcome
based behavioral/mental
health and social services.
Medical Services
Behavioral Health
Government
Health Plans
Medicaid non-risk fee based
fiscal agent services, business
process outsourcing, and care
and utilization management.
Medicaid Health
Information Management
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Our health plan portfolio is geographically diverse
1. Premium revenue as reported for the Year ending September 30, 2016
2. The Total Care transaction in New York, closed on August 1, 2016
Washington 13%
Utah 3%
Texas 15%
Ohio 12%
New Mexico 8%
Illinois 4%
Florida 12%
California 14%
Wisconsin 3%
New York <1%2
Puerto Rico 5%
South Carolina 2% Michigan 9%
Risk-based health plan
outsourcing for Medicaid,
Medicare, and other
government programs.
Government
Health Plans
Premium Contribution by State1
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Premium
Revenue
10
Revenue diversification through expansion into new products
Molina’s changing patient mix
1. TANF includes CHIP membership, and starting in 2014, Medicaid Expansion membership
$6.2B $9.0B$3.1B
$274 $323$211
Blended
Revenue
PMPM
2014A2013A2008A
54%
Marketplace 1%
TANF136%
ABD
Medicare
7%
Duals 2%
ABD
51%
TANF40%
Medicare
9%
$328
$15.8B
3Q16 LTM
TANF1
79%
TANF
18%
Medicare 3%
52%
MarketplaceDuals
8%
8%
29%
ABD
Medicare
3%
TANF1
ABD
ABD
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Our Medicare business continues to grow
1. Kaiser Family Foundation, Medicare Advantage Fact Sheet, May 2016. http://kff.org/medicare/fact-sheet/medicare-advantage/
2. http://kff.org/medicare/issue-brief/income-and-assets-of-medicare-beneficiaries-2014-2030/
$0.3B
$0.4B
$0.5B $0.5B
$0.8B
$1.6B
2010 2011 2012 2013 2014 2015
As Medicare revenues continue to grow…
69% 31%
Traditional
Medicare
Medicare
Advantage
HMO 64%
Local PPO 23%
Regional PPO 7%
PFFS 1%
Other 4%
Distribution of Enrollment in Medicare Private Plans,
by Plan Type, 2016
50% of all Medicare beneficiaries in the U.S. had incomes below $24,150 (207% of the Federal Poverty Level)2
… the opportunity remains large
Medicare Revenue
18 Million1
Number of Americans enrolled in Medicare
Advantage.
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AET/HUM Medicare Advantage proposed acquisition by Molina
Divestitures announced by AET/HUM on August 2, 2016
Diversification
Enhance margin profile
Consistent with our focus on government
contracts
Immediate significant scale in Medicare
Advantage business (290,000 members)
Expected to improve overall quality scores
Transaction timelines extended
AET/HUM extended to February 15, 2017
Molina/AET/HUM agreements extended
to August 31, 2017
Delaware
Pro Forma Health Plan Footprint
Existing Molina states
AET/HUM states
Overlap states
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Direct delivery
Why provide services directly?
Dedicated network of providers
Provides additional primary care capacity
Greater control on quality and outcomes
Nurtures patient loyalty
Brand awareness & community engagement
Company owned and
operated primary care
community clinics.
Medical Services
Primary Care
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Direct delivery
A few of the services Molina Clinics provide include:
Pediatric, internal and family medicine
Immunizations and flu shots
Physical exams and health screenings
Acute care
Onsite childcare services
Interpretation and translation
Company owned and
operated primary care
community clinics.
Medical Services
Primary Care
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Direct delivery behavioral/mental health
Pathways, a multi-state, behavioral/mental health and social services provider
Operations in 23 states + DC
Medicaid focus
Over 5,600 client facing employees
Puerto Rico
USVI
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Molina Medicaid Solutions
West Virginia CMS Certification
Received full federal certification
October, 2016
Allows West Virginia to receive the
maximum federal funding available
CMS cited West Virginia for successfully
implementing a Medicaid
Management Information System on
schedule and on budget
The US Virgin Islands leverages West
Virginia's MMIS system
Puerto Rico
USVI
Molina Medicaid Solutions Footprint
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Marketplace
Skills developed are transferable to other health plan products
1. Company’s enrollment estimate as of January 2017
15K
205K
568K
700K
2014A 2015A 3Q2016 Jan 2017
Historical Marketplace Enrollment Growth
Uncertainty due to the risk transfer
methodology
Accounting estimates create uncertainty
Risk transfer methodology penalizes low
cost health plans
Challenges Continue
1
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Medicaid quality rankings
1. http://healthinsuranceratings.ncqa.org/2016/Default.aspx
* = Accreditation in process
2016 – 2017 NCQA Overall Quality Rankings1
MI, UT
NM, OH, TX, WA
CA, FL, SC, WI
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2017 Medicare Star ratings
Low-income beneficiaries face unique challenges to achieving high star ratings1
1. http://healthaffairs.org/blog/2014/09/22/medicare-advantage-stars-systems-disproportionate-impact-on-ma-plans-focusing-on-low-income-populations/
NM
CA
FL, TX, UT, WA
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One of a kind
Adding capabilities that can impact social determinants of health care
Focused on people receiving government assistance
Scalable administrative infrastructure
Consistent national brand
Experienced management team
Mission driven culture