Molina Healthcare on Thursday forecast 2026 profit far below Wall Street expectations and said it would exit its traditional Medicare Advantage Part D plans in 2027, triggering a nearly 34% slide in its shares in aftermarket trading.
Shares of other health insurers also fell in extended trading, with Centene down 11.77%, UnitedHealth down 3.16%; and Elevance Health down 1.66%.
The Long Beach, California-based insurer projected adjusted earnings of at least $5 per share for 2026, sharply under analysts' estimate of $13.76, according to LSEG data.
Health insurers have been grappling with persistently high medical expenses as demand for behavioral health services and specialty drugs across government-backed healthcare plans pushed up costs over the last two years.
Molina said the annual profit forecast was burdened by $2.50 per diluted share, which includes $1.50 per diluted share due to the implementation of the new Florida CMS Medicaid contract , and $1 per diluted share due to underperformance in the traditional Medicare Advantage Part D product.
Medicare Part D is the prescription drug benefit that helps Medicare enrollees pay for outpatient medications through approved private plans.
"We believe that the imbalance between rates and trend marks 2026 as a trough year for Medicaid industry margins. Even at this low point in the cycle, we continue to produce positive pre-tax margins in Medicaid," CEO Joseph Zubretsky said.
The company expects premium revenue of about $42.2 billion in 2026, nearly 2% lower than 2025 and below analysts' expectation of $45.46 billion.
Molina expects its annual medical cost ratio, the percentage of premiums spent on medical services, to be 92.6% compared to an estimate of 89.78%.
Total 2026 revenue is expected to reach $44.5 billion, also below the estimate of $46.55 billion.
For the fourth quarter ended December 31, Molina reported an adjusted loss of $2.75 per share, missing analysts' estimate of a profit of 33 cents per share .
Its medical cost ratio for the quarter was 94.6%, compared with its estimate of 92.12%. The company's reported 2025 medical cost ratio was 91.7%, below the estimate of 90.4%.