Molina sinks on weak 2026 profit outlook as Medicaid medical costs jump

What happened

Molina Healthcare ($MOH) shares fell more than 28% after the company forecast 2026 adjusted EPS of at least $5.00, far below Wall Street’s ~$13.76 estimate, citing rising medical costs across its government-backed plans (especially Medicaid).

Molina also said it will exit Medicare Advantage prescription drug plans (Part D) in 2027 due to underperformance, and management called 2026 a “trough year” for Medicaid margins because rates are not keeping up with medical cost trends.

Why the market cares

1. It’s a Medicaid pricing warning: If state reimbursement rates lag actual medical-cost trend, margins can compress quickly for government managed care insurers.

2. It can spill over to peers: The forecast “dragged” se ...