Molina Healthcare, Inc. and Centene Corp. Shares Drop as Ohio Decides to Change Insurers
Marketwire
Apr 11, 2012
NEW YORK, NY -- (Marketwire) -- 04/11/12 -- Companies dependent on Medicaid funding dropped significantly Monday as the state of Ohio decided to change insurers. Ohio has decided not to renew the contracts of Medicaid pure-plays Amerigroup, Centene, Molina Healthcare, and WellCare. The Paragon Report examines investing opportunities in the Health Care Industry and provides equity research on Molina Healthcare, Inc. (NYSE: MOH) and Centene Corp. (NYSE: CNC).
"Ouch," said Carl McDonald, analyst with Citigroup Inc. "This is unwelcome news for all of the Medicaid plans, but it is particularly problematic for Molina, since Ohio was the company's most important state." McDonald has called Ohio's decision "pretty rare" and doesn't expect other states to follow suit. "It probably doesn't have much implication," he said. "No two states ever seem to be looking for exactly the same thing, and we've found it virtually impossible to accurately predict the Medicaid plans that will win a particular request for proposal."
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Molina Healthcare, Inc. announced that it will report its earnings for the first quarter ended March 31, 2012, after the market closes on Monday, April 30, 2012. The Company's management will host a conference call and webcast to discuss the earnings release at 5:00 p.m. Eastern time on the same day.
Centene Corporation was notified by the Ohio Department of Job and Family Services (ODJFS) that Buckeye Community Health Plan, Centene's Ohio subsidiary, was one of four incumbent health plans that was not awarded a contract to continue serving Medicaid members in Ohio, effective January 2013. Centene intends to file a formal protest within the required seven-day notice period.
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