Molina Healthcare ended September with 4,372,000 Medicaid members, down from 4,568,000 at the end of 2025. In its third-quarter results, released October 21, the insurer said nothing about the federal work rule, but on the earnings call its executives told analysts that coverage losses tied to the rule will start showing up in 2027. For the millions of adults who get coverage through a managed-care plan like Molina’s, the date that matters is January 1.
How far Molina’s Medicaid enrollment has slipped
Medicaid is still the bulk of the company. Molina’s Q3 membership table shows 4,372,000 Medicaid members on September 30, against 4,568,000 on December 31, 2025 and 4,639,000 a year earlier on September 30, 2025. Total membership across all lines stood at 4,862,000, versus 5,491,000 at the end of last year.
The shrinkage did not stop Medicaid premium revenue from rising. Molina booked $8,199 million of Medicaid premiums in the quarter, up from $8,015 million in the third quarter of 2025, because state rate increases outran the loss of members. Those rate updates are the company’s main argument that the business is stabilizing.
Margins tell a harder story. The Medicaid medical care ratio, the share of premium dollars spent on members’ care, rose to 93.0% from 92.0% a year earlier. Medical margin in the segment fell to $577 million from $639 million, which is why Molina’s total Q3 profit came in well below last year’s.
What Molina told analysts about the work rule
The federal requirement comes from the 2025 budget law and is spelled out in a rule CMS issued on June 1. It applies to non-pregnant adults 19 to 64 in the Medicaid expansion group, who must show 80 hours a month of work, community service, a work program or half-time schooling. States generally have to put it in place no later than January 1, 2027. Adults in that age range on expansion Medicaid should expect their state or plan to ask for proof.
Retirement deadlines, in your inbox: Miss an enrollment or claim deadline and the money can be gone. The Retirement Money Brief keeps you ahead of the ones that matter, every weekday.
Get the Retirement Money Brief →
We may earn a commission from links on this page.
Molina’s finance chief, Mark Keim, put a number on it during the October call. The company is assuming a 6% decline in Medicaid membership in 2027, which he described as his initial pick for the first year. He estimated that cumulative losses could reach roughly 9% to 10% over several years, with some of the impact spilling into 2028 or 2029.
CEO Joseph Zubretsky described the pace as gradual. “We continue to expect membership reductions to emerge gradually and to produce a minor acuity impact,” he said. A phased approach in some states, he added, will push part of the disenrollments into 2028.
Molina also reported that six states with January 1 rate years have already written explicit adjustments for work-requirement and redetermination effects into their payments to the plan. In other words, the states paying Molina are treating enrollment losses as a planning assumption rather than a surprise.
Nebraska offers an early look at the exemptions
Keim pointed to Nebraska as the closest real-world test. About 90% of members up for renewal there were re-enrolled, he said, and 20% of those relied on medical frailty exemptions, a share he called higher than the company expected. That suggests the exemption categories, not just hours worked, will decide many cases.
The federal list of exemptions is long. CMS lists former foster care youth, American Indians and Alaska Natives, parents and caregivers of a child 13 or younger or of a disabled person, veterans with a total disability rating, people who are medically frail, people in addiction treatment, and anyone already meeting TANF or SNAP work rules. Anyone enrolled in Medicare falls outside the rule.
Proof is the sticking point. Under the federal rule, a new applicant must have met the requirement for at least one month before applying, and current members must show it between renewals. If a state cannot verify hours on its own, it sends a notice and gives the member 30 calendar days to respond, and New Jersey says most affected members there will also renew every six months instead of every 12.
The practical risk is paperwork, not eligibility. A member who qualifies for an exemption, or who works enough hours, can still lose coverage if a notice goes to an old address or a pay stub never reaches the state. Molina’s own projection of a 6% first-year drop reflects that kind of administrative loss as much as people who truly fall outside the rule.
Rate increases, Florida and the 2027 outlook
Zubretsky said recent rate updates for 2027 are a reason he believes Molina is “likely observing the beginning of the turn in Medicaid margins.” On the call, Keim laid out Medicaid assumptions of rate increases of about 6% against medical cost trend of 5.5% to 6%. Each 100 basis points of Medicaid margin, he said, is worth about $5 a share.
The company reaffirmed full-year 2026 guidance of about $42 billion in premium revenue and adjusted earnings of at least $5.25 a share. That figure includes a $1.50 a share loss from the Florida Medicaid contract, which begins in the fourth quarter and covers about 115,000 members at a premium run rate near $6 billion a year.
For 2027, management is pointing to premium revenue of at least $45 billion, down from an earlier $46.5 billion, after Georgia and Texas contract starts slipped and removed $1.3 billion. Updated guidance is due in February, which is also when Molina will have a clearer read on how many members the work rule is actually removing.
Members of any Medicaid plan should treat the January date as a hard one. The federal rule leaves states room on timing and process, so the notice that matters most is the one from the state Medicaid agency or the plan. Which hours count, and which exemption covers a particular household, will be answered state by state before the first renewal under the new rule.
Will your Medicaid renewal ask for proof of work hours?
Molina is planning for a 6% drop in Medicaid members in 2027, and the people most likely to fall off are not those who fail the rule but those who miss a notice or cannot document an exemption. A renewal packet that arrives with a 30-day clock leaves little room to hunt for pay stubs or a doctor’s letter.
The SNAP & Medicaid Renewal Organizer walks through the new Medicaid work requirement and who is exempt, with a renewal document checklist and a renewal and reporting calendar. It also covers the 90-day window after coverage is dropped, so a missed deadline has a next step.
Get the renewal checklist and calendar in the Medicaid organizer →
More Financial Reading
- 21 Ways to Stretch a $2,087 Social Security Check
- 15 Places to Find Your Share of the $4.25 Billion States Give Back
- 15 Ways Out of 22% Credit Card Interest
This article was produced with AI assistance and edited for accuracy against the sources linked above.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
