Molina Healthcare told investors on Feb. 5 that it will pull out of the individual Medicare Advantage business entirely for the 2027 plan year, ending the prescription-drug-covered plans that roughly 99,100 people currently carry. The insurer said the product no longer fits its strategy and that it will instead concentrate its Medicare business on plans built for people who qualify for both Medicare and Medicaid. Current coverage stays in force through the end of 2026, but affected members will need to choose new coverage before Molina’s plans disappear from the market. The exit landed alongside a rocky earnings report that erased more than a quarter of the company’s stock value in a single morning.
The 99,100 Members Molina Is Leaving Behind
Molina built its individual Medicare Advantage book largely through acquisitions rather than growing it organically, and executives framed the exit as a return to what the company does best. Molina remains primarily a Medicaid managed-care contractor, with Medicaid accounting for roughly two-thirds of the $43.1 billion in premium revenue it collected last year, and leadership has said it wants to redirect capital toward Medicaid acquisitions rather than continue propping up a Medicare Advantage line it entered largely through deals. Starting with plans sold for 2027, Molina will no longer offer that individual product in any of its markets, keeping only its dual-eligible plans for people who qualify for both Medicare and Medicaid.
The book covered about 99,100 people as of Dec. 1, according to CMS enrollment data cited in a Word & Brown analysis of the exit. The company had paid $350 million to buy ConnectiCare and $425 million to NeueHealth, formerly known as Bright Health Group, for Medicare Advantage plans in California, the same analysis found.
The same analysis quoted several industry consultants who described the exit as part of a wider squeeze rather than a Molina-specific stumble. “Plans are making really tough decisions in order to stay around. We know that these market exits are going to continue to happen,” said Jessica Muratore of Muratore Advisory Services, noting the move came a week after federal regulators proposed a minuscule 2027 payment increase paired with a tighter risk-adjustment system. Katherine Hempstead of the Robert Wood Johnson Foundation added that smaller insurers, lacking the scale of the largest national carriers, are the ones most likely to simply walk away from Medicare Advantage rather than keep absorbing the losses. Consultant Ari Gottlieb was blunter about the acquired California and Connecticut business specifically: “This is throwing the towel in on some acquired business. They’ve gotten outside of their competency, and we’re seeing the results of this.”
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A Billion-Dollar Business That Missed Its Numbers
The individual Medicare Advantage and drug-plan business generated about $1 billion in premium revenue in 2025, Molina disclosed alongside its fourth-quarter results, but underperformance in the segment is expected to cost the company roughly $1.00 per diluted share in 2026, according to the earnings coverage in Becker’s Payer Issues. Medicare’s medical loss ratio, the share of premium dollars spent on patient care rather than overhead or profit, ran 92.4% for the year, higher than the company’s 91.7% average across all of its business lines, driven by heavier-than-expected use of care among Medicare enrollees. The company’s Affordable Care Act marketplace plans fared little better, with a loss ratio of 90.6%, sharply up from 75.4% the year before.
For the full year, Molina reported $45.4 billion in total revenue, up 12% from 2024, but net income of $472 million, down 60% from $1.2 billion the year before. Adjusted earnings of $11.03 per diluted share were down 51% year over year, a slide the company attributed to rising medical costs across Medicare, Medicaid and its Affordable Care Act marketplace plans alike. Looking ahead, Molina guided to about $42 billion in 2026 premium revenue, a roughly 2% decline, and adjusted earnings of at least $5.00 per diluted share, a figure the company said is weighed down by a combined $2.50 per share from a new Florida Medicaid contract and the departing Medicare Advantage business.
Wall Street's Reaction and the CEO's Explanation
Shares of Molina fell about 28% within the first half hour of trading the morning the news broke, after the company reported a fourth-quarter loss of $160 million, compared with a $251 million profit in the same quarter of 2024, according to Fierce Healthcare’s account of the earnings call. “We have determined that the MAPD product does not align with our strategic shift to focus exclusively on dual-eligible members in Medicare, and we will exit the traditional MAPD product for 2027,” CEO Joseph Zubretsky told analysts.
Zubretsky said the company would instead look for acquisitions that add Medicaid revenue, calling the current market “a catalyst for many smaller and less diverse health plans to consider their strategic options” — language that points toward more consolidation among the insurers that sell Medicare Advantage, not less.
What the 99,100 Affected Members Should Expect
Members enrolled in a Molina individual Medicare Advantage plan keep their current coverage through the end of 2026 and do not need to take any action right now, according to guidance Molina issued to its agent network and summarized by the insurance broker publication Agility. But once Molina’s individual plans are no longer offered for 2027, Medicare’s standard rule for a plan that is not renewed applies: a member who does not actively choose a new Medicare Advantage or Part D plan is automatically moved back into Original Medicare, according to Medicare’s own enrollment guidance, which also sets the Annual Enrollment Period for switching plans as Oct. 15 through Dec. 7 each year.
That default carries real consequences for anyone who wants to keep drug coverage or extra benefits Molina had bundled in, since Original Medicare alone does not include prescription drug coverage. The distinction between staying enrolled in some Medicare plan and drifting into Original Medicare by default is the one Medicare’s own guidance draws most sharply for people whose current plan is leaving the market.
The Programs Behind a Lost Plan
The reshuffling among Medicare Advantage insurers puts fresh attention on the plan-choice decisions members now face, but it says nothing about a separate set of programs that lower what a beneficiary pays no matter which plan is chosen next. Medicare Savings Programs can cover the Part B premium for people with modest incomes, Extra Help lowers Part D drug costs, and many states run their own drug-cost assistance on top of that. All three require a separate application, are opt-in, and no notice arrives inviting someone in the middle of a plan transition to sign up.
The Benefits Checklist runs 69 pages across eleven programs, with the 2026 income cutoffs and the state-by-state phone numbers, and a printable tracker comes with the download.
Open The Benefits Checklist for the full list and the state-by-state phone numbers.
AI tools assisted in researching and drafting this article, which was reviewed prior to publication.
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.
