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S&P lowers Molina Healthcare
S&P said it lowered its long-term issuer credit and senior unsecured debt ratings on Molina Healthcare Inc. to BB- from BB.
The outlook is stable.
The agency said the downgrade reflects Molina's diminishing geographic footprint and top line revenue in its Medicaid segment based on its losing bids to retain two of its significant Medicaid contracts in New Mexico and Florida. The company was invited to participate in only one of 11 counties in Florida.
The downgrade also reflects a view that Molina faces operational challenges building out its care-management model to reduce its overall medical loss ratios in certain markets to improve its earnings in 2018-2019, as well as other operational challenges to turn around its earnings trajectory, S&P said.
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