Molina Healthcare beats profit estimates aided by higher premiums

April 24 (Reuters) - Molina Healthcare beat Wall Street estimates for first-quarter earnings on Wednesday, aided by higher premiums in its government-backed Medicaid insurance plans for people with low income.

The company also reaffirmed its 2024 outlook, with premium revenue of about $38 billion and adjusted earnings of at least $23.50 per diluted share. Wall Street analysts expect full-year earnings of $23.56 per share.

Molina's quarterly medical cost ratio, the percentage of premiums paid out for medical services, was 88.5%, above LSEG estimates of 88.2%.

The California-based health insurer's main business is Medicaid insurance, a joint federal and state government-run insurance program for low-income people.

Molina served about 5.7 million people through its Medicaid plans as of March 31, an increase of 9% compared to previous year.

The remaining members are enrolled in Medicare plans that Molina offers. Government-backed Medicare program helps cover medical costs for people aged 65 and older, or those with certain disabilities.

The company's Medicaid membership rose to 5.1 million in the reported quarter, and Medicare membership rose to 258,000.

Earlier this month, rivals Centene, Elevance and Humana were awarded Medicaid contracts by the state of Florida which will be valid for six years.

The contract loss is expected to hit Medicaid-reliant companies such as Molina.

The company posted adjusted profit of $5.73 per share for the quarter ended March 31, while analysts were expecting $5.59 per share.

Molina's revenue from premiums came in at $9.5 billion for the quarter, compared with analysts' expectation of $9.2 billion. (Reporting by Unnamalai L in Bengaluru; Editing by Shilpi Majumdar and Shailesh Kuber)