Shares of Molina Healthcare Inc. on Friday recovered much of the previous day’s losses after the Medicaid managed care company said it had won its appeal to continue as a carrier in Ohio, one of its largest markets.
The Long Beach company’s stock price had plunged 31 percent on Thursday after the company withdrew its full-year earnings forecast because costs in its large Texas market were exceeding premiums.
But Molina announced late Thursday said that the Ohio Department of Job and Family Service had upheld the company's protest of losing its contract with the state to Aetna Inc. and a smaller carrier starting next year.
Ohio, which wants to streamline its Medicaid programs to save money, announced in April that it had chosen Aetna to administer its Medicaid program, which is financed jointly by the state and federal government. Molina and another carrier, Centene Corp., successfully challenged the scoring criteria used to evaluate each company’s application.
“We commend (the department) for its decision, and we look forward to continuing our strong partnerships with the state, our providers, and community-based organizations to provide high-quality health care services for some of Ohio’s most vulnerable citizens,” said Chief Executive J. Mario Molina in a statement.
Shares on Friday closed up $4.69, or 26.4 percent, to $22.46 on the New York Stock Exchange.