Molina Healthcare Inc. (NYSE: MOH) and Centene Corporation (NYSE: CNC) are both seeing their shares take a real beating. On a day where most stocks are lower because of Friday’s payrolls data, this is something entirely different.
The Ohio Department of Jobs and Family Services has reportedly not selected Molina’s Ohio health plan to participate in a freshly issued Ohio Medicaid Managed Care Plan Request for application. Molina’s filing disclosed the apparent contract loss and it appears as of now that the existing contract that Molina has with Ohio will expire at the end of 2012 without being renewed. Molina shares are down 22% at $27.15 against a 52-week range of $13.93 to $36.83. Centene is also listed as one of the losers here and its shares are down 12.6% at $44.41 against a 52-week range of $25.28 to $50.40.
The Wall Street Journal also noted that AMERIGROUP Corporation (NYSE: AGP) and WellCare Health Plans, Inc. (NYSE: WCG) are not being awarded new contracts in Ohio but that Centene was planning an effort to appeal the decision that would impact 9% of the 1.8 million members. WellCare is down 6.6% at $69.35 against a 52-week range of $33.29 to $74.41. AMERIGROUP shares are down the least with a drop of 4.7% at $64.22 against a 52-week range of $37.57 to $75.74.
These individual state contract losses are not always set in stone due to appeals and due to lobbying efforts. That being said, you can clearly see here how state contract awards and losses allow many companies to live by the sword and die by the sword.
JON C. OGG