How big is regulatory tail risk for Medicaid?

In this episode of Yet Another Value Podcast, host Andrew Walker welcomes back Steve Gorelik from Firebird Management for a deep dive into Molina Healthcare (ticker: MOH). Together, they explore the sharp drop in Molina's stock despite its long-standing compounder reputation. Steve outlines how Molina operates as a low-cost Medicaid-focused managed care organization, making it uniquely resilient amid rising medical costs and regulatory challenges. They discuss Molina’s competitive advantages, risks tied to healthcare policy, redetermination effects, and its strategic M&A playbook. Tune in to understand why Steve believes Molina remains undervalued and poised to outperform its peers—even as the broader Medicaid sector stumbles.

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[00:00:00] Intro and sponsor mention

[00:02:25] What is Molina Healthcare?

[00:05:31] Medicaid model and revenue growth

[00:06:25] Molina stock chart and July crash

[00:07:13] Industry-wide margin compression

[00:11:28] Why Steve sees alpha in Molina

[00:13:29] ROE vs. cost structure explained

[00:15:04] Admin efficiency as competitive edge

[00:17:04] Molina’s playbook and cost culture

[00:20:16] Medicaid redetermination impact

[00:24:07] Market share gains amid member losses

[00:26:26] What's driving cost inflation now

[00:28:44] Will premiums rise to match costs?

[00:30:26] Regulatory risks in Medicaid

[00:32:19] Medicaid vs. private cost efficiency

[00:33:54] Denials, approvals, and outcomes

[00:37:50] Molina’s denials as cost control

[00:40:42] Tender process and doctor networks

[00:41:43] What keeps Steve up at night

[00:44:41] Acquisitions: model and pipeline

[00:47:18] M&A parallels to John Malone

[00:48:19] CEO incentives and share ownership

[00:50:48] Share buybacks and capital returns

[00:51:19] Could Molina be acquired?

[00:52:57] Long-term compounding vs. exit

[00:53:28] Scooby-Doo investing explained

[00:54:23] Wrapping up the conversation

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