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notified its employees in May and will close June 30, according to a notice filed with the state鈥檚 workforce department. The state鈥檚 Department of Medical Assistance Services opted not to award the California-based company a new contract starting July 1.

The state contracts with private health companies to manage the needs of Medicaid members. In 2023, Virginia sought new bids for its $13 billion-a-year Medicaid Managed Care contract. The state felt that because of how the program had changed, including an emphasis on mental health, it needed to issue a new procurement, said Lanette Walker, a deputy secretary of Health and Human Services.

Four current companies received new contracts to begin July 1 鈥� Anthem, Aetna, Sentara and United. In place of Molina, the state chose Humana.

Molina members will be enrolled in the Humana Healthy Horizons of Virginia program but have until Sept. 30 to switch. After Molina learned it had not received a new contract, it protested the decision, a common strategy when managers鈥� contracts are not renewed. The company ceased protesting earlier this year.

Molina was the smallest of the state鈥檚 five managers, representing about 7% of the nearly 2 million Virginia residents on Medicaid. The work to win and keep a Medicaid contract is difficult, and companies need a certain size and ability to perform, said Doug Gray, executive director at the Virginia Association of Health Plans.

State leaders 鈥渁sk for more for their dollar鈥� each time they issue a new procurement, he added. Companies are then 鈥渢rying to hit the highest and best performance that they can.鈥�

Humana could hire some Molina employees, but by the time Molina ended its protest, Humana likely filled most of its open positions, Gray said. Humana is not a major provider of Medicaid nationwide 鈥� it is known better for its Medicare Advantage plans. But Virginia leaders have expressed optimism that Humana will streamline health care for patients who receive both Medicare and Medicaid.

Virginia鈥檚 five Medicaid managers lost a combined $580 million in the first half of the 2025 fiscal year, according to a state report. Last year, the state disenrolled almost 500,000 people who no longer met the financial qualification to receive Medicaid. The patients who remained tended to be sicker, needing more care and racking up higher bills than the state expected, Gray said. The state has adjusted rates higher for the coming year, but it may not be enough for managers to turn a profit immediately.

Molina was the only company of the five to post a profit during the first half of the 2025 fiscal year, which Gray attributed to its small patient population.