Exhibit 99.1

News Release

Contact:

Juan José Orellana

Investor Relations

562-435-3666, ext. 111143

MOLINA HEALTHCARE REPORTS

SECOND QUARTER 2010 RESULTS

● Quarterly premium revenues of $977 million, up 6% over 2009

● Quarterly operating income of $21 million, up 9% over 2009

● Earnings per diluted share for second quarter 2010 of $0.41

● Quarterly cash provided by operating activities of $52 million

● Includes May and June results for Molina Medicaid Solutions

● 130,000 new members enrolled since the second quarter 2009

Long Beach, California (August 4, 2010) – Molina Healthcare, Inc. (NYSE: MOH) today reported its financial results for the second quarter and six months ended June 30, 2010.

Net income for the quarter was $10.6 million, or $0.41 per diluted share, compared with net income of $14.6 million, or $0.56 per diluted share, for the quarter ended June 30, 2009.

“Our second quarter results reflect improvement across our business despite a very difficult premium rate environment.  Although a few states have provided rate increases, most states remain burdened by their budget shortfalls.  Our diversified revenue growth, increasing scale, and disciplined cost management have contributed to our success in the quarter,” said J. Mario Molina, M.D., chief executive officer of Molina Healthcare, Inc.  “Through the first half of the year, we have made progress in strengthening our core operations while continuing to build a strong portfolio in the industry.  As a result, our earnings today reflect the benefits of lower medical costs and our expanded offering in the Medicaid management information systems space.”

Overview of Financial Results

Second Quarter 2010 Compared with First Quarter 2010

Net income for the second quarter of 2010 was consistent with the first quarter of 2010 as $5.0 million in operating income earned by the Molina Medicaid Solutions segment was offset by the following factors:

● $5.5 million in premium reductions retroactive to October 1, 2009, that were imposed by the state of Michigan;

● $1.7 million in acquisition costs related to the purchase of Molina Medicaid Solutions; and

● $0.6 million in incremental interest costs incurred to finance the acquisition.

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MOH Reports Second Quarter 2010 Results

Page 2

August 4, 2010

Health Plans

Second Quarter 2010 Compared with Second Quarter 2009

Premium revenue grew 6% in the second quarter of 2010 compared with the second quarter of 2009 due to a membership increase of nearly 10% as of June 30, 2010, compared with membership as of June 30, 2009.  Premium revenue was reduced during the second quarter of 2010 by $5.5 million due to rate reductions in Michigan that were retroactive to October 1, 2009.  The related reduction to medical expense was only $0.5 million.  On a PMPM basis, consolidated premium revenue decreased 4% because of declines in premium rates at several of the Company’s health plans.  The most significant declines in premium rates were in Ohio and Missouri, due to the transfer of pharmacy risk back to the states, and in Washington.  Washington premiums PMPM were lower during the second quarter of 2010 compared with second quarter of 2009 as result of reductions made to both Medicaid premiums and fee schedules during the third quarter of 2009.  Medicare enrollment exceeded 20,000 members at June 30, 2010, and Medicare premium revenue for the quarter was $67.6 million compared with $35.2 million in the second quarter of 2009.

Medical care costs, in the aggregate, decreased 5% on a PMPM basis in the second quarter of 2010 compared with the second quarter of 2009, primarily due to the following:

● The transfer of pharmacy risk back to the states of Ohio and Missouri;

● A less severe flu season in 2010;

● Reductions in Medicaid fee schedules subsequent to June 30, 2009; and

● The implementation of various contracting and medical management initiatives.

Excluding pharmacy costs, medical care costs decreased 2% on a PMPM basis in the second quarter of 2010 compared with the second quarter of 2009.  Medical care costs as a percentage of premium revenue (the medical care ratio) were 86.0% for the second quarter of 2010 compared with 86.8% for the second quarter of 2009.

Physician and outpatient costs increased 2% on a PMPM basis compared with the second quarter of 2009.  Although the Company continued to observe hospitals billing for more intensive levels of care for the second quarter of 2010 compared with the second quarter of 2009, emergency room costs PMPM were stable as both utilization and cost per visit remained essentially unchanged.  The Company attributes stable emergency room costs to, among other things, a less severe flu season when compared with 2009, changes in provider contracts and fee schedules, and its efforts to reduce inappropriate utilization.

Inpatient facility costs increased 6% on a PMPM basis compared with the second quarter of 2009.  Both utilization and unit costs increased slightly compared with the second quarter of 2009.

Pharmacy costs (including the benefit of rebates) decreased 31% on a PMPM basis for the second quarter of 2010, including the Company’s Missouri and Ohio health plans.  The pharmacy benefit was transferred to the state of Missouri effective October 1, 2009, and was transferred to the state of Ohio effective February 1, 2010.  Excluding these health plans, pharmacy costs increased 6% on a PMPM basis compared with the second quarter of 2009 as a result of increases in unit costs that more than offset decreases in utilization.

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MOH Reports Second Quarter 2010 Results

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August 4, 2010

Capitated costs decreased 20% on a PMPM basis compared with the second quarter of 2009 as a result of the recognition, in the second quarter of 2009, of $22 million in retroactive capitation expense at the New Mexico health plan that related to 2009 and 2008.  The retroactive capitation expense at the New Mexico health plan was directly related to the receipt of $25.3 million in retroactive premium revenue in the second quarter of 2009.  There was no corresponding retroactive adjustment in the second quarter of 2010.

Days in medical claims and benefits payable – Beginning January 1, 2010, and for all prior periods presented, the Company is reporting days in medical claims and benefits payable relating to fee-for-service medical claims only.  This new computation includes only fee-for-service medical care costs and related liabilities and, therefore, calculates the extent of reserves for those liabilities that are most subject to estimation risk.

The days in medical claims and benefits payable amount previously reported included all medical care costs (fee-for-service, capitation, pharmacy, and administrative), and all medical claims liabilities, including those liabilities that are typically paid concurrently, or shortly after the costs are incurred, such as capitation cost and pharmacy costs.  Medical claims liabilities used in this calculation do not include accrued costs – such as salaries – associated with the administrative portion of medical costs.

By including only fee-for-service medical costs and liabilities in this computation, the Company’s days in claims payable metric will be more indicative of the adequacy of the Company’s reserves for liabilities subject to a substantial degree of estimation.  The days in medical claims and benefits payable computed under each method were as follows:

(dollars in thousands)	June 30, 2010		March 31, 2010		June 30, 2009
Days in claims payable – fee-for-service only	44 days		44 days		47 days
Days in claims payable – all medical costs	39 days		37 days		39 days
Number of claims in inventory at end of period		106,300		153,700		117,100
Billed charges of claims in inventory at end of period	$	146,600	$	194,000	$	173,400

Molina Medicaid Solutions (acquired May 1, 2010)

Molina Medicaid Solutions contributed$5.0 million to operating income during the second quarter of 2010, resulting in an operating profit margin of approximately 24%.  The Company expects the operating profit for this segment to decline once the contracts in Idaho and Maine enter the operations stage and costs currently deferred for those contracts begin to amortize.

Performance of Molina Medicaid Solutions for the two months ended June 30, 2010, was as follows:

	(In thousands)
Service revenue	$	22,645
Amortization of purchased intangibles recorded as contra-service revenue		(1,591	)
Net service revenue		21,054
Cost of service revenue		14,254
General and administrative costs		966
Amortization of purchased intangibles recorded as amortization expense		829
Operating income	$	5,005

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MOH Reports Second Quarter 2010 Results

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August 4, 2010

Consolidated Expenses

General and administrative expenses, or G&A, were $78.1 million, or 7.8% of total revenue, for the second quarter of 2010 compared with $65.0 million, or 7.0% of total revenue, for the second quarter of 2009.  The increase in the G&A ratio was the result of higher administrative expenses for the Health Plan segment, driven in part by the cost of the Company’s Medicare expansion and the acquisition of Molina Medicaid Solutions.

	Three Months Ended June 30,
	2010					2009
	Amount		% of Total Revenue			Amount		% of Total Revenue
	(Dollar amounts in millions)
Medicare-related administrative costs	$	6.6		0.7	%	$	3.9		0.4	%
Non Medicare-related administrative costs:
Molina Medicaid Solutions segment administrative costs		1.0		0.1			–		–
Molina Medicaid Solutions acquisition costs		1.7		0.2			–		–
Health Plans segment administrative payroll, including employee incentive compensation		53.7		5.4			49.3		5.3
All other Health Plans segment administrative expense		15.1		1.4			11.8		1.3
	$	78.1		7.8	%	$	65.0		7.0	%

Premium tax expense increased to 3.6% of premium revenue in the second quarter of 2010 from 3.3% in the second quarter of 2009, primarily due to the imposition of a higher premium tax rate in Ohio effective October 1, 2009.

Depreciation and amortization expense specifically identified as such in the Company’s consolidated statements of income increased $1.6 million in the second quarter of 2010 compared with the second quarter of 2009, primarily due to depreciation of investments in infrastructure and the amortization of certain purchased intangibles associated with the acquisition of Molina Medicaid Solutions.  Beginning in the second quarter of 2010, the amortization of a portion of the purchased intangibles associated with the acquisition of Molina Medicaid Solutions is recorded as contra-service revenue, rather than as part of depreciation and amortization expense.  Additionally, most of the depreciation expense associated with Molina Medicaid Solutions is recorded as cost of service revenue.  The following table presents all depreciation and amortization expense recorded in the Company’s consolidated financial statements:

	Three Months Ended June 30,
	2010					2009
	Amount		% of Total Revenue			Amount		% of Total Revenue
	(Dollar amounts in millions)
Depreciation and amortization	$	11.2		1.1	%	$	9.6		1.0	%
Amortization expense recorded as contra-service revenue		1.6		0.2			–		–
Depreciation expense recorded as cost of service revenue		1.0		0.1			–		–
Depreciation and amortization reported in the condensed consolidated statements of cash flows	$	13.8		1.4	%	$	9.6		1.0	%

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MOH Reports Second Quarter 2010 Results

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August 4, 2010

Interest expense increased to $4.1 million for the second quarter of 2010 compared with $3.2 million for the second quarter of 2009.  The Company incurred higher interest expense relating to the $105 million draw on its credit facility (beginning May 1, 2010) to fund the acquisition.

Income tax expense was recorded at an effective rate of 38.1% in the second quarter of 2010 compared with 10.5% in the second quarter of 2009.  The lower rate in 2009 was primarily due to discrete tax benefits of $4.4 million recorded in the second quarter of 2009 as a result of settling tax examinations and the voluntary filing of certain accounting method changes.

Effective January 1, 2008 through December 31, 2009, the Company’s income tax expense included both the Michigan business income tax, or BIT, and the Michigan modified gross receipts tax, or MGRT.  Effective January 1, 2010, the Company has recorded the MGRT as a premium tax and not as an income tax.  The Company will continue to record the BIT as an income tax.  For the second quarter and first half of 2009, premium tax expense and income tax expense have been reclassified to conform to this presentation.

First Half of 2010 Compared with First Half of 2009

Health Plans

Premium revenue grew 9% between the first half of 2009 and the first half of 2010 due to a membership increase of nearly 10% as of June 30, 2010, compared with membership as of June 30, 2009.  Premium revenue was reduced during the first half of 2010 by $8.7 million due to rate reductions in Michigan that were retroactive to October 1, 2009.  The related reduction to medical expense was only $0.5 million.  On a PMPM basis, consolidated premium revenue decreased 3% because of declines in premium rates at several of the Company’s health plans.  The most significant declines in premium rates were in Ohio and Missouri, due to the transfer of pharmacy risk back to the states, and in Washington.  Washington premiums PMPM were lower during the first half of 2010 compared with the first half of 2009 as result of reductions made to both Medicaid premiums and fee schedules during the third quarter of 2009.  Medicare enrollment exceeded 20,000 members at June 30, 2010, and Medicare premium revenue for the first half of 2010 was $117.9 million compared with $62.2 million for the same period in 2009.

Medical care costs, in the aggregate, decreased 4% on a PMPM basis in the first half of 2010 compared with the first half of 2009, due to the same factors described for the decrease in medical care costs in the second quarter of 2010 compared with the second quarter of 2009.  Excluding pharmacy costs, medical care costs were flat in the first half of 2010 compared with the second half of 2009.  Medical care costs as a percentage of premium revenue (the medical care ratio) were 85.6% for the first half of 2010 compared with 86.4% for the first half of 2009.

Physician and outpatient costs increased 3% on a PMPM basis compared with the first half of 2009.  Although the Company continued to observe hospitals billing for more intensive levels of care for the first half of 2010 compared with the first half of 2009, emergency room costs PMPM were stable as both utilization and cost per visit remained essentially unchanged.  The Company attributes stable emergency room costs to, among other things, a less severe flu season when compared with 2009, changes in provider contracts and fee schedules, and its efforts to reduce inappropriate utilization.

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MOH Reports Second Quarter 2010 Results

Page 6

August 4, 2010

Inpatient facility costs increased 3% on a PMPM basis compared with the first half of 2009.  Both utilization and unit costs increased slightly compared with the first half of 2009.

Pharmacy costs (including the benefit of rebates) decreased 27% on a PMPM basis for the first half of 2010, including the Company’s Missouri and Ohio health plans.  The pharmacy benefit was transferred to the state of Missouri effective October 1, 2009, and was transferred to the state of Ohio effective February 1, 2010.  Excluding these health plans, pharmacy costs increased 4% on a PMPM basis compared with the first half of 2009 as a result of flat utilization and a moderate increase in unit costs.

Capitated costs decreased 10% on a PMPM basis compared with the first half of 2009, primarily as a result of the recognition of retroactive capitation expense in the second quarter of 2009, as described above.

Consolidated Expenses

General and administrative expenses were $157.0 million, or 8.0% of total revenue, for the first half of 2010 compared with $130.4 million, or 7.3% of total revenue, for the first half of 2009.  The increase in the G&A ratio was the result of higher administrative expenses for the Health Plan segment, driven in part by the cost of the Company’s Medicare expansion and the acquisition of Molina Medicaid Solutions.

	Six Months Ended June 30,
	2010					2009
	Amount		% of Total Revenue			Amount		% of Total Revenue
	(Dollar amounts in millions)
Medicare-related administrative costs	$	14.5		0.7	%	$	8.8		0.5	%
Non Medicare-related administrative costs:
Molina Medicaid Solutions segment administrative costs		1.0		0.1			–		–
Molina Medicaid Solutions acquisition costs		2.3		0.1			–		–
Health Plans segment administrative payroll, including employee incentive compensation		109.9		5.6			98.3		5.5
All other Health Plans segment administrative expense		29.3		1.5			23.3		1.3
	$	157.0		8.0	%	$	130.4		7.3	%

Premium tax expense increased to 3.6% of revenue in the first half of 2010 from 3.2% in the first half of 2009, primarily due to the imposition of a higher premium tax rate in Ohio effective October 1, 2009.

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MOH Reports Second Quarter 2010 Results

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August 4, 2010

Depreciation and amortization expense specifically identified as such in the Company’s consolidated statements of income increased $2.6 million in the first half of 2010 compared with the first half of 2009, primarily due to depreciation of  investments in infrastructure and the amortization of certain purchased intangibles associated with the acquisition of Molina Medicaid Solutions.  Beginning in the second quarter of 2010, a portion of amortization expense has been recorded as contra-service revenue, rather than as part of depreciation and amortization expense.  Additionally, most of the depreciation expense associated with Molina Medicaid Solutions is recorded as cost of service revenue.  The following table presents all depreciation and amortization expense recorded in the Company’s financial statements:

	Six Months Ended June 30,
	2010					2009
	Amount		% of Total Revenue			Amount		% of Total Revenue
	(Dollar amounts in millions)
Depreciation and amortization	$	21.3		1.1	%	$	18.6		1.0	%
Amortization expense recorded as contra-service revenue		1.6		0.1			–		–
Depreciation expense recorded as cost of service revenue		1.0		–			–		–
Depreciation and amortization reported in the condensed consolidated statements of cash flows	$	23.9		1.2	%	$	18.6		1.0	%

Interest expense increased to $7.5 million for the first half of 2010 compared with $6.6 million for the first half of 2009.  As described previously, the increase was due to additional interest expense relating to the $105 million draw on the Company’s credit facility to fund the acquisition of Molina Medicaid Solutions on May 1, 2010.

Income tax expense was recorded at an effective rate of 38.0% in the first half of 2010 compared with 25.6% in the first half of 2009.  The lower rate in 2009 was primarily due to discrete tax benefits of $4.4 million recorded in the second quarter of 2009 as a result of settling tax examinations and the voluntary filing of certain accounting method changes.

Cash Flow

Cash provided by operating activities for the first half of 2010 was $25 million compared with $95 million for the first half of 2009, a decrease of $70 million.  This decrease was primarily due to the timing of the Ohio health plan’s receipt of premium payments from the state of Ohio.  In 2009, the state of Ohio typically paid premiums in advance of the month the premium was earned.  Beginning in January 2010, the state of Ohio has delayed its premium payments to mid-month for the month premium is earned.  The Company does not anticipate any advance payments for the Ohio plan’s premiums during 2010.

Cash used in investing activities increased significantly in the first half of 2010 compared with the first half of 2009, due chiefly to the acquisition of Molina Medicaid Solutions, which totaled $131 million.  This acquisition was funded primarily by a $105 million draw on the Company’s credit facility.

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MOH Reports Second Quarter 2010 Results

Page 8

August 4, 2010

At June 30, 2010, the Company had cash and investments (not including restricted investments) of $673 million, including non-current auction rate securities with a fair value of $37 million.  At June 30, 2010, the parent company had unrestricted cash and investments of $47 million, including auction rate securities with a fair value of $8 million.

Investment income decreased to $3.1 million in the first half of 2010 compared with $5.6 million in the first half of 2009.  This decline was due primarily to lower interest rates.

EBITDA (1)

	Three Months Ended June 30,				Six Months Ended June 30,
	2010		2009		2010		2009
	(In millions)
Operating income	$	21.2	$	19.5	$	41.6	$	42.7
Add back:
Depreciation and amortization expense		11.2		9.6		21.3		18.6
Amortization expense recorded as contra-service revenue		1.6		–		1.6		–
Depreciation expense recorded as cost of service revenue		1.0		–		1.0		–
EBITDA	$	35.0	$	29.1	$	65.5	$	61.3

(1) The Company calculates EBITDA by adding back depreciation and amortization expense to operating income, including $1.6 million amortization expense recorded as contra-service revenue, and $1.0 million depreciation expense recorded as cost of service revenue for both the three months and six months ended June 30, 2010.  EBITDA is not prepared in conformity with GAAP because it excludes depreciation and amortization expense, as well as interest expense, and the provision for income taxes.  This non-GAAP financial measure should not be considered as an alternative to net income, operating income, operating margin, or cash provided by operating activities.  Management uses EBITDA as a supplemental metric in evaluating the Company’s financial performance, in evaluating financing and business development decisions, and in forecasting and analyzing future periods.  For these reasons, management believes that EBITDA is a useful supplemental measure to investors in evaluating the Company’s performance and the performance of other companies in its industry.

Wisconsin Health Plan Acquisition

On July 12, 2010, the Company announced a definitive agreement to acquire Abri Health Plan, a provider of Medicaid managed care services to BadgerCare Plus and SSI Managed Care enrollees in Wisconsin. Abri Health Plan currently serves Medicaid beneficiaries in 23 counties in Wisconsin. The purchase price for the acquisition is expected to be approximately $16 million, subject to adjustments, and will be funded with available cash and/or a draw under our credit facility. Subject to regulatory approvals and the satisfaction of other conditions, the closing of the transaction is expected to occur by August 31, 2010.

Conference Call

The Company’s management will host a conference call and webcast to discuss its second quarter results at 5:00 p.m. Eastern time on Wednesday, August 4, 2010.  The number to call for the interactive teleconference is (212) 271-4651.  A live webcast of the call can be accessed on the Company’s website at www.molinahealthcare.com, or at www.earnings.com.  An online replay will be available beginning about one hour following the conclusion of the call and webcast.  A telephonic replay of the conference call will be available from 7:00 p.m. Eastern time on Wednesday, August 4, 2010, through 6:00 p.m. on Thursday, August 5, 2010, by dialing (800) 633-8284 and entering confirmation number 21473695.

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MOH Reports Second Quarter 2010 Results

Page 9

August 4, 2010

About Molina Healthcare

Molina Healthcare, Inc. provides quality and cost-effective Medicaid-related solutions to meet the health care needs of low-income families and individuals and to assist state agencies in their administration of the Medicaid program.  Our licensed health plans in California, Florida, Michigan, Missouri, New Mexico, Ohio, Texas, Utah, and Washington currently serve approximately 1.5 million members, and our subsidiary, Molina Medicaid Solutions, provides business processing and information technology administrative services to Medicaid agencies in Idaho, Louisiana, Maine, New Jersey, and West Virginia, and drug rebate administration services in Florida.  More information about Molina Healthcare is available at www.molinahealthcare.com.       

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This earnings release contains “forward-looking statements” regarding the Company’s plans, expectations, and anticipated future events. Actual results could differ materially due to numerous known and unknown risks and uncertainties, including, without limitation, risk factors related to the following:

■ budgetary pressures on the federal and state governments and their resulting inability to fully fund Medicaid, Medicare, or CHIP, or to maintain current payment rates, benefit packages, or membership eligibility thresholds and criteria;

■ uncertainties regarding the impact of the recently enacted Patient Protection and Affordable Care Act, including the funding provisions related to health plans, and uncertainties regarding the likely impact of other federal or state health care and insurance reform measures;

■ management of our medical costs, including rates of utilization that are consistent with our expectations;

■ the accurate estimation of incurred but not reported medical costs across our health plans;

■ the continuation and renewal of the government contracts of our health plans;

■ the integration of Molina Medicaid Solutions, including its employees, systems, and operations;

■ the retention and renewal of the Molina Medicaid Solutions’ state government contracts on terms consistent with our expectations;

■ the accuracy of our operating cost and capital outlay projections for Molina Medicaid Solutions;

■ the timing of receipt and recognition of revenue under our various state contracts held by Molina Medicaid Solutions, including any changes to the anticipated start date of operation at our Maine location;

■ cost recovery efforts by the state of Michigan from Michigan health plans with respect to allegedly incorrect statewide rates and enrollment errors;

■ government audits and reviews

■ the establishment of a federal or state medical cost expenditure floor as a percentage of the premiums we receive;

■ up-coding by providers or billing in a manner at material variance with historic patterns;

■ approval by state regulators of dividends and distributions by our subsidiaries;

■ changes in funding under our contracts as a result of regulatory changes, programmatic adjustments, or other reforms;

■ high dollar claims related to catastrophic illness;

■ the favorable resolution of litigation or arbitration matters;

■ restrictions and covenants in our credit facility;

■ the success of our efforts to leverage our administrative costs to address the needs associated with increased enrollment;

■ the relatively small number of states in which we operate health plans and the impact on the consolidated entity of adverse developments in any single health plan;

■ the availability of financing to fund and capitalize our acquisitions and start-up activities and to meet our liquidity needs;

■ retroactive adjustments to premium revenue or accounting estimates which require adjustment based upon subsequent developments;

■ a state’s failure to renew its federal Medicaid waiver;

■ an unauthorized disclosure of confidential member information;

■ changes generally affecting the managed care or Medicaid management information systems industries;

■ general economic conditions, including unemployment rates;

and numerous other risk factors, including those discussed in our periodic reports and filings with the Securities and Exchange Commission. These reports can be accessed under the investor relations tab of our Company website or on the SEC’s website at www.sec.gov. Given these risks and uncertainties, we can give no assurances that our forward-looking statements will prove to be accurate, or that any other results or events projected or contemplated by our forward-looking statements will in fact occur, and we caution investors not to place undue reliance on these statements. All forward‐looking statements in this release represent our judgment as of August 4, 2010, and we disclaim any obligation to update any forward-looking statements to conform the statement to actual results or changes in our expectations.

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MOH Reports Second Quarter 2010 Results

Page 10

August 4, 2010

MOLINA HEALTHCARE, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except per-share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
Revenue:
Premium revenue	$	976,685		$	925,507		$	1,941,905		$	1,782,991
Service revenue		21,054			−			21,054			−
Investment income		1,599			2,082			3,120			5,629
Total operating revenue		999,338			927,589			1,966,079			1,788,620
Expenses:
Medical care costs		839,613			803,206			1,662,429			1,541,094
Cost of service revenue		14,254			−			14,254			−
General and administrative expenses		78,079			65,011			156,959			130,418
Premium tax expenses (1)		34,995			30,300			69,541			57,355
Depreciation and amortization		11,219			9,584			21,280			18,636
Total expenses		978,160			908,101			1,924,463			1,747,503
Gain on purchase of convertible senior notes		−			−			−			1,532
Operating income		21,178			19,488			41,616			42,649
Interest expense		(4,099	)		(3,223	)		(7,456	)		(6,638	)
Income before income taxes		17,079			16,265			34,160			36,011
Income tax expense (1)		6,500			1,700			12,991			9,235
Net income	$	10,579		$	14,565		$	21,169		$	26,776
Net income per share:
Basic	$	0.41		$	0.56		$	0.82		$	1.02
Diluted	$	0.41		$	0.56		$	0.82		$	1.02
Weighted average number of common shares and potentially dilutive common shares outstanding		25,951			25,870			25,952			26,241
Operating Statistics:
Ratio of medical care costs paid directly to providers to premium revenue		83.8	%		84.8	%		83.5	%		84.4	%
Ratio of medical care costs not paid directly to providers to premium revenue		2.2	%		2.0	%		2.1	%		2.0	%
Medical care ratio (2)		86.0	%		86.8	%		85.6	%		86.4	%
General and administrative expense ratio (3)		7.8	%		7.0	%		8.0	%		7.3	%
Premium tax ratio (1), (3)		3.6	%		3.3	%		3.6	%		3.2	%
Effective tax rate (1)		38.1	%		10.5	%		38.0	%		25.6	%

(1) Effective January 1, 2010, the Company has recorded the MGRT as a premium tax and not as an income tax.  For the three months and six months ended June 30, 2009, premium tax expense and income tax expense have been reclassified to conform to this presentation.

(2) Medical care ratio represents medical care costs as a percentage of premium revenue; premium tax ratio represents premium taxes as a percentage of premium revenue.

(3) Computed as a percentage of total operating revenue.

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MOH Reports Second Quarter 2010 Results

Page 11

August 4, 2010

MOLINA HEALTHCARE, INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except per-share data)

	June 30, 2010			Dec. 31, 2009
ASSETS
Current assets:
Cash and cash equivalents	$	460,985		$	469,501
Investments		175,212			174,844
Receivables		155,380			136,654
Income and related taxes refundable		1,157			6,067
Deferred income taxes		4,726			8,757
Prepaid expenses and other current assets		23,843			15,583
Total current assets		821,303			811,406
Property and equipment, net		83,562			78,171
Deferred contract costs		8,018			−
Intangible assets, net		120,480			80,846
Goodwill and indefinite-lived intangible assets		205,749			133,408
Investments		36,745			59,687
Restricted investments		41,028			36,274
Receivable for ceded life and annuity contracts		25,277			25,455
Other assets		19,242			19,988
	$	1,361,404		$	1,245,235
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Medical claims and benefits payable	$	345,600		$	316,516
Accounts payable and accrued liabilities		111,022			71,732
Deferred revenue		19,305			101,985
Total current liabilities		475,927			490,233
Long-term debt		266,409			158,900
Deferred income taxes		9,075			12,506
Liability for ceded life and annuity contracts		25,277			25,455
Other long-term liabilities		16,862			15,403
Total liabilities		793,550			702,497
Stockholders’ equity:
Common stock, $0.001 par value; 80,000 shares authorized, outstanding 25,811 shares at June 30, 2010, and 25,607 shares at December 31, 2009		26			26
Preferred stock, $0.001 par value; 20,000 shares authorized, no shares outstanding		−			−
Additional paid-in capital		134,076			129,902
Accumulated other comprehensive loss		(2,039	)		(1,812	)
Retained earnings		435,791			414,622
Total stockholders’ equity		567,854			542,738
	$	1,361,404		$	1,245,235

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MOH Reports Second Quarter 2010 Results

Page 12

August 4, 2010

MOLINA HEALTHCARE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
Operating activities:
Net income	$	10,579		$	14,565		$	21,169		$	26,776
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		13,851			9,584			23,912			18,636
Unrealized (gain) loss on trading securities		(2,320	)		29			(2,860	)		(3,610	)
Loss (gain) on rights agreement		2,118			(27	)		2,611			3,296
Deferred income taxes		(2,470	)		(1,743	)		624			3,245
Stock-based compensation		2,372			2,024			4,508			3,458
Non-cash interest on convertible senior notes		1,266			1,172			2,509			2,366
Gain on purchase of convertible senior notes		−			−			−			(1,532	)
Amortization of deferred financing costs		343			344			687			696
Tax deficiency from employee stock compensation		(30	)		(14	)		(383	)		(547	)
Changes in operating assets and liabilities:
Receivables		(9,652	)		6,735			(1,598	)		(22,878	)
Prepaid expenses and other current assets		(5,680	)		3,644			(5,148	)		732
Medical claims and benefits payable		18,627			(2,920	)		29,084			16,265
Accounts payable and accrued liabilities		12,824			(12,804	)		27,958			(15,726	)
Deferred revenue		7,984			1,670			(82,680	)		54,638
Income taxes		1,975			5,666			4,910			9,025
Net cash provided by operating activities		51,787			27,925			25,303			94,840
Investing activities:
Purchases of property and equipment		(11,547	)		(9,557	)		(17,523	)		(19,924	)
Purchases of investments		(42,329	)		(24,055	)		(91,768	)		(72,182	)
Sales and maturities of investments		63,610			46,665			116,836			82,292
Cash paid in business purchase transactions		(131,970	)		−			(134,400	)		−
Increase in deferred contract costs		(8,018	)		−			(8,018	)		−
Increase in restricted investments		(4,098	)		(6,979	)		(4,754	)		(6,534	)
Increase in other assets		(88	)		(1,053	)		(332	)		(2,761	)
Increase (decrease) in other long-term liabilities		419			(8,641	)		1,089			(8,772	)
Net cash used in investing activities		(134,021	)		(3,620	)		(138,870	)		(27,881	)
Financing activities:
Borrowings under credit facility		105,000			−			105,000			−
Treasury stock purchases		−			(12,736	)		−			(27,712	)
Purchase of convertible senior notes		−			−			−			(9,653	)
Payment of credit facility fees		(1,671	)		−			(1,671	)		−
Excess tax benefits from employee stock compensation		66			−			179			−
Proceeds from employee stock plans		1,543			1,081			1,543			1,081
Net cash provided by (used in) financing activities		104,938			(11,655	)		105,051			(36,284	)
Net increase (decrease) in cash and cash equivalents		22,704			12,650			(8,516	)		30,675
Cash and cash equivalents at beginning of period		438,281			405,187			469,501			387,162
Cash and cash equivalents at end of period	$	460,985		$	417,837		$	460,985		$	417,837

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MOH Reports Second Quarter 2010 Results

Page 13

August 4, 2010

MOLINA HEALTHCARE, INC.

UNAUDITED MEMBERSHIP DATA

Total Ending Membership By Health Plan:	June 30, 2010		March 31, 2010		Dec. 31, 2009		June 30, 2009
California		348,000		353,000		351,000		349,000
Florida		54,000		52,000		50,000		29,000
Michigan		226,000		226,000		223,000		207,000
Missouri		78,000		78,000		78,000		78,000
New Mexico		93,000		92,000		94,000		85,000
Ohio		234,000		228,000		216,000		203,000
Texas		42,000		40,000		40,000		30,000
Utah		77,000		75,000		69,000		64,000
Washington		346,000		338,000		334,000		323,000
		1,498,000		1,482,000		1,455,000		1,368,000
Total Ending Membership By State for the Medicare Advantage Plans:
California		3,600		2,700		2,100		1,600
Florida		500		300		–		–
Michigan		5,000		4,200		3,300		2,100
New Mexico		600		600		400		400
Texas		600		500		500		400
Utah		8,100		7,100		4,000		3,100
Washington		1,900		1,600		1,300		1,000
		20,300		17,000		11,600		8,600
Total Ending Membership By State for the Aged, Blind or Disabled Population:
California		13,600		13,400		13,900		13,100
Florida		9,300		8,900		8,800		6,000
Michigan		31,600		32,700		32,200		29,900
New Mexico		5,800		5,800		5,700		5,700
Ohio		27,400		26,700		22,600		19,700
Texas		18,500		18,100		17,600		17,000
Utah		7,600		7,900		7,500		7,600
Washington		3,700		3,500		3,200		3,000
		117,500		117,000		111,500		102,000

	Three Months Ended						Six Months Ended
Total Member Months (1) by Health Plan:	June 30, 2010		March 31, 2010		June 30, 2009		June 30, 2010		June 30, 2009
California		1,050,000		1,062,000		1,031,000		2,112,000		2,011,000
Florida		160,000		154,000		75,000		314,000		136,000
Michigan		679,000		675,000		623,000		1,354,000		1,243,000
Missouri		234,000		234,000		232,000		468,000		463,000
New Mexico		280,000		280,000		251,000		560,000		499,000
Ohio		695,000		673,000		596,000		1,368,000		1,156,000
Texas		125,000		121,000		92,000		246,000		190,000
Utah		230,000		221,000		200,000		451,000		384,000
Washington		1,022,000		1,007,000		952,000		2,029,000		1,871,000
		4,475,000		4,427,000		4,052,000		8,902,000		7,953,000

(1) A total member month is defined as the aggregate of each month’s ending membership for the period presented.

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MOH Reports Second Quarter 2010 Results

Page 14

August 4, 2010

MOLINA HEALTHCARE, INC.

UNAUDITED SELECTED FINANCIAL DATA BY HEALTH PLAN

(Dollars in thousands except per member per month amounts)

	Three Months Ended June 30, 2010
	Premium Revenue				Medical Care Costs				Medical Care Ratio			Premium Tax Expense (1)
	Total		PMPM		Total		PMPM
California	$	124,551	$	118.57	$	106,006	$	100.92		85.1	%	$	1,637
Florida		41,462		260.32		39,134		245.70		94.4			6
Michigan (1)		156,769		230.76		135,763		199.84		86.6			9,711
Missouri		51,779		220.86		46,320		197.58		89.5			–
New Mexico		91,949		328.48		73,210		261.54		79.6			2,987
Ohio		212,669		306.34		174,275		251.03		82.0			16,512
Texas		43,493		348.45		39,133		313.52		90.0			705
Utah		64,934		281.44		60,975		264.28		93.9			–
Washington		186,204		182.23		154,792		151.49		83.1			3,394
Other (2)		2,875		–		10,005		–		–			43
	$	976,685	$	218.25	$	839,613	$	187.62		86.0	%	$	34,995

	Three Months Ended June 30, 2009
	Premium Revenue				Medical Care Costs				Medical Care Ratio			Premium Tax Expense (1)
	Total		PMPM		Total		PMPM
California	$	121,918	$	118.23	$	111,750	$	108.37		91.7	%	$	3,395
Florida		19,339		257.22		17,355		230.83		89.7			–
Michigan (1)		136,549		219.44		112,402		180.64		82.3			9,538
Missouri		58,141		251.06		48,582		209.78		83.6			–
New Mexico		114,408		456.80		100,255		400.30		87.6			2,989
Ohio		194,885		327.02		168,639		282.98		86.5			10,731
Texas		34,345		372.13		24,851		269.26		72.4			572
Utah		57,918		288.99		53,182		265.35		91.8			–
Washington		183,720		192.96		156,981		164.88		85.5			3,064
Other (2)		4,284		–		9,209		–		–			11
	$	925,507	$	228.38	$	803,206	$	198.20		86.8	%	$	30,300

(1) Effective January 1, 2010, the Company has recorded the Michigan gross receipts tax, or MGRT, as a premium tax and not as an income tax.  The 2009 amounts have been reclassified to conform to this presentation.

(2) “Other” medical care costs primarily include medically related administrative costs at the parent company.

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MOH Reports Second Quarter 2010 Results

Page 15

August 4, 2010

MOLINA HEALTHCARE, INC.

UNAUDITED SELECTED FINANCIAL DATA BY HEALTH PLAN

(Dollars in thousands except per member per month amounts)

	Six Months Ended June 30, 2010
	Premium Revenue				Medical Care Costs				Medical Care Ratio			Premium Tax Expense (1)
	Total		PMPM		Total		PMPM
California	$	248,461	$	117.62	$	213,567	$	101.10		86.0	%	$	3,265
Florida		80,550		256.94		73,821		235.47		91.7			12
Michigan (1)		312,114		230.45		261,212		192.87		83.7			19,650
Missouri		103,922		221.93		89,836		191.85		86.5			–
New Mexico		187,547		334.75		147,225		262.78		78.5			4,991
Ohio		431,032		315.20		346,900		253.68		80.5			33,517
Texas		82,693		336.46		71,464		290.77		86.4			1,386
Utah		123,474		273.66		122,435		271.36		99.2			–
Washington		367,258		181.05		318,302		156.91		86.7			6,656
Other (2)		4,854		–		17,667		–		–			64
	$	1,941,905	$	218.15	$	1,662,429	$	186.75		85.6	%	$	69,541

	Six Months Ended June 30, 2009
	Premium Revenue				Medical Care Costs				Medical Care Ratio			Premium Tax Expense (1)
	Total		PMPM		Total		PMPM
California	$	231,953	$	115.34	$	215,723	$	107.27		93.0	%	$	6,711
Florida		39,030		287.03		35,123		258.29		90.0			–
Michigan (1)		269,314		216.71		222,397		178.96		82.6			17,376
Missouri		116,848		252.53		95,556		206.51		81.8			–
New Mexico		196,226		393.53		172,276		345.50		87.8			5,082
Ohio		382,107		330.46		326,419		282.30		85.4			20,923
Texas		67,356		354.66		52,257		275.15		77.6			1,256
Utah		108,536		282.34		97,445		253.49		89.8			–
Washington		364,424		194.78		306,526		163.83		84.1			6,011
Other (2)		7,197		–		17,372		–		–			(4	)
	$	1,782,991	$	224.14	$	1,541,094	$	193.73		86.4	%	$	57,355

(1) Effective January 1, 2010, the Company has recorded the Michigan gross receipts tax, or MGRT, as a premium tax and not as an income tax.  The 2009 amounts have been reclassified to conform to this presentation.

(2) “Other” medical care costs primarily include medically related administrative costs at the parent company.

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MOH Reports Second Quarter 2010 Results

Page 16

August 4, 2010

MOLINA HEALTHCARE, INC.

UNAUDITED SELECTED FINANCIAL DATA

(Dollars in thousands except per member per month amounts)

The following tables provide the details of the Company’s medical care costs for the periods indicated:

	Three Months Ended June 30, 2010							Three Months Ended June 30, 2009
	Amount		PMPM		% of Total Medical Care Costs			Amount		PMPM		% of Total Medical Care Costs
Fee-for-service	$	594,960	$	132.95		70.9	%	$	517,066	$	127.59		64.4	%
Capitation		136,764		30.56		16.3			154,386		38.10		19.2
Pharmacy		75,170		16.80		8.9			99,256		24.49		12.4
Other		32,719		7.31		3.9			32,498		8.02		4.0
	$	839,613	$	187.62		100.0	%	$	803,206	$	198.20		100.0	%

	Six Months Ended June 30, 2010							Six Months Ended June 30, 2009
	Amount		PMPM		% of Total Medical Care Costs			Amount		PMPM		% of Total Medical Care Costs
Fee-for-service	$	1,161,839	$	130.52		69.9	%	$	1,006,207	$	126.49		65.3	%
Capitation		273,896		30.77		16.5			272,800		34.29		17.7
Pharmacy		165,241		18.56		9.9			201,894		25.38		13.1
Other		61,453		6.90		3.7			60,193		7.57		3.9
	$	1,662,429	$	186.75		100.0	%	$	1,541,094	$	193.73		100.0	%

The following table provides the details of the Company’s medical claims and benefits payable as of the dates indicated:

	June 30, 2010		March 31, 2010		June 30, 2009
Fee-for-service claims incurred but not paid (IBNP)	$	268,652	$	260,456	$	244,987
Capitation payable		49,101		42,461		34,657
Pharmacy payable		13,385		16,196		22,367
Other		14,462		7,860		6,696
	$	345,600	$	326,973	$	308,707

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MOH Reports Second Quarter 2010 Results

Page 17

August 4, 2010

MOLINA HEALTHCARE, INC.

CHANGE IN MEDICAL CLAIMS AND BENEFITS PAYABLE

(Dollars in thousands, except per-member amounts)

(Unaudited)

The Company’s claims liability includes an allowance for adverse claims development based on historical experience and other factors including, but not limited to, variation in claims payment patterns, changes in utilization and cost trends, known outbreaks of disease, and large claims.  The Company’s reserving methodology is consistently applied across all periods presented.  The negative amounts displayed for “Components of medical care costs related to: Prior periods” represent the amount by which the Company’s original estimate of claims and benefits payable at the beginning of the period exceeded the actual amount of the liability based on information (principally the payment of claims) developed since that liability was first reported.  The following table shows the components of the change in medical claims and benefits payable as of the periods indicated:

	Six Months Ended						Quarter Ended			Year Ended
	June 30, 2010			June 30, 2009			March 31, 2010			Dec. 31, 2009
Balances at beginning of period	$	316,516		$	292,442		$	316,516		$	292,442
Components of medical care costs related to:
Current period		1,705,411			1,587,469			861,271			3,227,794
Prior periods		(42,982	)		(46,375	)		(38,455	)		(51,558	)
Total medical care costs		1,662,429			1,541,094			822,816			3,176,236
Payments for medical care costs related to:
Current period		1,389,307			1,297,946			581,389			2,919,240
Prior periods		244,038			226,883			230,970			232,922
Total paid		1,633,345			1,524,829			812,359			3,152,162
Balances at end of period	$	345,600		$	308,707		$	326,973		$	316,516
Benefit from prior period as a percentage of:
Balance at beginning of period		13.6	%		15.9	%		12.1	%		17.6	%
Premium revenue		2.2	%		2.6	%		4.0	%		1.4	%
Total medical care costs		2.6	%		3.0	%		4.7	%		1.6	%
Days in claims payable, fee for service only		44			47			44			44
Number of members at end of period		1,498,000			1,368,000			1,482,000			1,455,000
Number of claims in inventory at end of period		106,300			117,100			153,700			93,100
Billed charges of claims in inventory at end of period	$	146,600		$	173,400		$	194,000		$	131,400
Claims in inventory per member at end of period		0.07			0.09			0.10			0.06
Billed charges of claims in inventory per member at end of period	$	97.86		$	126.75		$	130.90		$	90.31
Number of claims received during the period		7,029,600			6,287,300			3,493,300			12,930,100
Billed charges of claims received during the period	$	5,580,400		$	4,707,200		$	2,760,500		$	9,769,000

-END-