Molina Medicaid Solutions - DHHR

e10vkOther intangible assets are amortized over their useful lives ranging from one to 15 years. The weighted average amortization period for contract rights and licenses isapproximately 11.5 years, and for provider network is approximately 9.9 years. Amortization expense on intangible assets recognized for the years ended December 31,81Table of ContentsMOLINA HEALTHCARE, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)2008, 2007, and 2006 was $13.0 million, $10.8 million, and $9.5 million, respectively. We estimate that our intangible asset amortization expense will be $11.6 million in 2009,$11.6 million in 2010, $10.4 million in 2011, $8.3 million in 2012, and $5.9 million in 2013. The following table provides the details of identified intangible assets, by majorclass, for the periods indicated:Accumulated NetCost Amortization Balance(In thousands)Intangible assets:Contract rights and licenses $ 114,219 $ 46,160 $ 68,059Provider network 14,548 3,474 11,074Balance at December 31, 2008 $ 128,767 $ 49,634 $ 79,133Intangible assets:Contract rights and licenses $ 111,892 $ 34,775 $ 77,117Provider network 14,548 1,889 12,659Balance at December 31, 2007 $ 126,440 $ 36,664 $ 89,776The changes in the carrying amount of goodwill and indefinite - lived intangible assets were as follows (in thousands):Balance as of December 31, 2007 $ 117,447Goodwill adjustment related to acquisition of Mercy CarePlus (6,150)Goodwill adjustment related to acquisition of Cape Health Plans 2,169Balance at December 31, 2008 $ 113,4669. Restricted InvestmentsPursuant to the regulations governing our subsidiaries, we maintain statutory deposits and deposits required by state Medicaid authorities. Additionally, we maintainrestricted investments as protection against the insolvency of capitated providers. The following table presents the balances of restricted investments by health plan, and by ourinsurance company:December 31,2008 2007(In thousands)California $ 367 $ 524Florida 9,828 307Insurance Company 4,718 4,722Michigan 1,000 1,000Missouri 506 500Nevada 787 885New Mexico 9,670 8,991Ohio 8,459 9,370Texas 1,521 1,491Utah 577 575Washington 151 154Other 618 500Total $ 38,202 $ 29,01982Table of ContentsMOLINA HEALTHCARE, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)The increase in restricted investments at our Florida health plan relates primarily to an escrow deposit that will be used for the purpose of reimbursing the state of Floridafor any sums due under a final settlement agreement with the state, under our purchase agreement with NetPASS, as discussed in Note 3, “Business Purchase Transactions.”The contractual maturities of our held-to-maturity restricted investments as of December 31, 2008 are summarized below.Amortized EstimatedCost Fair Value(In thousands)Due in one year or less $ 33,485 $ 33,485Due one year through five years 4,572 4,572Due after five years through ten years 145 145Due after ten years — —$ 38,202 $ 38,20210. Medical Claims and Benefits PayableThe following table presents the components of the change in our medical claims and benefits payable for the years ended December 31, 2008 and 2007. The negativeamounts displayed for “components of medical care costs related to prior years” represent the amount by which our original estimate of claims and benefits payable at thebeginning 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. Thebenefit of this prior period development may be offset by the addition of a reserve for adverse claims development when estimating the liability at the end of the period(captured as “components of medical care costs related to current year”).Year Ended December 31,2008 2007(Dollars in thousands)Balances at beginning of period $ 311,606 $ 290,048Medical claims and benefits payable from business acquired — 14,876Components of medical care costs related to:Current year 2,683,399 2,136,381Prior years (62,087) (56,298)Total medical care costs 2,621,312 2,080,083Payments for medical care costs related to:Current year 2,413,128 1,851,035Prior years 227,348 222,366Total paid 2,640,476 2,073,401Balances at end of period $ 292,442 $ 311,606Benefit from prior period as a percentage of:Balance at beginning of period 19.9% 19.4%Premium revenue 2.0% 2.3%Total medical care costs 2.4% 2.7%Days in claims payable 41 52Number of members at end of period 1,256,000 1,149,00083http://sec.gov/Archives/edgar/data/1179929/000095013409005437/a51362e10vk.htm[1/6/2012 11:14:47 AM]