Good morning. Welcome to Molina Healthcare's 2021 Virtual Investor Day. I'm Ron Kurtz, Interim Head of Investor Relations. Before we begin the program, I would like to remind you that this event is being recorded. Shortly after we conclude, a replay will be available on the investor information section of our website, www.molinahealthcare.com, where you can also now find a copy of the presentation materials. Turning to today's program, our first speaker is President and Chief Executive Officer, Joe Zubretsky. Joe will present our long-term strategy of sustaining profitable growth. Following Joe's presentation, Mark Keim, Chief Financial Officer, will speak to our compelling financial profile. We will then have a live question and answer session with both Joe and Mark. As a reminder, to ask a question, you will need to dial in separately to 1-877-270-2148.
You may dial in before the start of the question and answer session if you wish to get in queue. As a cautionary reminder, our presentation and remarks today will include numerous forward-looking statements, including statements regarding the company's 2021 guidance, our 2022 premium revenue and revenue growth strategy, our long-term financial targets and margin outlook, the COVID pandemic, COVID risk-sharing corridors, future RFPs and re-procurements, mergers and acquisitions, Medicaid redeterminations, and the company's general business plans. These statements are covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from our forward-looking statements due to numerous risk factors. These risk factors are discussed in the company's latest annual report on Form 10-K and our other reports filed with the Securities and Exchange Commission. Our forward-looking statements represent our judgment as of today, September 17th, 2021.
With that, I am pleased to begin the program and introduce Molina Healthcare President and CEO, Joe Zubretsky. Joe?
Thanks, Ron. Good morning, everyone. Thanks for being with us today. I hope in this very interesting time in which we live, today finds you and your families healthy, safe, and sound. Today, we're going to take you on an excursion, a short jaunt, so to speak, along the path we have paved to sustaining profitable growth. We say that with a great deal of confidence. Even though the catchphrase is not terribly creative, it's very descriptive of what we intend to accomplish over the next number of years. The reason we exude so much confidence in this strategy is all of the elements that need to be brought together and combined to execute on this strategy have already been accomplished, albeit sequentially and individually over the past number of years.
This management team turned a $500 million EBITDA loss into a $1.2 billion EBITDA gain by focusing on the fundamentals of managed care, by applying a really strict discipline and financial acumen to the complexity of government-sponsored managed care. Secondly, we produced and extracted over $5 billion of excess capital and deployed it exactly the way we intended to. Inorganic growth, organic growth, and even used some to buy back some of our shares. We've created a track record and a history of creating excess capital through best-in-class margins, harvesting it, and deploying it exactly according to our strategy. Thirdly, when we merely promised a pivot to growth, we've actually executed a growth propulsion, a catapult, having grown revenues now 60% from the end of 2019 to 2021. All of these elements combined give us great confidence in accomplishing the strategy we are about to articulate.
Here's my agenda, h ere's what I'm going to talk about this morning. We'll deal with the compulsory and the obligatory statements about recapping our history, and talking about the value of the franchise we've created. We certainly will touch upon the very attractive features of the markets we are in, government-managed care, particularly managed Medicaid. For most of the time this morning, we're going to open up our playbook, and we're going to show you exactly how we intend to build brick by brick to a $42 billion company, at the end of 2025. We'll try to do that with the same level of clarity and specificity that you've come to expect from us. First, I've always found that a better form of communication, rather than inundate you with a lot of detail and having you wonder where it's all headed, we'll start with where it's headed.
You can avoid reading ahead because we're going to start with articulating the targets that underpin this strategy. First, revenue growth. Our strategy calls for growing revenues, premium revenues, 13%-15% off a 2022 baseline on average over time. Two-thirds of that growth rate will be organic. It'll be derived organically, half of which is just being in the markets that we're in. Medical trend will cause yields to be low single-digit, and the demographics certainly suggest there's inherent growth in the markets we're in. Half of our organic growth is just being in the markets we're in. The other half will come from strategic initiatives, which we'll spend the next 45 minutes or so conveying to you to give you clarity around how exactly we will grow organically. Two-thirds of our 13%-15% will be derived organically.
One-third will be derived through our M&A strategy. Now, if you look at the left side of the page, you can see how we intend to grow each of our lines of business, and we'll get into more detail of that in a few minutes. The themes will be in Medicaid and Medicare, grow the top line and hold onto your margins. While in Marketplace, the theme you'll hear later is hold onto your margins and attempt to grow the business. We still think we can grow Marketplace at 5%-8%, even though we're going to emphasize margin over membership. Turning now to the 1/3 of the growth that will be derived inorganically. We believe we have earned the right to include this in our core growth rate based on our recent track record.
We've now purchased $8 billion of revenue over the past two years, and it's providing the accretion that we conveyed to you and articulated in many of our earnings reports. We've done it all through the generation of internal cash flow. We have not tapped the equity markets, nor do we intend to. We intend to create excess cash off the earnings stream that we will produce, extract those dividends to the parent company, leverage it up and deploy it in a very accretive way. We like the properties we're buying. We like managed Medicaid, we like Medicare, and we like Marketplace. Most of the acquisitions we've done, as you've seen, are in the Medicaid space. 2/3 of the 13%-15% growth rate will be driven organically. 1/3 will be driven inorganically. Based on our track record, we think that's a very good mix.
Our strategy, sustaining profitable growth, means that we intend to sustain the margin position that we've produced here over the last couple of years. We are projecting our pre-tax margins to be in the range of 4%-5%, which on an after-tax basis, at today's tax rate, is 3%-3.8%. We believe we can hold serve on our MCRs at 87%-88%, and with the operating leverage we're creating through our growth, drive our G&A ratio from the 7% range that we're in today to something lower than 7%, all combined to produce 4%-5% pre-tax, 3%-3.8% after tax. If you look back two years ago when we were last with you to give you long-term targets, we're a little north of that, 3.8%-4.2% on an after-tax basis. The reason for the change is entirely attributable to the Marketplace.
The last time we gave you long-term targets, we had projected Marketplace margins to be in the high single digits after tax. Now we're projecting them to be mid-single digits pre-tax. 4%-5% pre-tax margins on top of a 13%-15% revenue growth rate. What does it all mean? Well, when you reduce it all down to how the enterprise is going to look after producing these growth rates, we will produce earnings per share growth of 15%-18%. Certainly, we'll be able to grow net income at least at the rate of growth of revenue. Perhaps with the operating leverage, we can pull some of that into our margin. Net income growth might be slightly north of the premium revenue growth at 13%-16% if we get to hold onto the operating leverage.
The least that will happen will be the operating leverage could then be used to offset other pressures on the margins in the portfolio. We are projecting net income growth slightly north of the revenue growth at 13%-16%. Even after allocating the capital to the organic growth, even after allocating capital to the M&A strategy, there's still excess capital remaining. With that excess capital, our model would demonstrate that we have the ability to buy back 2% of our shares every year for the foreseeable future. 13%-16% net income growth plus 2% reduction in share count would then get us to the 15% or 18%. 13%-15% revenue growth, 4%-5% pre-tax margins, all combined to present a picture of 15%-18% earnings per share growth here over the next few years.
The investment thesis in our view, is very clear. As you'll hear in a few moments, we're in the right markets, t hese are high-growth segments. We have the political and regulatory winds at our back. The demographics certainly support the investment thesis. Therefore, highly confident that we'll grow revenues in the double-digit range. We believe we're in a reasonable rate environment. With the demonstrated ability to always manage our medical costs according to the rate we receive, we believe we can hold on to these very attractive margins that you have termed best in class. The capital efficiency and cash flow generation of this business, Mark will talk in a few moments about that, are extremely attractive. We have demonstrated an ability to extract the cash flows, deploy it in a very, very accretive way to the satisfaction of our returns. The management team is proven.
We've done hard work over the past four years to get the company to this position and I have a lot of confidence that the team that we have recruited, deployed, and in place can take this strategy and propel it into the future. A few words about our franchise. We sort of inherited a collage and created a mosaic. We're a Fortune 150 company at this point. Our new estimate of revenue for this year is $27 billion of revenue, 4.7 million members, 18 states, soon to be 19 with Nevada, and we're in the right products. Our core products, Medicaid, Medicare, and Marketplace, as you'll see in a few moments, are very synergistic, not only thematically, but from a growth perspective. We are a pure-play government-sponsored managed care company. We have no intention of going into services and technology businesses.
There is so much growth in taking capitated risk, high acuity capitated risk, managing it very effectively, and growing in the markets we're in. Pure play, government-sponsored managed care. We will not venture far from the fields we are in, and we will stick to our knitting. The company's always been very, very high on mission. Our 13,000 associates are passionate about serving members, about making sure they have the right care in the right setting at the right cost. It's palpable. That really drives a lot of the success we've had in attracting new business, impressing our state customers with the delivery of excellent service, and it all starts with the passion of our 13,000 associates. We had to rebalance our focus on our constituencies.
We certainly understand that you can't satisfy shareholders and superior returns unless you have highly engaged employees, members with a great experience, and government agencies that enjoy the relationship with our company. We balanced the focus on our constituencies to have equal prominence between members, shareholders, our customers, and our employees. Certainly the mission focus of our people, as I said, is palpable and really underpins the financial aspects of our strategy. A little bit of a retrospective. This is the track record. You know these numbers. We're going to be $27 billion this year. That's our new revenue guidance, which Mark will talk about in a minute. Growing 60% over the last two years. Earnings per share growing at 15%. If you believe and look at the embedded earnings of the company, that growth rate is nearly the growth rate of revenue.
Of course, all that resulted in share price growth, which we're really pleased with. The portfolio of businesses that we've created is well diversified. In the golden, the old days of government managed Medicaid, companies had major contracts making up huge percentages of their revenue. This is a great place to be. With only three states accounting for more than 10% of our revenues, most of our states accounting for 6%-10% of our revenues, we are very well diversified geographically, s oon to be 19 with the addition of Nevada. The reason that's important is every state has their own rate-setting regime and their own re-procurement schedules. The fact that these things are layered and feathered nicely and well diversified de-risks anything that might happen that would be detrimental to our financial profile due to re-procurement or due to the rate-setting process.
Diversification really is the only risk management strategy that's ever worked, and we're really happy with the diversified geographic portfolio we've created. Of course, on the right side of the page, we're a managed Medicaid company. 77% of our revenues are managed Medicaid and o ur Medicare and Marketplace products follow the footprint of Medicaid. Medicaid is the anchor tenant, i t helps us build our networks, i t helps us build our capability, and then we bring Medicare and Marketplace in a draft right through our Medicaid footprint. Now, all of these products are thematically consistent. We love being in government-sponsored managed care, serving the disadvantaged, serving low-income people. More importantly, the products are synergistic from a growth perspective. People move up and down the financial spectrum all the time. They're out of work, part-time work, full-time work, full-time work with employer-sponsored insurance or without.
Our products respond to people no matter where they fall in the income chain. If their income out of Medicaid, we capture them in Marketplace with a highly subsidized product. As is obvious, people age, and their acuity changes. As they move up in age, our Duals products can capture them. As people become eligible for Duals, but then income out of Duals, we have a strategy to focus an MAPD product on low-income people who have incomes higher than Duals but lower than a traditional MAPD product. As people move up and down the income spectrum, as they age up, we can capture them. People age. We have 20,000 people a year that turn 65 in our membership base, and we have products that can capture them in our Medicare business if they age out of Medicaid and are no longer eligible.
That from a product perspective, the portfolio is very synergistic. Market share is really an important discussion to have because some of our strategy relies on us growing market share. Our market share is large enough to be very relevant nationally and locally, but small enough to where you could actually believe we ought to be able to increase it. 6%, 3%, and 5% market share nationally across our three products. Look at where we are in our individual states. Generally speaking, except for the state of Washington, we are not the largest player in any of our states. Some of our top competitors are. When you're operating at 9%, 6%, and 9% market share across our products, you can actually craft a story where we can begin to increase that, and we'll show you that in a few moments.
Market share is a huge opportunity for us. Our market shares are large enough to make us very relevant and important to our state customers, but low enough we could actually develop a story operationally and financially where we can increase market share and grow. A few words, but this is the information you already know and are already familiar with, but a few words about the attractive government market. The markets are large and growing. The government is making coverages more accessible and more affordable all the time. Whether it's Medicaid, Medicare, or Marketplace, the growth rates are high, the demographics are in our favor, and the regulatory and political environment is very much favorable to increasing the size of these markets. We are in the right markets. We don't have to venture anywhere far from the core in order to support our growth rate.
As I said, the political and regulatory environment is really supportive of managed Medicaid and taking care of low-income, disadvantaged people on government assistance. We've laid out some of the features here, but you know all this. Through executive orders, through legislation, through regulation, across all of our products, the government today is trying to make healthcare coverage more affordable and more accessible to all Americans. Whether it's the increased FMAP match, whether it's the subsidies in the Marketplace, many of the initiatives just in the first eight months of the new government have all been focused and directed on making healthcare more affordable and more accessible to disadvantaged people. The political and regulatory environment provides very, very favorable conditions for all of our segments. A lot has been discussed about the rate environment. As a managed Medicaid company, we're a rate taker, not a rate maker.
The rate environment is very important. There's a lot of speculation that rates flex up and down with the strength of state budgets, perhaps some of that is true. Over time, it's been proven that our state customers produce rates that are actuarially sound, that reflect the benefits that we need and intend to pay, over time, rates are adequate and actuarially sound. We have some visibility into rates next year, we're happy with what we're seeing. The rates reflect a medical cost baseline, a pre-COVID baseline trended forward. We can always debate what that trend is, for the most part, the states have not deviated from the tried-and-true time-tested process of establishing a credible medical cost baseline trending off that baseline. The wrinkle that was introduced this year in response to COVID were the COVID risk-sharing corridors.
We're seeing these expiring. They've already expired in California, N.Y., South Carolina, and Michigan for FY 2022, and w e expect most of them to expire as the PHE, the public health emergency, expires. They were put in place to respond to COVID because of the utilization curtailment and suppression that was taking place that was not contemplated in rates. We had every intention of, in some way, paying that money back to our state customers because we weren't paying it in benefits. They introduced the risk-sharing corridors to accomplish just that. We're dealing with them. They're manageable. We include our COVID corridor payments in the cost of COVID estimates that we give you routinely.
The COVID risk-sharing corridors will expire with the PHE, the core rate environment is stable, it's actuarially sound, and it's reverted back to the time-tested process of establishing a credible medical cost baseline and a trend off that baseline. A lot has been said about the economy and how our businesses respond to economic events. Well, you can throw all the stochastic models out. We've just had a three standard deviation economic event, three standard deviation epidemiological event as well, the business powers through it. The business is resilient to economic trends, even severe ones. Whether you want to look at membership going up and down with unemployment, rates hardening and softening with the strength of state budgets, you can look through all that over time. The business works well in up and down economies.
A lot has also been spoken about this redetermination bubble that the entire industry has enjoyed having extra Medicaid membership. If you look over the past number of years and past number of recessions, when Medicaid roles expand, they stay expanded after the crisis has passed. We expect the same to happen here. We expect Medicaid membership to be higher nationally post-pandemic than it was pre-pandemic. Again, economic recovery, we talk about it a lot. The business has been through the most severe economic stress test it could ever go through, with the growth rates the way we're enjoying them, margins at 3% or higher, the business is resilient to severe economic trends. I want to spend most of my time this morning actually giving you the play-by-play.
We're going to open up our playbook and show you how we're going to build to a $42 billion company at the end of 2025, which is a 13%-15% compound annual growth rate on revenue off a 2022 base. We're going to do it for each one of our product lines, Medicaid, Medicare, Marketplace. We'll talk a little bit about M&A, and we'll talk about how we believe we can grow the business at 13%-15% and maintain the margin profile that we currently enjoy. First, with respect to Medicaid. We expect to grow Medicaid revenues organically at 8%-10%, half of which will be just being in the business. We think yields will be 2%-3%. The membership will grow in our current footprint, and just by being in the market, we can enjoy half of that growth rate.
The other half will come from executing strategic initiatives to increase market share, potentially grow with the expansion and non-expansion states. carve-in opportunities are ripe with opportunity, and of course, leveraging our recent success in winning new states. 4% of the Medicaid growth rate, just being in the footprint, just by showing up in our footprint, yield plus demographics will yield half of the growth rate. The other half will come from some well-constructed, well-developed, and already implemented strategic initiatives that we're currently enjoying success at. Let's look at increasing market share. As I said before, we're relevant, but we're not so big that you couldn't believe we can grow it. Some of our best states, Ohio, 12% market share, Illinois 12%, Michigan 18%. We have a couple of 20 percenters. Washington's the outlier at 51%.
Our market share is large enough to be relevant but small enough that we believe we can grow it. The way to think about market share is very simple, actually. You have membership inflows and membership outflows. Both occur voluntarily and involuntarily, you have to attack the four nodes of inflows and outflows with strategic initiatives, tactical initiatives, to make sure you capture as much of the inflow as you can and avoid as much of the outflow as you can. You do this by engaging membership and redeterminations proactively. We have the information. We know when members are supposed to redetermine, counseling them through the process, making sure that all the eligibles stay in, and the ones that are eligible don't leak out and go to a competitor. Providers drive membership. If you go dark with a provider and terminate one, you'll lose membership.
If you gain a provider you don't have, you'll probably gain membership, and k eeping providers happy, paid well, paid accurately, and a great provider experience also drives membership. On the outflow side, or rather on the inflow side, we also have choice, and some of our states are large choice states, some of them are low choice states. When members have choice, your brand matters. Your member experience matters. Word of mouth matters. Your community involvement all matter when members have choice to select your brand over a competitor's. In states where choice is not high, where auto assignment is high, the auto assignment algorithm is tied to quality scores, generally speaking. The better your quality scores, the more auto assignment you'll get.
We've really focused in on the four nodes of inflows and outflows, and we've designed operational protocols that attempt to maximize the inflows, minimize the outflows, and a 1% increase in service area market share equals a $1.6 billion revenue opportunity in our current footprint. You'll see this construct repeated time and time again as we go through. We state the objective, w e quantify what the revenue opportunity is. Mark, later on in the program, will take all that revenue opportunity and distill it down into a financial model to support the growth rate that we've aspired to. Many states, 12, have not expanded Medicaid. As you know, the ACA gave them the right to expand it, but not the obligation. In our footprint, Texas, Mississippi, Florida, South Carolina, and Michigan have not. They may or they may not.
The FMAP match increase is certainly an incentive to do so, but many of these states are deep red, and their political preference is not to expand. We believe whether they do or not take advantage of the enhanced FMAP match, that there are other initiatives offered and suggested by the federal government that will capture more market share in Medicaid, whether the states expand or not. The federal government is already talking about a federal Medicaid program to close that donut hole, 100% FMAP by the federal government. The federal government can't require a state to expand, but they certainly can bring down the level of FPL on the Marketplace. Whether Medicaid expands up income levels or Marketplace expands down, it captures that same donut hole.
We believe whether these states expand or not, in our footprint, there is more opportunity as that gap, that donut hole closes, and these members get captured in a program that we have. $12 billion of expansion revenue opportunity. If you just take our state average market share of 7%, another $1 billion of opportunity, between now and 2025. The carve-in opportunities we've listed here, generally speaking, as you know, 80% of the lives are in managed care. Only 50% of the cost is. LTSS behavioral, and to some extent, ABD, are still managed in a fee-for-service environment. States have seen the value of managed care, and they are continually evaluating whether to put some of these services into managed care. We've listed some of them here. California's already announced it's expanding its LTSS program. Kentucky is as well, so is South Carolina.
On the behavioral side, California, Utah, and Michigan are going to put their behavioral programs into managed care. Generally speaking, states will attach these benefits to the Medicaid contract or value the incumbency of a Medicaid player in order to evaluate your skills at managing these benefits. Integrating behavioral and Medicaid is critically important. Integrating LTSS and all the other healthcare delivery coverage is incredibly important. We think there's high probability these services get attached to Medicaid, and gives us a great opportunity to participate in these carve-in opportunities totaling $7 billion here over the next number of years. Again, if you just apply our service area market share, another $1 billion of revenue opportunity in 2025. Our LTSS platform, $4 billion strong. We really need to talk about that more.
We are one of the largest benefit managers of LTSS benefits in the country through organically and inorganically. It's a different business. It's high acuity, frail people taking care of their activities of daily living in their homes and skilled nursing facilities. It's a real specialized skill set, one that we are expert in. In testimony to that, states have trusted us with $4 billion of benefits under management. We believe we have the skills. We have our own behavioral networks, we have our own behavioral center of excellence, and we have a $4 billion LTSS platform to leverage. We think there's high opportunity in the carve-ins over the next number of years. Part of our strategy is to plant new flags. We've been successful doing so. We're two for three. We won Kentucky, w e won Nevada.
We did not win Oklahoma, although that bid was thrown out, will be re-procured. Here is the tale of the tape over the next number of years. There's $95 billion of Medicaid procurements occurring over the next five years. As you'll see on the following pages, we're not going to approach it all, w e're not going to attempt it all, but t here's a lot coming up for procurement here over the next number of years, and we have a demonstrated ability to write winning proposals, to have referenceability of our skill set and our competence in all these areas. As such, we believe this represents a significant growth opportunity, again, all the way up to 2025. We always evaluate the strength of the incumbency, how many awardees will they select? We need to be assured that we can build a low-cost, high-quality network.
Again, we like to look at the regulatory regime and make sure it's rate-friendly and friendly to managed care. We don't have to approach all of this. On the right side of the page, we show that only by approaching 40% of the opportunities, winning half of what we seek, and then at a 20% market share, it represents a $4 billion revenue opportunity in 2025. We have recent track record of success, and I would showcase our Nevada win. 630,000 members statewide will probably enjoy servicing 20% of them for a $400 million revenue opportunity, which is included in our 2022 revenue estimate. More importantly, what did we do to win? We got in early, w e worked the ground game, w e worked the relationships, w e worked the provider community, w e were known. We made charitable contributions in the state. We really worked the network hard.
For the most part, we showcased our skills. Our skills and all the things that are important to states, social determinants of health, opioid use disorder, LTSS, ABD, getting mobile units out into the field to find the homeless who are in desperate need of healthcare. We demonstrated all these capabilities and beat some of the best-in-class players and won a Nevada contract. $400 million is a good number. You can make money with $400 million-$500 million of revenue. More importantly, in Nevada, it gives us a ticket to play in LTSS and ABD, which is not yet in managed care. Big win for us. Again, we're two for three, and we have high hopes and expectations that we'll win more procurements here over the next number of years. Moving to Medicare.
Our core strategy on Medicare is to focus on low-income individuals. The core strategy on Medicare is to follow the Medicaid footprint, leverage the network we developed for Medicaid, leverage the broker network that we also have in place for Marketplace. It's really leveraging our high acuity care management skill sets and really being expert at the complex regulatory environment of managing Medicare. We are projecting an 11-13 organic growth rate of 11%-13% here in the foreseeable future, 7% of which is again, just being there, being in the footprint, watching the demographics grow membership and yields, which will probably be 3%, maybe 4%.
We apply our skills in developing our strategic initiatives, which as you can see on the right side of the page, would be to increase market share, fully penetrate our Medicaid service areas, and a new feature is introducing that low-income MAPD product that I referred to earlier. 7% coming from being in our footprint, 4%-6% coming from strategic initiatives, all adding up to an organic growth rate in Medicare of 11%-13%. Very quickly spinning through. Our market share and our current Medicare service areas, again, are large enough to be relevant. We're a player in the market. We have broker recognition. Our providers enjoy the volume flow that we give them, but our market shares are still low. They're lower than they should be, and by expanding our sales channels, expanding our provider networks. Our networks are probably a little too narrow.
They need to expand. Better job at member experience through call center and outreach. We believe we can grow our market share, which you can see on the left side of the page, and a 1% growth in market share is a $250 million revenue opportunity just in our D-SNP product. Also penetrating our Medicaid footprint. That's the strategy. Plant flags in Medicaid, create a footprint, develop a network, develop all the broker and distribution relationships you need, and then bring in our D-SNP product, now with an MAPD product, and begin to penetrate more fully our Medicaid footprint. You can see on the right side of the page that there's 500 counties where we have a Medicaid presence and do not yet have a D-SNP presence. 56 of those were filed for 2022.
If we just get to a 3% new county target market share, another $200 million of a 2025 revenue opportunity. First, penetrate Medicaid service areas, grow our market share, and thirdly, and pretty exciting, is we're going to double the size of our addressable market. If you remember that chart I showed you earlier, people income up and out of products all the time. Their financial circumstances make them ineligible for certain products, but they live in the same area. They're visiting the same facilities. A different chassis needs to be delivered. They can no longer take advantage of the D-SNP chassis. If we offer a standard MAPD product in these same geographic areas, we believe we double the size of the addressable market.
Just with a modest degree of success on the right side of the page, you can see that we believe this represents a $700 million opportunity by 2025. It's pure leverage. We have the administrative infrastructure to manage MAPD. We know how to price the business, w e have the broker relationships to sell it, and we have the provider networks on an expanded basis to handle it. Medicare strategy, increased penetration, increased market share, introduce a low-income MAPD product. Now, as I said a few moments ago, our strategy on Marketplace is slightly different. In Medicare and Medicaid, first and foremost, we're focused on growth, and we intend to hold on to the margin position that we've attained. In Marketplace, it's slightly inverted. We are targeting a certain margin, and we will grow only if that margin allows us to.
We are going to focus on margin over membership in the Marketplace business, given that the nature of the business creates more variability in the intended outcome. The market increased dramatically due to the increase in subsidies. We saw that, the whole market saw that, where now it's 15 million strong. It probably will flatten out unless they expand it again, but this is probably a 15 million-17 million member market in 2022. Where it goes beyond that, I think you'll see the federal government use the Marketplace as the residual mechanism to solve gaps in coverage that exist in other places. More members are now eligible for $0 plans. They've increased who's eligible, and the business has grown from 2021 to 2022.
It probably flattens here, and if they make the subsidies permanent, which they're likely to do, we think you'll see this market stay at 15 million-17 million over the foreseeable future. Brings us to the growth rate. You can see it's a little bit different here. We don't have a lot of strategic initiatives. We're going to focus on the highly subsidized population, we're going to focus on margins, and we're going to penetrate our Medicaid footprint. That's our strategy. We actually think that just being in the market allows us to grow at 5%. We'll try to increase market share, but we're going to do so in a very cautious way, and if that brings our growth rate down from what it could be to only 5%-8%, but we maintain that mid-single-digit pre-tax margin, we are very happy with that outcome.
Marketplace follows the Medicaid footprint. We service the working poor, we leverage our Medicaid network and our Medicaid network pricing, we use the same channels, the same broker, direct, and captive channels that we use in Medicaid for Marketplace. There's a lot of operational synergy and compatibility that takes place here. We believe that by penetrating our Medicaid service areas, the math would tell us we have 750 counties where we do not yet have Marketplace, where we have Medicaid. We filed 59 new counties for 2022, and at an average market share, another $1.5 billion of revenue opportunity in 2025. Again, focus on margins over membership, follow the Medicaid footprint, leverage your infrastructure, price it right, target mid-single digit pre-tax margins. Now, as I mentioned earlier, 1/3 of our revenue growth outlook of 13%-15% is derived from M&A.
The way we look at M&A in our company is it's a business unit. The way we conduct it and the way we execute it's every bit as good as organic growth. We're finding discrete properties, we're finding provider-owned plans, 501(c)(3)s plans that could survive and thrive under the Molina ownership, taking advantage of our broad infrastructure and our skill sets and the heavy investments we have made. We've done it all with excess cash flow created. We do not intend to have to go to the equity markets in order to do them. If you're using excess cash flow, no need to access the equity markets. The M&A math competes very easily on an accretion basis with new procurement opportunities. It's every bit as good as organic.
In fact, in some cases, on a cash flow basis over a three-year period, M&A is actually less expensive than a new procurement win. We've done our M&A at really attractive prices, w e've purchased some underperformers, and then we've unleashed our team, our operating team that turned around an entire company to open up their playbook and correct what is under-managed. We call that sweat equity accretion, applying the same operational playbook that we applied to the company to our M&A targets, making some of the underperformers we buy more highly performing. We've also built a great integration team that is dedicated to making sure that the members and providers are served well, that all of the accretion that we focused on and promised our shareholders is harvested and achieved.
Our M&A platform is a very important part of our growth strategy, and the way we look at it's a business unit, just as a new procurement, a proposal writing business unit, any other business unit in the company, their job is to find revenue priced attractively, stable revenue that has perpetuity of contract, bring it in, hand it to our operators to drive the accretion. Of course, that's all great theory, but we've done it. You can see the deals that we have announced, $8 billion of run rate revenue over the past couple of years. Mark will show you some more detail on these. Whether it's the YourCare Health Plan back in 2019, 2020, a really busy year with Magellan Complete Care, Passport Health Plan, and Affinity Health Plan, and then of course, the Cigna Texas Medicaid transaction in 2021.
We're really happy with the progress we've made, the track record we've created, and the synergy we're going to create, which I think right now is at about $3 of earnings per share, is very, very attractive and very value creating. Our acquisition history is sort of testimony to the fact that the theory that we developed years ago actually can and does work. Now, when you talk about sustaining profitable growth, you have to focus on the word profitable. We've maintained, and we assert that we can grow revenues at 13%-15% over the next number of years and maintain the margin profile that we've created. We say that with a great deal of confidence. We believe that our MCRs that we've currently achieved, we can hold serve on those MCRs. The rate environment is rational and reasonable.
We have a demonstrated ability to always make adjustments to our cost structure to correspond with whatever rates we are given or whatever rates we put into the market, and we are very comfortable that we can produce medical margins over time that are at the level we currently enjoy. Our G&A ratio will become more efficient, and will decrease over time. That's not by starving the business. We continue to invest in the business and the capabilities we need to continue growing. The operating leverage, if you have the discipline to harvest it, is significant. When you're growing revenues at 13%-15%, if you have the discipline to hold your fixed cost constant, you can decrease your G&A ratio by leverage while continuing to invest in the business.
Our margin management performance that we've developed and proven that we can attain historically, we have projected that can continue into the future. Now, I've shown this sort of wheel of managed care before. I remember doing it, almost six weeks into the job four years ago. It's the same wheel. These are managed care fundamentals. I always maintain that before you get into the glitz and glamour of artificial intelligence and predictive analytics, you have to be able to execute on the fundamentals of managed care in order to drive the margins that we drive, and the member experience and provider experience that wins new business. We have produced excellent results across every dimension of managed care. Many of you have called it Managed Care 101. We take no offense to that.
In fact, we're quite proud of it, that when it comes to risk adjustment, care management, utilization management, payment integrity routines, driving quality scores, we have subject matter experts we've recruited in place. We've increased and enhanced all of our business processes to make sure we have sustainable and lasting operational infrastructure that supports a view that these margins can be sustained. If you don't have the underlying infrastructure that sustains that performance, you're probably making a bet. That's not true here. We've actually executed and rebuilt many of these processes. medical economics, we're really good at now forecasting where medical costs are going. We've centralized utilization management to make it more homogenous, more conformed, and more consistent. We have centers of excellence. We spend a lot of money on behalf of our customer on behavioral pharmacy and LTSS.
We no longer have 15, 18 different operations all applying local flavor to the process. We've brought it nationally. We've implemented centers of excellence to where we bring best practices to all of those different operations around the country. From a medical cost management perspective, we believe we can always figure a way to keep our medical costs in line that the rates we receive from our customers or the rates we put into the market. We've invested a lot in the operating platform, and I've articulated this as a capital-light rent-own strategy. I maintain you don't have to own every component of your operation in order to have a value proposition that sells in the market.
In fact, this would show you that when it comes to differentiated capabilities, things that need to be proprietary, we think we're as good as anyone, whether it's care management, provider contracting, driving quality, or pricing and rating our business. The more commoditized an operation gets, you really have to think about the large-scale players, and whether they bring scale and capabilities that you don't have and couldn't enjoy given the size of our operation. Then of course, there's hybrid in the middle, where you do most of it internally, but for specialized and niche resources, you go to the outside. We have a portfolio of highly competent and differentiated capabilities that we do proprietarily, w e have great outsourced partners and vendors that bring niche capabilities, esoteric capabilities, and scale where we don't have it, all blended into a capital-light rent-own strategy that gives us an optimal operating platform.
We're quite proud of what we've created here, an operating platform that can support the growth rate that we've articulated here today. Well, that's the what. Now it's about the who. Who's doing this, and how do we do it? We have a proven operating model. It's worked over the past four years, will continue to work in the future, and t his is certainly not rocket science. It's actually fairly traditional, and it's old school. It's a throwback to some of the tried and true principles that work. Develop an operating model, set up a management process to monitor the operating model, and then an organizational design that supports it. We run hard and we run flat. We empower local decision-making to make sure that we're not setting edicts in the ivory tower that don't work locally. Everyone knows that managed care operates in a matrix.
Simplifying the matrix and making delegated authorities very clear, decision rights very clear, all very difficult in a widely decentralized operation. If you're disciplined about it, you can execute it. Lastly, we manage by the numbers. In managed care, where the margins where they are, every 50 basis points of trend needs to be understood and managed. Every $0.50 PMPM of medical costs needs to be understood and managed. If you don't focus on numbers that small, you can never make it in this business. We manage by the numbers in a very disciplined and rigorous way. A proven operating model that has sustained us for the past four years will sustain us in the future as we now enter our phase of sustainable profitable growth. Here's the lineup. Very proud of this team.
We have our operating council, which is what we call our virtual COO, with Jason, Mark, and Jim leading the way. Obviously, with Mark Keim coming in and helping them understand how their operating decisions affect the financials and the financial performance of the business. Our support resources down below with Carol and Larry and Jeff. This is a great team. This is only at the executive committee level. The second-line managers we have, the Senior Vice Presidents of the company, are as highly skilled and as determined as the top line. Our second line, we have great subject matter experts. We recruit well, we empower, we train, we reward. We've got a great team with 20 decades of experience that know exactly how to do this. They've done it before. We're going to continue to do it. It's a great team.
The last thing I'll mention is almost giving you a preview of Mark Keim's compelling financial profile. I think it's not as much appreciated as it should be in how the financial profile of this business and how attractive it is. The capital requirements are meager. At 8%-10% of revenue, the ROEs you can generate with 3%-4% margins are significant. When you lever those ROEs up, they're even more significant. You ought to be able to extract every dollar of earnings out of your operating subs and really focus on generating excess cash flow. Not having excess cash flow tied up in your subs, what we call lazy capital. Every single acquisition we've done has been through internally generated cash flow by having the discipline to focus on capital allocation, capital generation, and capital extraction.
Whether you look at the margins and the ROEs, look at how we've priced our acquisitions and buying them at very attractive rates, when you look at 13%-15% revenue growth, which translates to 15%-18% EPS growth, the financial characteristics of this industry and this business, but in particular, the way we've, I think, taken it to a new level, are quite attractive. Highly efficient capital generation and deployment of that capital is really the underpinning of our strategy. We'll wrap up with the investment thesis. We're in the right markets. These markets are high growth markets. The regulatory and political winds are at our back. The demographics are at our back. We can produce double-digit revenue growth at 13%-15%. We believe we can maintain the margin position we've crafted for ourselves today at 4%-5% on a pre-tax basis.
We know we can continue at these margins to generate the cash and cash flow that we need to fund our organic growth and our acquisition strategy without going to the capital markets. We have the proven management team to execute. Thanks for listening to me this morning. With that, I'll hand the mic over to Mark Keim to talk about our compelling financial profile. Mark?
Thanks, Joe, and g ood morning, everyone. Turning now to our compelling financial profile. I'm going to build on several of Joe's themes this morning by double-clicking on it and of course, going through the numbers. We'll talk a little bit about capital, w e'll dive into the acquisitions, w e'll talk about G&A, and finally, we'll talk more about 2021 guidance as well as our longer-term outlook. On capital, we have a very strong balance sheet. We currently have $1.4 billion of dry powder that's made up of about $400 million of excess cash at the parent and about a billion of debt capacity. What's more important is we repeat that every year. Each year, dividends to the parent closely follow net income, and that same net income becomes equity that we can lever in a very meaningful way to create another $700 million.
Each year, we're replenishing that $1.4 billion of capacity. At the growth rates Joe talked about, that capacity grows as well. Where does the capital go? We've been steadfast that organic growth is the highest and best use of our capital. Joe talked about levered ROEs of 60%, which are quite compelling. On the acquisition side, we can put capital to work growing our top line and drive ROEs on a levered basis of 20%. Finally, to the extent we have extra capital, we'll return that to shareholders through a highly tax-efficient mechanism called share repurchases. Between those three, we drive a lot of value, and we efficiently use our capital. I wanted to give you a little retrospective of where we've been with capital deployment. Back in 2018, when we were really starting the turnaround, we focused a lot on cleaning up our balance sheet.
You may recall we had some very expensive convertible bonds in our capital structure. We took those out in the early years, and with the growth rates we've seen since then, we're quite pleased we did. Now in 2020, as we turn to our growth, you can see we deployed a lot of capital to M&A. We continued with organic growth, and we also continued to do share buybacks at very attractive prices. Now in 2021, we're not done yet, but you can see the organic growth quite meaningful. Quite a lot of M&A, and we completed a buyback earlier in the year for some remaining capital. Now, I wanted to include a target allocation on this page because it really dovetails with what Joe talked about. On our annual capital generation, we would need about 25% of it to support the organic growth rates that Joe talked about.
8%-10% organic growth would require about a quarter of our capital generation. Joe also talked about 5% M&A growth. At the prices we might expect to pay, that could take about 50% of our annual capital generation. 25% could be used to delever the balance sheet, or more likely, would be used to buy back shares and drive additional shareholder value. Our capital strategy nicely ties to our growth expectations. Let's talk a little bit about the acquisitions. We've done five over the last two years, totaling $8 billion of revenue. I wanted to take a moment on the purchase price and show you the purchase prices two ways. One, as we've announced them, which very often relied on the deal structure, or on a more apples-to-apples basis, fully loaded with regulatory capital, showing you the revenue multiple.
You can see the range, some are higher, some are lower, but on average, 22% of revenue across these deals. Within those deals, we estimate at least $3 of EPS. A dollar of that is in our current P&L, and $2 or more will emerge over the next year or two in what we call the embedded earnings, and I'll talk more about that in a moment. As Joe mentioned, we have expert M&A teams, and just as importantly, expert integration teams. They're constantly looking at more than 300 government health plans, mostly Medicaid, but they range from not-for-profits, carve-outs, turnarounds, provider-owned plans, and most recently, startups and entrepreneurial efforts. They're looking at them for strategic fit. They're looking at them for actionability. At any given time, they have deep relationships and dialogues going with a few likely targets.
We never make commitments, but we're always hopeful that the next few are in the hopper. Margin management is a really important part of our formula. Joe talked a little bit earlier about medical expense management. I'm going to do the other side of it, which is the G&A expense management. We learned long ago that transparency is critical on G&A expense management. You can't manage what you don't see. One of the things we learned earlier is that we had a meaningful component of fixed costs at the parent. The way to manage fixed costs is to keep them fixed, and we do that through transparency and discipline. On the variable side, the key here is to understand the drivers of the variable cost, and once again, transparency and discipline around keeping those drivers in the efficient places.
If you do this right, especially in the presence of the kind of growth rates that Joe talked about, meaningful value falls out. Where does it go? The lion's share of it will go to reinvest in our businesses, making sure that our capabilities are world-class, that we're keeping up with competitors, and in many cases, exceeding competitors' capabilities. Joe also talked about how this formula can be used as a bit of a hedge against medical management variation. It's nice to have value created here, so that up and down years on medical management, we can help to even out the overall company performance. Finally, anytime we can, we'll let that operating leverage fall to the bottom line, driving margin, driving growth rates. Turning to 2021 guidance.
As Joe mentioned at the outset today, we'll be increasing guidance on total revenue and premium revenue by a billion. It's driven by two areas, Medicaid and Marketplace. On the Medicaid side, you may recall we started the year with 500,000 members gained since the start of the pandemic. We expect that that will grow to 750,000 by the end of the year. That increase across the year will push a lot of revenue into the back half of our year. That's the lion's share of the the billion that we're raising. Now separately, just in July and August alone, we added 50,000 members to Marketplace through the special enrollment period. Looking at the back half of the year revenues on those members, that's probably $100 million of the the billion we're raising. Now in retrospect, were we a little conservative with revenue guidance?
Possibly, with the uncertainties in these businesses, it's more prudent to have waited, and now with the visibility we have, to add them into our current outlook. Looking at EPS, we're seeing two drivers in our guidance. On the one hand, the additional revenue equates to about $0.50 a share of incremental EPS. However, we saw a very hot month in August on COVID, only partially offset by the non-COVID utilization. As such, we're going to increase our full year guidance for the net effect of COVID by $0.50. All told, we'll confirm EPS guidance for the year of no less than $13.25. For those of you making the models, I'd encourage you to level your expectations between Q3 and Q4. I know in other years, seasonally Q3 can act a little better than Q4.
With the uniqueness of this year, and COVID in particular, I think we'll see flat performance between Q3 and Q4. We've talked in the past about the embedded earnings power, and just a word on this. That's the components that are currently in our business that haven't quite emerged in EPS, yet the actions have been put in place. We currently estimate $6 of embedded earnings power that we would expect to emerge either next year or the year after. I mentioned the net effect of COVID going from $2.50 to $3. The others are unchanged. Medicare risk scores we would expect to emerge next year. The acquisitions at portfolio margin are really the sum of four announced acquisitions, all getting to their ultimate portfolio margins. $6 not in our earnings this year that we would expect to emerge over the next year or two.
I want to take a moment on 2022 premium outlook. Right off the top, I want to remind you this is not guidance. What we wanted to do here is just lay out the building blocks so those of you who are building your models have something to start with, and you have an idea of where 2022 may start to shape up. Starting with 2021 premium guidance of $26 billion, we'll add in the two announced but not yet closed deals, Cigna Texas Medicaid and Affinity. I'm expecting to close Affinity in late October, and Cigna Texas right around the end of the year. Turning to organic growth, 4% in our footprint, which on $26 billion is about a billion dollars of organic growth. We'll start to announce these strategic initiatives as they come together, but Joe introduced the first one today.
The Nevada RFP win should contribute about $400 million to our 2022 growth rate. Finally, a headwind. Redetermination, I expect, is about a half a billion dollar headwind next year, and I'll talk more about that in a moment. All told, $3 billion of initial building blocks, taking $26 billion-$29 billion. That's about 12%. What we have yet to stack onto this is Marketplace open enrollment for the next year. The additional strategic initiatives, many of which Joe talked about in his comments this morning. Finally, any acquisitions that we hope to announce that could affect 2022. Again, not guidance, the initial building blocks for us to start to shape up the year. On redetermination. Remember I talked about 500,000 members gained since the start of the pandemic, growing to 750,000.
You have to look at the member month math to think about the revenue implication, but if you do, you'll find about $2.9 billion in our current P&L associated with that bolus of members. Our current assumption is that the public health emergency ends in January. If that's the case, CMS has issued instructions to states to be done with redeterminations within one year. It remains to be seen if they can do that. Remember, this would be 80 million Medicaid members all needing to go through redetermination to assign eligibility. That's a tall order, but our assumptions here are that that's what happens. All 750 of our members would go through eligibility check within one year. Our assumption is a year later, we would keep half of them, or 375,000 members. What's driving that? Couple things. We think unemployment will sustain for a while.
It's high now. It will sustain high for a while, and d on't forget the vast majority of unemployment is from the low-income sector. That will certainly be a part of this outlook. The other thing, Joe showed a chart early in his presentation, which showed that each time the country goes through a crisis, Medicaid rolls expand, but yet never quite return to the pre-crisis levels. We expect to see a similar dynamic here. If we fall to 375,000 of this bolus of members, again, you have to look at the member month math. 8.2 member months fall to 6.7. More importantly, the revenue equivalent is 2.4. That's a half a billion dollar headwind for 2022. If that 375,000 sustains, the full run rate then falls to $1.6 billion, or another $800 million headwind.
Putting it all together, Joe talked about how our guidance on the top line gets us to $42 billion of revenue by 2025. Here you can see the components, 4% from the core footprint, 4%-6% from the strategic initiatives, and 5% from the acquisitions. $4 billion, $5 billion, and $5 billion, all contributing in a very balanced way to our top-line growth targets. Just for full transparency, I've added in 2023 that remaining component of redetermination, the $800 million, just so you have a full picture of how we see revenues playing out over the longer term. 14% at the midpoint, growing to $42 billion in revenues. I did want to double click on the growth rates. Joe talked in his comments about the portfolio having a 4% core eligibles and yield, and then our strategic initiatives adding 4%-6% growth on top of that.
I did want to show you just a little bit of the math to see how we put it all together. Let's take Medicaid, for instance. Joe talked about four initiatives that total $7.6 billion of value by 2025. This is a little bit of a 'what would you have to believe' exercise. If you were to discount that 7.6 by 40%-60% and spread it over the years to 2025, you would get an annual CAGR, or an annual benefit, of 4%-6%. Combining the footprint with the strategic initiatives, you get the 8%-10%. Same exercise for Medicare, same exercise for Marketplace. Now on the company total, our initiative's more than $10 billion. Just take half of them, once again, spread over the period to 2025. That's the formula for our growth expectations, rooted in some very detailed strategic initiatives.
Putting it all together, we're guiding to 15%-18% long-term EPS growth. It starts with revenue growth, 13%-15%. Remember, that's the 8%-10% organic plus 5% M&A. We talked about operating leverage, how it could be a hedge, or maybe some falls to the bottom line to grow our margins and increase our growth rate. We talked through capital, how once we're done with organic and M&A, there's excess capital that we can use to continue to drive shareholder value through repurchases. All told, 15%-18%, numbers that really drive the culmination of the discussion we've had today and the culmination of our strategic initiatives. We're anxious to get to your questions. Operator, this concludes my part of the presentation.
Thank you. Our first question comes from A.J. Rice with Credit Suisse. Please go ahead.
Hi, everybody, and thanks for all the information today. First, I know Marketplace is small relative to the Medicaid, for sure. Nevertheless, you're making an assumption that you get back to mid-single-digit margins going forward. There's a lot of crosscurrents this year. We've got the increased subsidies, we've got the COVID impact, the extended open enrollment that's allowed people to come in. We've also got, it seems like, increased competition as some people that had exited are coming back. I guess, just as you wade through all those, how confident? It seems like there still is a fair amount of range of outcomes there, but maybe just, is there any way to flesh out more how you're confident it sort of settles out at that mid-single-digit margin rate?
Sure, A.J. We're really confident, very confident, that we can land the margins pre-tax in mid-single digit range. First and foremost, if you wanted to just oversimplify it, we've had 500 basis points of MCR pressure in each of the first two quarters of the year. If you just remove that, we're back into mid-single digit. As you then articulated, we also believe that the special enrollment period created some adverse selection. It always does. It likely did here. We'll report on that in the next two quarters if we continue to see it. With the special enrollment period perhaps creating a little bit of a drag for a negative selection bias and 500 basis points of COVID in each of the first two quarters, if you pro forma just for those two phenomenon, you're back into mid-single digits.
The competitors, we respect them all, but we're servicing a very select segment of the Marketplace population. We are leveraging our Medicaid networks, our Medicaid network pricing to service the working poor who are operating in the very highly subsidized end of the Marketplace business, where only a few players are targeting. We're very confident that we can grow the business at a single-digit rate and attain a mid-single-digit pre-tax margin.
Okay, that's great. Maybe just one follow-up on the Medicaid rates, I appreciate your comments there. You feel those are trending in a good area. I guess the wild card continues to be what do you anticipate for COVID net impact on the carries into 2022, and how are the states thinking about that as you have your discussions with them? Does that create any wider range of potential outcomes, or are you so into the risk corridors, for example, in many states, even if the utilization rates are a little higher, you're still not going to be that impact? Can you give us some flavor on that?
Sure. As you go through rate discussions with the various states, as I said before, it's always an interesting debate about what's the credible baseline and what's the trend off that baseline. In many cases, we're using 2019. It was pre-COVID. It's the purest data point we have in the recent past. Trend that forward for two years, and you've now established a post-COVID baseline that's very credible. Those are the types of conversations that are taking place. When it comes to the corridors, we've articulated the ones that have already been eliminated. There's a few that haven't been decided yet, and actually a couple that will carry over into part of next year. As I've said many times, it would have been nice if all we were giving back through the corridors was the benefit of utilization suppression.
The fact that we are a very efficient operator in all of our markets, the fact that we have best-in-class margins, we know we're giving up performance through those corridors, where in the future, we will get to keep that performance and get back to the target margins that we've articulated.
Okay, great. Thanks a lot.
All right, A.J. Thank you.
Our next question comes from Justin Lake with Wolfe Research. Please go ahead.
Thanks, g ood morning. First question, I wanted to touch on the $6 of embedded earnings power on slide 62. You talked about this kind of coming to shareholders over the next year or two. I was hoping you can go through these three pieces, right? The COVID, the risk scores, and the margin. Give us an idea of how we should think about that as 2022 relative to how much of that should be expected in 2023.
Sure. Well, again, we'll stop short of guidance and give you an outlook of how one thinks about those manifesting themselves in our earnings stream over time. I'm going to kick it to Mark to take you through what it might look like over the next two years.
Great. Justin, as we mentioned, it's about $6 of embedded earnings power. Just to set the stage for everyone, that was $3 of net effect of COVID, a dollar of Medicare, and then $2 among four acquisitions. Medicare risk scores, we've been pretty clear that we expect to have that in 2022, both because we've done a much better job of risk scoring in this year for next year. Also, as Joe's been clear in the past, our pricing also now reflects our expectations, so I think you can score that dollar in 2022. On the acquisitions, I'd break them into two categories, the $2. The first dollar is the announced and closed acquisitions. Part of their performance is already in our numbers, and I would expect the other dollar to appear next year. It usually takes us about two years to get acquisitions to our portfolio average.
A dollar of that $2 should appear next year. The other dollar is the deals that we've announced but not closed. Let's take half and put it in 2022, and maybe the second half in 2023. On the net effect of COVID, a lot of us are thinking about that these days. We're carrying $3. Remember what's in that net effect of COVID. It's the cost of the corridors. It's any benefit of curtailment on utilization. Finally, it's the direct cost of COVID itself. We've got a few dynamics on each one of those. In particular, the corridors, as Joe mentioned, four states have already turned them off. We expect a few more will, but e ven the ones that do will have, because of fiscal years, some of that overlap from 2021 into 2022. The complete wild card, where does COVID itself go?
We have the Delta variant, w e certainly had a little hot spot here in August. Where does that go? We're all going to have to think good and hard about how we layer that into our projections for next year. Of the $3, I think you can pick that apart and probably make some of your own assumptions as we do as well.
Okay. Appreciate the color there. Then just wanted to go back and follow up on the question regarding the exchanges. At this point, you've probably seen some of how the competitive dynamics are looking in terms of peers entering your market. The margins, it would seem to be under your control, but the market share dynamics, you set your price. We'll see how others do that. Have you seen pricing in your markets, and can you give us an idea of what you think is going on competitively given the number of new entrants out there?
Sure. Obviously, we've seen very little in terms of exact pricing information, but w hat we have seen, and o f course, the chatter in the broker community synthesizing all that information. We think we're well-positioned next year. As I said, we're actually willing to sacrifice membership to make sure that our pricing was right. We priced off of the high point of medical cost of 2021 to make sure that we had no curtailment built in for next year in terms of our forward trend, and that we had some expectation of the continuation of COVID direct. We put reasonable prices in. We believe they're very competitive. This will continue to be an important part of the franchise, but I want to be clear on the point. We targeted mid-single-digit pre-tax margins, and we're going to let the membership fall where it may.
Got it. Appreciate all the color. Thanks again.
Our next question comes from Josh Raskin with Nephron Research. Please go ahead.
Hi, t hanks. Good morning. I guess I want to contrast these long-term growth rates against the operations. Your revenue and EPS growth targets are now the highest in the industry. You laid out very well, I thought, the specific building blocks to that. From an operational perspective, you talk a little bit about the G&A functions perhaps viewed as commoditized, right? There's some that are outsourced, some that are hybrid outsourced and internal, et cetera. I guess I'm just trying to figure out the main differentiation in the business model. What is it that's allowing for Molina to take market share, to get the M&As out of it, which is the core market share, right? Because everybody you're competing with is a strong competitor, and they're improving every year. It can't just be sort of we're doing things a little bit better.
I just want to understand what it is, what's the secret sauce from an operating perspective.
Well, Josh, as you know, I've said many times, let's just focus on Medicaid for the moment. Medicaid's an interesting business in that you're a rate taker. That rate is set by the market, and w ith market shares 25, 20, sometimes even 15%, we're not setting the rate. More inefficient competitors are. When we get a rate that's loaded with a cost structure that is perhaps inflated, and we enjoy a better cost structure, it allows us to enjoy the margins that we've achieved. There is no secret sauce. This is raw execution on every dimension of managed care. We have developed what we believe are best-in-class capabilities. We didn't have a proposal writing unit four years ago. We have a very good one now.
We didn't have on-the-ground business development efforts and a government affairs organization that reached out into the communities that we want to serve, developing those relationships. It's no secret sauce. It really is execution on all of the dimensions of managed care, rebuilding every operation of the company technologically and from a business process point of view, and populating it with best-in-class talent. Don't mean to disappoint you with an answer that's not terribly exciting, but that's what we've done here over the past couple years, and that's what we think supports the strategy. As Mark said, we have taken a portion of the fixed cost leverage that we're going to enjoy and have reinvested it in the business to make sure our capabilities stay compatible with what our clients are looking for.
Our clients continue to look for more and more social determinants of health, behavioral skills focusing on OUD, and the like. We continue to invest in the business. We'll drop some of that into the margin. We continue to invest in the business, and we believe that we've repaired a lot of the infrastructure that allows us to generate these results.
I think boring probably gets higher valuation. I don't think you want to apologize for that. That makes perfect sense. It's not secret sauce, to your point, it's t he strategic initiatives are really around executing better. My follow-up, just on the M&A side, obviously a pretty important component to the long-term growth. I know we could ask what gives you confidence you don't have that. What happens if the market gets less rational? What if you can't buy these plans, these sort of fixer-uppers? What if others are interested in that? How does that change your strategy?
Well, we don't think it will, actually, because when you're trying to grow off a $27 billion base, half a billion dollars matters, and y ou can make money at a half a billion dollars. We think the properties that we're looking for aren't on the radar screen of some of the biggest competitors. Some of them are not even auctions, t hey're proprietary deal flow that our M&A team has created through developing relationships. I think once you get involved in frothy auctions, obviously prices get bid up. On some of the properties we're looking at, they're so discreet, so contained locally, over 300 of them, that a lot of the bigger players are not trolling for them, but we are.
I know the pipeline is very robust right now, and we have a lot of confidence that we'll be able to harvest some of those opportunities and fulfill that M&A growth rate that we've shown you earlier today.
Perfect. Thanks.
Our next question comes from Kevin Fischbeck with Bank of America. Please go ahead.
Great. Thanks. I appreciate you guys sizing the redeterminations headwind there. I guess there's just been a lot of questions around what the margin implications of that is, either because losing membership either comes off at incremental margin and/or anyone who's redetermined is probably a better health risk and a lower cost, and therefore potentially a higher margin. Just wanted to think more about how you think about the EPS or the earnings implications of the redetermination headwinds.
Sure, Kevin, and I'll turn it over to Mark, I'll make some framing comments. There is some evidence, but it's not as compelling as one would think, that the added membership is lower acuity than the average membership. There's some evidence of that, but it's not as stark and compelling as one might think. Second point is many of the states adjusted rates midterm to take account for the higher membership and what they perceive to be lower acuity. Thirdly, and probably most dramatically, sans all of that, the corridors capture a lot of any performance that you would have enjoyed due to lower acuity, was significantly captured in many of these corridors. We actually believe that one should think about the margin implications of the redetermination as being the portfolio average and not something north of that.
Yeah. Kevin, our medical economics team's done a pretty good job of looking within Medicaid on those redetermination members. Again, we never know exactly who they are, but we have some good ideas. Clearly in ABD, there hasn't been an impact. Even on expansion, there really hasn't been an excess margin impact. Really where we've seen a little bit is TANF, and as Joe mentioned, maybe not as much as you might think. With the corridors, any excess profit has really been constrained in the current year, and I would think as those members potentially come off next year, they would come off then at roughly the portfolio average.
Okay, thanks. I guess outside of redeterminations, you give this long-term guidance, there really aren't any headwinds that you guys are talking about. You have carve-ins, you don't have carve-outs. You have new RFPs, you don't seem to be assuming any losses on re-procurement. It sounds like maybe you are assuming that the subsidies stay in. I guess with A, how are you thinking about some of these headwinds, and when you think about the risks to this long-term trajectory, I guess, where do you see the biggest risks?
Well, you're right in saying that we assumed that we re-procure any contract that comes up for procurement in the next number of years, that we will be successful in re-procuring it. We model it that way because we believe it. Texas is likely to re-procure, w e have a very strong position in the state of Texas, o ur Cigna acquisition will be approved, which is testimony to our relationship with the state, and we have a very strong position in California. That would be the other one that is likely coming up for re-procurement. The reason we didn't put a decrement in our forecast is we have high confidence in re-procuring everything that's likely to come up for re-procurement in the next couple of years. Anything to add?
I think that's it.
I guess, is there anything else that you would point to as a potential headwind to that long-term growth trajectory that you're worried about or should be focused on?
I think the other point to make is if you go back and look at the model, very highly summarized model that Mark put together, we heavily discounted. All the revenue opportunities we have, we heavily discounted. There's $95 billion of re-procurement coming into the market over the next number of years in new states. We said we're only going to chase half of it or win half of it and end up with 20% market share. I think we've sufficiently discounted the total size of the revenue opportunity to basically reverse engineer a 13%-50% growth rate to get to $42 billion. Yeah, there are headwinds here and there, sure. We think we've got it captured in the way we put together our projection.
Great, thanks.
Our next question comes from Matthew Borsch with BMO Capital Markets. Please go ahead.
Yes. Could I just ask about as you characterize these multi-year growth rates and what they imply for next year, how do we distinguish between the specific ranges and when you say it is not intended as guidance? I am just trying to sort of shade the difference between those two things.
Sure. Matt, when I laid out the initial premium revenue outlook for 2022, again, it was the building blocks, because we're still putting things together. We would never give guidance on the next year. Sitting here in September, that's a much later in the year event. We are certainly seeing and have line of sight to the major components. Again, I point at you to $3 billion of components, but we're not done yet. We're setting the table with a number of strategic initiatives. I'm quite hopeful that the M&A machine keeps rolling. We'll stack a number of things on there. It's certainly not guidance. Guidance would be what we think fully happens. We're at a point now where we can just lay out the building blocks, and hopefully if you're looking to build a model, you'll stack on top some of your own assumptions.
Well, that's great. If I could just add a follow-up to that. How do we think about the $6 of additional embedded earnings power relative to the growth rates that you laid out for EPS of 15%-18%? Does that include some of that? Exclude it? Is it half plate or?
Sure. Matt, the guidance that we've given and the growth rates we've given are off a 2022 expectation. Obviously, we gave you the building blocks of the revenue expectation for next year. We gave you some of the building blocks for actually the earnings for 2022 on how much embedded earnings is likely to emerge next year. Those growth rates are off of 2022, the building blocks of which we gave you for revenue, and some of the componentry we gave you in the form of embedded earnings. It's off a 2022 baseline.
Okay. Thank you.
Our next question comes from Michael Ha with Morgan Stanley. Please go ahead.
Hi, t hank you. Question about MA growth rate. As I look at your previous Investor Day deck, I'm seeing 14%-16% growth rate, and today it looks like 11%-13%. Is the decline in targeted growth rate indicative of potential policy-related headwinds or anything else you can comment on that?
I want to make sure, Michael, I captured your question. Were you referring to Medicare?
Right. MA, Medicare Advantage.
Right. Well, bear in mind that when you look at our Medicare business today, it is 6 MMP demonstrations, and the rest of it is purely D-SNP. We have a smattering of traditional MA. We're focused on high acuity, low-income populations. You really can't look at the growth rates that the broad MAPD market looks at. We're looking at executing our D-SNP strategy in our Medicaid footprint. Obviously, the MMP business is sort of a closed block. Those members will convert to a fully integrated product once the demonstrations are terminated. Right now, that entire growth rate is off a block of business, D-SNP, that represents slightly less than half of the Medicare total.
Got it, t hank you. Just one more question. As I take a step back and just look at one of the big thematic long-term growth drivers for Medicaid, LTSS carve-in. You mentioned today California, Kentucky, South Carolina, they've begun exploring carve-in, and how 15% market share could represent a billion revenue in 2025. As we think about that opportunity developing, and how are those conversations with states, are there any common threads in terms of points of hesitation that these states are having?
Sure. In my view, the largest hesitancy has to do with skilled nursing facilities and nursing homes lobbying hard to keep fee-for-service ongoing. They would have every motivation to want to see a fee-for-service environment and not a managed environment. It's been proven time and time again in every state where this has been integrated and carved in, the states save money. LTSS is becoming a major budget item in many of our states. The fact that managed care has proven it can drive down the monthly cost of LTSS, I think over time, the pushback by the skilled nursing facility and the nursing home lobby sort of loses its steam, and more of this goes into managed care. That's the assumption we're making in our strategy, and the conversations with the various states are headed in that direction.
Thank you.
Our next question comes from Scott Fidel with Stephens. Please go ahead.
Hi, t hanks. Good morning. First question, just a follow-up just on the Marketplace margins. If you could give us the initial thinking or the thinking now in the updated 2021 outlook on what you're thinking on Marketplace margins for this year. I think the last update you had talked about breakeven for 2021 in terms of the baseline, but I know you did call out seeing some more utilization heat in the third quarter just from the Delta variant. Interested in where that sort of breakeven has moved to now in terms of your thinking.
Well, Scott, we're not going to advance the discussion for the third quarter, but the majority of the variance between what we priced for and expected and what we've experienced is due to the 500 basis points of direct COVID pressure we experienced in each of the first two quarters. The answer to your question is not knowable because I would tell you that because that business seems to have attracted many members who obviously are COVID vulnerable, that your answer is going to rely on how much COVID direct do we have for the balance of the year in the Marketplace. We've seen, as many of the players in the market have seen, COVID direct costs were high in the month of August. They have begun to moderate, but it all follows the geography, it follows the vaccination rate, it follows open economies. Mississippi, Texas, Florida, parts of California.
I think the variable there in not being able to make a call now is we need to see how the business reacts to the COVID infection rate for the balance of the year.
Fair enough. Just on my follow-up question, just interested on how recontracting with providers has been going and maybe an update on sort of how much has now been completed for 2022 and 2023. Just specifically, just interested if there's been any changes in the negotiations with providers, just sort of as a result of the pandemic. One thing a lot of us are tracking are just some of the wage inflation pressures that some providers are experiencing due to labor and staffing pressure. I'm just interested if that's been feeding into your negotiations with providers or whether that really hasn't been a factor. Thanks.
Sure, Scott. There's a number of responses to your question. Number one, many of our state customers actually either required us or encouraged us to look at our provider relationships. I remember in one instance, we were paying on a fee-for-service basis. We converted it to capitation in the middle of the year to make sure that providers were getting funded. As long as you're in the corridor, who gets the money actually doesn't matter. In many cases, we relaxed UM standards, e ither we were compelled to, required to, or we just did. In many cases, we relaxed payment integrity routines to make sure providers were getting more fully paid. We've treated our provider partners very fairly during this whole process.
They've recognized it, I would say that it's not changed the nature of the relationship at all in terms of them being more difficult and more demanding in their negotiations. Our provider relationships are very sound, the fact that we responded so well to the lack of utilization during the pandemic, I think that augurs well for a continued fine relationship. Many of those relaxations were required to do as a result of state mandates. Many of them we did on our own because we thought it was the right thing to do. I think that set us up for a really, really good relationship with many of our provider partners.
Okay, thank you.
Our next question comes from Steven Valiquette with Barclays. Please go ahead.
Great, t hanks and g ood morning, everybody. Just regarding the new state Medicaid RFP opportunities on slides 29 and 30. You mentioned that you'll likely pursue roughly 40% of that $95 billion of new state Medicaid RFPs through 2025. Are you at liberty to provide just any more color around some of the more obvious states that Molina would likely pursue from that list of states on slide 29? Any color on certain states that you wouldn't pursue for whatever reason, that'd be great as well. Maybe you're just keeping all that close to the vest, but I'm just curious to get more color on some of those states on slide 29. Thanks.
Steven, thanks for your question, but it is our practice not to preannounce where we're bidding. We actually believe that actually helps competitors respond in a way that they may not, and actually compromises the quality of our bid. We never actually preannounce where we're going. Once the bids are submitted and the quiet period starts, if we're on an earnings call, we can certainly discuss that. We pick those percentages of flow-through, based on past experience and based on looking at this map. While I can't tell you we're bidding here and not bidding there, those percentages, participating in half the relationships and winning half of them, was all structured around our view of where we're likely to play and where we're not likely to play. We laid out our criteria, strength of the incumbency.
Are they reducing the size of the panel so more new players have to win in order to fulfill that gap? We look at all those criteria. We play where we can win, and being two for three so far, I think we're in good shape on this dimension of our strategy. Unfortunately, we have a policy, and I think it's a good one, of not preannouncing where we're going to go.
Okay. One other real quick follow-up. I apologize if I missed this, but how should we think about the margin profile of Nevada Medicaid in 2022 specifically, and then longer term beyond that? Thanks.
In managed Medicaid, we believe we're in a really good zone with our margins. As I said, when you're taking a rate where 75%-80% of the market share has a cost structure that is higher than your cost structure, we get the benefit of that in the rate. We operate more efficiently and therefore our margins tend to be higher than many of our competitors, including the not-for-profits. In the 3%-4% zone where we're currently performing in Medicaid is certainly our projection for the future. Stable rate environment, ability to manage medical costs pursuant to the rate you receive, and the fact that we're more efficient than many of the operators in the state that benefits the rates, and the margin falls through to our benefit.
Okay, all right g ot it. Thanks.
Our next question comes from Steve Baxter with Wells Fargo. Please go ahead.
Hi, t hanks for the question. Appreciate you guys showing all your work and thinking on the outlook here. Just wanted to ask about the revenue bridge that you put out there for 2022. On the billion dollars of organic growth, just wanted to ask how much of that is Medicare versus Medicaid. I guess just big picture, when you net the organic growth together with the redetermination. Just a little surprised to think that you might have organic revenue growth in your markets looking into next year. Would love to just hear a little bit more about what informs the view on the billion dollars.
Sure. Steve, the billion dollars is a weighted average 4% across all the businesses. You can sort of see our working assumption on one of those last couple of pages I had. I believe it's page 66, that just shows you what our core footprint expectation is. That's separate from Redetermination. We treat them quite distinctly. The dynamics of the market will continue even while Redetermination does what it does. That 4% is a weighted average across our businesses, and again, that's the the billion bucks based on 2026 starting point.
Got it. Thanks. Then I was hoping you could talk a little bit about your progress expanding market share in your Medicaid bid. It's been a focus for the company, I think, over the past few years. I think the 9% number you put out there, I'm not sure if that's changed or not. It'd be great to just hear your perspective on that and whether there's any confounding numbers inside of that we should think about when we're measuring progress.
Well, we certainly measure it based on the information we get from the states, and we do have some successes here. South Carolina, Mississippi, even in Washington, where we have 50% market share, based on our name recognition, our highly branded position, the fact that Medicaid and Molina are actually synonymous in that state means we're a high choice plan. We have some very good and relevant successes here over the past year or so by focusing on increasing our quality scores, making sure we put in a whole business process for reaching out to members during the redetermination process. We're doing a much better job through the MolinaCares Accord of making sure we're participating in community events and charitable contributions to create that aura of community participation.
We have some very good data points on market shares that we have grown over the past couple of years. The proof will be in whether we can grow revenue and whether that's a meaningful component of our growth rate. Our early success across those four dimensions, volunteer and involuntary inflows, and voluntary and involuntary outflows, has certainly, in the early stages of execution, worked well for us.
Thanks. I guess just one last question. Just, again, this isn't a necessarily massive impact on the 2022 bridge, but since we're already on that topic, I would love to just hear a little bit about how you guys put together the thinking on Nevada. I think there's been another entrant into that state maybe a couple of years ago, and I think even now, a couple of years down the pike, they're still below some of those revenue numbers you're thinking about for next year. Is there anything that's changed about the state's approach in terms of how they're allocating members that inform the approach on the $400 million? Thank you.
I think, we've given you a steady state. How they implement is certainly still not yet been determined. From what we understand, they will allocate members equally amongst the four players, there will be an open enrollment period where members could switch. We could start out with slightly less than the $400 million that we've put forward here, but o ver time, there's no reason why we shouldn't have equal market share with the rest of the four players. Early on, they will give members, after allocating members to a plan, they will give them the opportunity to switch plans if they choose to. If they choose to switch out of Molina, we won't capture them. We think that our revenue estimate's a pretty good one, $400 million.
Steve, it's Mark. Just as a general matter, these states have a real interest in making sure that all their players are scale, because sub-scale players obviously struggle. Through the initial assignments as well as ongoing auto-assigns, most states keep a real eye on that just to make sure that each of their players are attaining scale and efficiency for the best service.
Not to put another point on the same question, but it's important, and we made the point earlier. We have our eye on the big prize. While TANF is very interesting in the state of Nevada, LTSS and ABD are not yet in managed care. We have a strong belief, real strong belief, that those products and businesses and benefits will be attached to the Medicaid contracts.
Our next question comes from Dave Windley with Jefferies. Please go ahead.
Hi, t hanks. Good morning, and thanks to both of you for the very clear information. My first question is back to the $6, and specifically in the $3, I'm wondering, Joe, are you including the full risk corridor payments or only the portion that you called out as differential performance give back in your net COVID estimate of $3?
No. Our COVID estimate, the corridor component of our COVID estimate includes every dollar that we will pay into the corridor if the corridor was established as a result of the pandemic.
Okay.
Please.
Sorry, go ahead.
No, please, go ahead.
I was just going to say, one would assume that some of that risk corridor payment, maybe a lot of it, would be replaced by medical utilization in a normal environment, right? Am I not thinking about that correctly?
You're thinking about it exactly correctly. In fact, we do our own estimates of what COVID is actually costing us in the medical cost line, and I can absolutely assure you we're paying back through the corridors efficiencies that we've worked hard over attaining over the last 2 years. When the corridor disappears, that benefit, that earnings stream comes back to us. That's exactly the way to think about it.
Okay. Separate topic, o n your assumptions around, I'm sorry, excuse me, Medicaid redetermination, the 50%, you talked about, in general terms, that the membership tends to be sticky, and won't go back to where it was pre-pandemic. Were there precedents or analyses that supported the 50% choice? I'm just wondering what might have landed on the 50%.
Well, it sounds like it was just chosen out of convenience, but we actually developed some models to make sure that we were comfortable with it. If you look at the in-state unemployment levels, you look at the low-wage service economies in our various states. We have a lot of macroeconomic data on how people are thinking about the reservation wage, which has increased, the wage at which somebody chooses to go back to work. We've looked at all of that data, and t he most compelling data point was looking at every recession for the past 20 or 30 years, watching the Medicaid rolls spike and post-crisis, post-financial crisis, recovery of the economy, the rolls stayed higher than they were pre-crisis. We modeled a lot of that.
It wasn't picked for convenience, but we actually believe Medicaid membership rolls will be higher post-pandemic than they were pre-pandemic, and of the 750,000 members that we grew organically during the crisis, we will keep half of them.
Great
Macro models that developed the estimate.
Excellent, t hank you. Thanks for the answers.
Our next question comes from Gary Taylor with TD Cowen. Please go ahead.
Hey, good morning, guys. Thanks. A quick clarification, then a question. On that slide 29, where you show the $95 million of procurement opportunities in states that would be new for Molina, is that entirely visible reprocurement? Obviously new market opportunity for Molina, not new market opportunity for the market, or is there some visible new population procurement opportunity in that $95 billion?
Gary, the only one that comes to mind that's a new opportunity is Oklahoma. If you recall, Oklahoma was reprocured last year, but due to some technicalities, the bids were canceled, and they're going to rebid again. That is currently not a managed care state and is going managed care. I'm looking at the map here. All the other states, I believe, are reprocurements, but that one sticks out as being fee-for-service that's going managed, and it'll be reprocured, we think, for the 2023 contract year.
Got it. Thank you. My other question is on the potential for closing the Medicaid coverage gap, a two-part question. One, you guys highlight three million lives in just your five incumbent states. I've seen, from various sources, sizing a two million life opportunity kind of across the country. I'm wondering if it's just different data, different views on that, if your three million maybe includes just other eligibles in the state that haven't currently signed up.
I can't respond to the other data you're looking at, but we looked at all of the data in the states we're in that haven't expanded, Texas, Mississippi, Florida, South Carolina, Wisconsin, and looked at the data that suggests that if you expand Medicaid up to 138, that that's how many members would be eligible. I'm not sure what other data points exist out there, but we looked really closely at the data specific to those states where we currently have a Medicaid footprint that haven't expanded.
Thanks. My last one is, the House version of addressing this initially puts these people into ACA subsidies that reach down into those income levels, I think by 2025, if I'm recalling correctly, a mandate that CMS promulgate a new federal Medicaid plan that would reach down into those levels. Which would Molina prefer? Which do you think is the right or the best public policy decision? I think from a market share standpoint, if you're an incumbent, I would think, eventually putting those folks into Medicaid might be a better outcome for Molina. How do you look at that?
That's an interesting question. I haven't given it much thought, but I actually accept your premise. The fact that we have a Medicaid contract, we're in good standing in those states. We're really entrenched. We already have the network. It would seem very logical. If I look at my expansion population today, I think it's nearly 1 million members in total. It works very well. It leverages all the same infrastructure. In giving it a little bit of thought since a few minutes ago when you asked the question, I would say that probably attaching it to Medicaid puts us in a better position than if they attach it to an expanded Marketplace. As I said when I was presenting that page, politics may determine that those states do not expand.
If they don't, we are very comfortable saying that the federal government will pull Medicaid down or push Marketplace, or pull Marketplace down or push Medicaid up, and somehow we'll capture that membership. They're determined to solve that coverage gap.
Yes. Okay. Thank you.
Our next question comes from Joseph France with Seaport Research Partners. Please go ahead.
Thank you. Joe, you referenced the possibility of a reprocurement in X's, and that reminds me of the comment period in, I guess, today about the new proposed best value criteria for the STAR+PLUS contract. What is the issue there, and
What effect, if any, might that have on Cigna or you?
Joe, I'm going to ask you to repeat part of the question. You're referring to the Texas STAR+PLUS reprocurement, and you mentioned an issue, but we had trouble hearing your exact question.
Oh, I'm sorry. There was a public comment period for the best value criteria, and I suppose it ends today. There was a package of things that Texas put out last week. I don't know if this actually qualifies as a draft RFP, but it was on the best value criteria and addressing some of the issues that have come up before, going back, I guess, to 2020. I'm just curious, what are the issues or what is your comment on the comments, if you can, and do you see this having any impact on the RFP, which I guess is coming out later this year or in the first quarter?
No, I think generally speaking, we do have some of the draft material from the state. Our teams have looked at it, t here's nothing in there that suggests that we're not perfectly aligned with securing our bid. All the skills that we've put into all the capabilities we've put into the market, the performance we've had complying with all the rules and regulations, in great standing with the state. If they approve the Cigna acquisition, that is testimony to our standing in the state. I think we're in great shape in Texas, and we've learned nothing in all the deliberations with the state that cause us to think differently about it. They have re-engineered their procurement process, which was the issue the last time they went through this. The procurement process is straight down the middle. It's a process that we've responded to before, in many other states.
I think we're in great shape in the state of Texas.
You assume it'll be issued later this year, fourth quarter, maybe?
That's the current timeline, the final RFP to come out later this year. Responses early next year, awards mid to late next year. Contract start date, your guess is as good as mine. Maybe halfway through 2023, maybe even out to 2024.
Awesome. One last question, if you don't mind, please. You mentioned, aged, blind, and disabled with respect to Nevada, about 100 and something thousand lives, 110,000 lives. What was the context? You're saying you expect it to be included.
No
Sure. My comment was, we project that we'll ultimately have $400 million of revenue in the state of Nevada. We expect we'll earn our target margin on that revenue. The bigger prize in Nevada is aged, blind, and disabled, and LTSS, which is not yet in managed care. If it goes to managed care, it likely will be attached to the TANF contracts, or your incumbency in the state would put you in great shape to win part or all of that bid.
Absolutely, I understand. Thank you, Joe.
Thanks, Joe.
Our next question comes from Michael Newshel with Evercore ISI. Please go ahead.
Thanks. I just wanted to ask about the strategic decision not to pursue provider assets. What gives you confidence that won't become a competitive differentiator down the line? Do you just think it will remain less relevant for Medicaid, or you just see a much higher return for directing your cash flow to health plan acquisitions right now?
I think it's a combination of both. There is so much growth opportunity, and just focusing on taking capitated risk from our state customers and growing the business across the traditional dimensions, that we don't think we need to approach or target provider assets. That's sort of the allocation of capital question. Secondly, we don't believe you need to own providers to partner with them. Risk-sharing arrangements, bonus programs. When you're a single play, Medicaid and Marketplace servicing the poor, you may not have enough volume to flow through. If you don't have enough volume, it doesn't make any sense owning the equity of a provider group. It only makes sense if you're driving volume through that provider group in a very material way to where the third-party revenue they enjoy is not an issue.
In fact, I think you have to anticipate losing some of that third-party revenue because it's now owned by an MCO. I never question the strategy of the other MCOs in the market. For us, it doesn't make sense from a capital allocation point of view, and from a volume point of view, I don't think that with our 4.5 million members and $27 billion of revenue, we'd have critical mass in any one geography to drive significant volume through a provider group where we own the equity.
Thank you.
Our last question comes from Kevin Fischbeck with Bank of America. Please go ahead.
Great, t hanks. I wanted to follow up with one of the comments that you made about the market share opportunity that you have in your states. I guess you mentioned that your average state market share is 9%, and many times your top competitors are 20%-30%. Can you go into a little bit more about why exactly that is? Are you just winning contracts where there's more providers, or is there an issue around how you stack up in auto assignments? I guess how do you close that gap between the 9% and the 20%-30%?
Kevin, I think it's a function of legacy and history. Whether we acquired business, won a new contract, lost a contract, gained it back. All of our footprint has a Archaeological aspect to it where you dig down and watch how these things grew up. I just look at it as a starting point. If the starting point is low teens market share with some of the larger players at 25%, 30% to 35%, you're not going to run into a state constraint. When you're at 50% or 51%, states like to have a broad portfolio of players. When you're operating at single digits, mid-teens, or even low 20s, you're not going to run into state constraints to grow it. As I said before, it's not just hoping it happens. There are voluntary and involuntary inflows, and voluntary and involuntary outflows.
You have to focus on each of those four nodes and have operational capabilities that maximizes the members that are attracted to your plan. If it's auto assignment, it's quality scores. If it's choice, it's brand, community outreach, membership interaction, and member experience. On the outflows, the redetermination process is critical, so are provider relationships. If you lose a provider that has a significant number of members, those members are likely to leak to a new provider. It's really attacking those four nodes, having operational capabilities that respond to maximizing the inflows, minimizing the outflows, and we believe we can do that. As I said, we're not looking for major market share gains, but you've seen the numbers. 1% market share gain across the whole portfolio is a meaningful revenue number.
Yeah. I guess, is there a way to think about the timing of when you might be able to close that gap?
Well, it all happens over time. It certainly will happen more ratably than M&A would and new contract procurement. That's the lumpy side of the business. We're hoping this provides more of an even flow, and a more ratable flow over time. That's the only way I can answer your question. I think we've done a good job in the states where we focused on so far, where we've gained one or two market share points here over the past couple of years, by piloting some of these programs and focusing on those four nodes. I think it just happens gradually over time, and the proof will be in whether it enhances our revenue growth rate.
I guess in your RFP math, you used 20% as kind of the default assumption for market share. Is there a reason to believe why new RFPs would automatically come in at that 20%? Is that just more kind of your target long term, and so that's what you're using?
No, that's just a conservative estimate. Size of panels range from three to seven. Sometimes it's five. We thought 20% was a reasonable market share to target. In fact, I would tell you that market share and our position in the state is one of the criteria we look at. If we thought we were going to end up with single-digit market share, we may not even play. We thought 20% was very representative of the size of the panel that most of these states have.
Okay, great. Thanks.
Well, I think that was our last question. Thank you for being with us today, and thank you for your continued interest and support of Molina. We're committed to this strategy. It's a compelling growth strategy. We've called it sustaining profitable growth. We have a high degree of confidence in it. Thank you for being with us today, and we look forward to talking to you again at the end of the third quarter. Take care, everyone.