Rehabilitator Petitions for Approval to Sell Rights to Serve Nearly 87,000 Wellness Plan Members in Michigan to Molina Healthcare of Michigan.

LONG BEACH, Calif. -- Molina Healthcare of Michigan, Inc. Was Also Recommended for Renewal of its Medicaid Managed Care Contract for State of Michigan

Molina Healthcare, Inc. (NYSE:MOH), an innovative managed care organization providing quality care and accessible services to low-income families and individuals, today announced that the Rehabilitator of The Wellness Plan of Michigan has petitioned for approval to sell the rights to serve The Wellness Plan members in several counties to Molina Healthcare's subsidiary, Molina Healthcare of Michigan, Inc. The Company also announced that Molina Healthcare of Michigan has been recommended for renewal of its Medicaid managed care contract with the state of Michigan.

In commenting on the announcements, J. Mario Molina, president and chief executive officer of Molina Healthcare, Inc., said, "We are very proud of the achievements of Molina Healthcare of Michigan and the recognition that our company is receiving as a provider of quality healthcare services. Once approved, the addition of up to 87,000 members from The Wellness Plan would bring Molina Healthcare's total membership to approximately 739,000 members."

In July 2003, The Wellness Plan, one of Michigan's largest Medicaid HMOs, was placed into Rehabilitation, the equivalent of a bankruptcy reorganization. Linda A. Watters, the Commissioner of the Michigan Office of Financial and Insurance Services, was named the Rehabilitator of The Wellness Plan. On June 18, 2004, the Rehabilitator petitioned the Michigan Circuit Court for approval to sell the rights to serve The Wellness Plan membership in Macomb, Muskegon/Oceana, Oakland and Wayne counties to Molina Healthcare of Michigan, Inc. The membership in these counties covers over 87,000 members. The Petition is subject to Michigan Circuit Court approval, and, upon such approval, Molina Healthcare of Michigan has agreed to pay approximately $19 million (subject to adjustments and the customary regulatory approvals). It is expected that the members will be transferred in the fourth quarter of 2004.

Roman T. Kulich, chief executive officer of Molina Healthcare of Michigan, Inc., added, "We are very pleased that the State of Michigan has recommended entrusting us with a significant portion of the members served by The Wellness Plan. We consider this a tremendous responsibility, and we are committed to working closely with physicians and hospitals during and after the transition. In addition, we are pleased that, as a result of the State of Michigan's initiative to re-bid its Medicaid managed care contracts, Molina Healthcare of Michigan was one of the health plans recommended to continue serving the state's Medicaid population."

Molina Healthcare of Michigan, Inc. is one of Michigan's fastest growing Medicaid health plans. Molina Healthcare of Michigan, Inc. currently serves approximately 89,000 members in 39 Lower Peninsula counties including Kent, Wayne, Oakland and Macomb. Molina relies on community physicians, local rural health clinics and hospitals for its provider network throughout Michigan. Molina Healthcare of Michigan, Inc. is a subsidiary of Molina Healthcare, Inc. For more information on Molina Healthcare of Michigan, please log onto www.molinahealthcare.com/michigan.

Molina Healthcare, Inc. is a rapidly growing, multi-state managed care organization that arranges for the delivery of healthcare services to persons eligible for Medicaid and other programs for low-income families and individuals. It currently operates health plans in California, Washington, Michigan and Utah. As of June 7, 2004, Molina Healthcare had approximately 652,000 members. More information on Molina Healthcare can be obtained at www.molinahealthcare.com.

This release may contain forward-looking statements and information. Except for the historical information contained in this release, all forward-looking statements are subject to various risks and uncertainties that may cause actual results to differ materially from current expectations. Such factors include receiving Michigan Circuit Court approval of the Rehabilitator's petition, acceptance of the recommendation for renewal of Molina Healthcare of Michigan's Medicaid managed care contracts, changes in federal or state laws or regulations or the interpretation thereof, reduction in provider payments by governmental payors, and other risks and uncertainties as detailed in Molina's reports and filings with the Securities and Exchange Commission and available for viewing on its website at www.sec.gov. All forward-looking statements in this release represent Molina's judgment as of the date of this release. Molina disclaims any intent or obligation to update its forward-looking statements.