Molina Healthcare reveals 'aggressive' restructuring after $230m loss
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California-based Molina Healthcare has announced its decision to exit Utah and Wisconsin Affordable Care Act marketplaces at the end of 2017.
The company stated that the move is a part of its strategy to improve profitability in 2018, after it reported a massive loss in its second quarter 2017 results, prompting a restructuring exercise and redundancies.
"We are exiting the Utah and Wisconsin ACA Marketplaces effective December 31, 2017. For the three months ended June 30, 2017, these two health plans reported a total of $127 million in Marketplace premium revenue (16 percent of consolidated Marketplace premium revenue), and a combined Marketplace medical care ratio of 128 percent," the company said in a statement.
"In our remaining Marketplace plans, we are increasing 2018 premiums by 55 percent," it added. "The increase takes into account the absence of cost sharing reduction subsidies. Had we assumed that cost sharing reduction subsidies would be funded for 2018, the premium increase would have been 30 percent."
Molina also stated that it is reducing the scope of its 2018 participation in the Washington marketplace.
"We continue to closely monitor the current political and programmatic developments pertaining to our 2018 participation in other Marketplace states, and subject to those developments, will withdraw from 2018 participation as may be necessary."
Molina Healthcare, Health insurance, Obamacare, Affordable Care Act, Utah, Wisconsin, US