Insurer has loss, yet Texas a bright spot
Molina Healthcare this week announced a $230 million loss in its second quarter and said it would stop offering plans on Affordable Care Act exchanges in Utah and Wisconsin. It’s also looking at participation levels in other states.
But Texas, apparently, remains a bright spot for the California-based company. It’s one of three health insurers expected to remain on the exchange in Houston next year.
“There’s no doubt performance in Texas has been very nice,” interim CEO Joseph White said during an earnings call this week to analysts. “Performance in some of the smaller states, Michigan and New Mexico, has been nice. California has been OK. Florida, though, has not been a good market for us. We’re going to have to look closely at it.”
White also said participation in Washington state will be reduced.
“Molina has filed to partici-
pate in the 2018 Texas insurance exchange, but our filings are not final until they have been approved, which we understand will happen by mid-September,” a company spokeswoman said in an email Friday.
On Tuesday the federal Centers for Medicare and Medicaid Services made public insurers’ rate increase requests for individual plans offered on the ACA’s exchange in 2018. Molina Healthcare has asked for hikes in its individual market in Texas ranging from 20.98 percent to 23.83 percent.
Final rate increases and insurer participation in exchanges may not be known until late next month. Enrollment will be open Nov. 1 through Dec. 15.
The insurance industry has said political uncertainty surrounding the current law known as Obamacare has made it especially difficult to predict risk and determine rates for next year. If the individual mandate is removed — a hallmark of proposed replacement plans pushed by the White House and the Republican-led Congress — insurers say they will not know how many people they will cover and, more importantly, how sick they will be.
In addition, President Donald Trump has not yet committed to whether the federal government will continue to pay insurers to reduce the out-of-pocket expenses for low-income Americans.
Without those payments, insurers have said they will likely have to raise rates even higher than currently proposed.
Other rate increase requests for 2018 for individual plans in the Houstonarea exchange included 23.4 percent and 23.9 percent increases in two Blue Cross and Blue Shield of Texas individual plans on the exchange and a 16.4 percent increase request from Community Health Choice.
Molina Healthcare’s board in May ousted Dr. J. Mario Molina as CEO and his brother, John Molina, as CFO. They were the sons of the company’s founder.
Molina has been considered one of the nation’s largest, and successful, providers of individual plans under Obamacare. A year ago, during the same three-month period, the company posted a $33 million profit, according to financial records.
“The results reported today are disappointing and unacceptable,” White said during the earnings call, “we must, and we will do much better and we are taking aggressive, urgent and determined actions to improve our financial performance.”