Headlines have been screaming for months about big insurers such as Aetna (AET), United Healthcare (UNH) and Humana (HUM) pulling out of the Obamacare marketplaces because they couldn't make the exchange business profitable. As a result, dozens of counties throughout the country have been left with only one or no insurance choice on their exchange.
Against that backdrop, two smaller insurers that focus primarily on the Medicaid market -- Molina Healthcare (MOH) and Centene (CNC) -- were frequently noted as companies that can successfully navigate the uncertain and complicated exchange business. Many states looked to them and small regional or local insurers to help fill the increasing gaps the big names were leaving behind.
So it came as a bit of shock when Molina announced on Aug. 2 it would exit the exchanges in Wisconsin and Utah, scale back its exchange business in Washington state and leave the door open to pull out of other exchanges in the near future.
What's more, in marketplaces where it will continue to operate, Molina has submitted an average 55 percent premium increase to state regulators, partly due to the uncertainty over the future of federal cost sharing payments.
The news came amid Molina's report of a steep second-quarter earnings loss of $4.10 a share, compared to a 58 cent per share gain during the same period a year earlier. It also followed the ouster in May of Chief Executive Mario Molina and Chief Financial Officer John Molina, brothers who are sons of company founder David Molina. In the earnings report, Molina also announced a major restructuring, which includes about 1,500 layoffs, approximately 7 percent of its workforce.
Until all this bad news broke, Molina was one of the prime examples of an insurer that could actually make the exchanges work. (Centene still does and is expanding its exchange business.) Major insurers like Aetna and United Health, accustomed to the more stable employer-sponsored health insurance market, racked up losses in the exchange business in part because they were surprised by the large number of high-cost patients who signed up.
Molina's business focuseson administering Medicaid health plans for low-income and disabled patients. As a result, the company has experience with managing narrow networks of lower-cost health care providers. "The idea is to arbitrage low-reimbursement providers into exchanges where the competition is paying a lot more," explained Robert Laszewski, president of consulting firm Health Policy and Strategy Associates. "There's an opportunity for profit there."
Molina found it could compete for the no-frills end of the exchange market and enjoy a robust volumne of patient sign-ups. According to Laszewski's estimates, Molina had a track record of enrolling as much as 70 percent of eligible participants in the various markets it participated in. A pool that big offers enough healthy individuals to help stabilize risk, he added.
What went wrong?
According to Joseph White, interim CEO of Molina, the company became overwhelmed with its ACA business, including unexpected increases in medical costs and claims. "We did not adjust for growth in the ACA marketplace," White told analysts in a conference call last week. He explained that the company focused resources on existing processes and technologies instead of a full redesign that would have helped it better deal with ACA growth.
"That was a mistake," said White. "The marketplace shares fundamentals of the Medicaid market, but it's also very different," he added.
In addition, speculated Laszewski, as Molina expanded into new markets and became a more dominant player in others, it may have strayed from its core base of low-income customers, adding costs and risks it couldn't deal with.
"Every company has to analyze every market to make sure they're making money in every market," said Dan Mendelson, chief executive of Avalere Health. Say a plan with bad risk drops out of the market, he added. "You may get saddled with that risk as you pick up those customers."
Molina's bad news leaves exchange consumers with even less choice and more uncertainty than they were already facing in light of failed GOP efforts to repeal and replace Obamacare and the Trump administration's threats to discontinue support for the system.
As commitment deadlines for insurers approach, state insurance commissioners are working hard to convince them to stay in the exchanges and keep at least a bare minimum of coverage. In addition, small, local, often nonprofit players such as L.A. Care Health Plan are trying to fill gaps where they can, while heeding the lessons from Molina's recent mess.
Will these efforts be enough? Consumers may have to wait until open enrollment begins on Nov. 1 to find out.
Read the original:
Anatomy of a suddenly sick Obamacare insurer - CBS News
- Isaiah Washington Says Sandra Oh Brought Him Back on Greys Anatomy Years After Firing - E! Online - April 27th, 2025 [April 27th, 2025]
- Hailey Bieber Is Outed as an Obsessive 'Greys Anatomy' Fan: It's 'a Big Secret' - People.com - April 27th, 2025 [April 27th, 2025]
- Unfurling Anatomy explores neuroplasticity and healing through artistic expression - 13wham.com - April 27th, 2025 [April 27th, 2025]
- Why isnt Greys Anatomy on TV tonight? When is the next new episode? - PennLive.com - April 27th, 2025 [April 27th, 2025]
- Why Greys Anatomy Isnt Airing a New Episode Tonight (April 24) & When Itll Return - Just Jared - April 27th, 2025 [April 27th, 2025]
- Greys Anatomy season 21 new episode tonight - How to watch on ABC for free - MassLive - April 27th, 2025 [April 27th, 2025]
- Anatomy of a US Treasury Sell-Off - AllianceBernstein - Commentaries - Advisor Perspectives - April 27th, 2025 [April 27th, 2025]
- Anatomy Of Lies Documentary: Everything To Know About The Grey's Anatomy Writer Who Faked Cancer (& Where To Watch Online) - Screen Rant - April 27th, 2025 [April 27th, 2025]
- 'Greys Anatomy' Star Katherine Heigl Slammed With Lawsuit For Alleged $300,000 Unpaid Services - Yahoo - April 27th, 2025 [April 27th, 2025]
- Grey's Anatomy's Isaiah Washington Says Sandra Oh Brought Him Back After Altercation with Patrick Dempsey - E! Online - April 27th, 2025 [April 27th, 2025]
- Why Arent 9-1-1, Doctor Odyssey & Greys Anatomy New Tonight? - The Sanford Herald - April 27th, 2025 [April 27th, 2025]
- 'Grey's Anatomy' Teases a Winston/Jules Pairing: Are You Feeling It? - TVLine - April 27th, 2025 [April 27th, 2025]
- Anatomy of a PMs fall: did Albanese stumble off a stage - and why are we still talking about it? - The Guardian - April 27th, 2025 [April 27th, 2025]
- Anatomy Of A Bitcoin Bear Market: Expert Trader Reveals The Signals To Watch Out For | Bitcoinist.com - Bitcoinist.com - April 19th, 2025 [April 19th, 2025]
- 'Grey's Anatomy' Recap: Are Winston Ndugu and Jules Millin the Next Power Couple at Grey-Sloan? - TV Insider - April 19th, 2025 [April 19th, 2025]
- Greys Anatomy Taps Piper Perabo for Three-Episode Arc Whats Her Connection to Amelia? - TVLine - April 19th, 2025 [April 19th, 2025]
- The anatomy of an NPR headline - VPM - April 19th, 2025 [April 19th, 2025]
- Anatomy of the system: Criminal case is finally (almost) over - nrtoday.com - April 19th, 2025 [April 19th, 2025]
- Grey's Anatomy Season 21, Episode 15 Review: Im Glad The Characters Are Showing Off Their Silly Sides In The Shows Funniest Episode In A Long Time -... - April 19th, 2025 [April 19th, 2025]
- Jessie Buckley to Narrate Leah Hazards Novel The Anatomy of Us for Audible (EXCLUSIVE) - Variety - April 19th, 2025 [April 19th, 2025]
- Ellen Pompeo reveals why shell never leave Greys Anatomy for good: It doesnt make any sense - New York Post - April 19th, 2025 [April 19th, 2025]
- Greys Anatomy season 21 episode 15: Where to watch free tonight - MassLive - April 19th, 2025 [April 19th, 2025]
- Ellen Pompeo says leaving 'Grey's Anatomy' would mean that others get to 'profit' off her hard work - Business Insider - April 19th, 2025 [April 19th, 2025]
- Ellen Pompeo on Why It Would Make No Sense to Walk Away From Greys Anatomy - Rolling Stone - April 19th, 2025 [April 19th, 2025]
- In the Human Anatomy Lab, Experiential Learning Prepares Future Health Care Leaders - U of G News - April 19th, 2025 [April 19th, 2025]
- Window washers platform crashes into hospital: How to watch Greys Anatomy without cable - PennLive.com - April 19th, 2025 [April 19th, 2025]
- Riley Greene, Colt Keith and the anatomy of a slump - The Athletic - The New York Times - April 19th, 2025 [April 19th, 2025]
- Ellen Pompeo reveals she gets a little bit annoyed when Greys Anatomy fans call her Meredith - The Independent - April 19th, 2025 [April 19th, 2025]
- Revisiting the 20-Year History of the Music of Greys Anatomy - Shondaland - April 19th, 2025 [April 19th, 2025]
- Yellowstone Star Piper Perabo Joins the Cast of Greys Anatomy in Recurring Role - EntertainmentNow - April 19th, 2025 [April 19th, 2025]
- Seriously? Greys Anatomy Is Making Us Take Sides, and It Feels Like [Bleep] - TVLine - April 19th, 2025 [April 19th, 2025]
- Ellen Pompeos honest reason for never leaving Greys Anatomy branded weird - The Independent - April 19th, 2025 [April 19th, 2025]
- The body as a manifesto: Schiaparellis use of anatomy - HIGHXTAR. - April 19th, 2025 [April 19th, 2025]
- Ellen Pompeo reveals one frustration with Grey's Anatomy fans: "I do get a little bit annoyed" - Digital Spy - April 19th, 2025 [April 19th, 2025]
- On Set: Greys Anatomy Stars Sharing Their Hidden Talents - Shondaland - April 19th, 2025 [April 19th, 2025]
- Anatomy of a Shot | The Gorge: Building the Blast - DNEG - April 19th, 2025 [April 19th, 2025]
- The countries with longest anatomy measurements (7+ inches) and what this means for your health - Journe Mondiale - April 10th, 2025 [April 10th, 2025]
- 21 "Grey's Anatomy" Behind-The-Scenes Facts That'll Make You Watch The Show In A Whole New Way - BuzzFeed - April 10th, 2025 [April 10th, 2025]
- Anatomy of Exile by Zeeva Bukai reflects on the elusive nature of home - jweekly.com - April 10th, 2025 [April 10th, 2025]
- Sex toys and exploding cosmetics: Anatomy of a 'hybrid war' on the West - Reuters - April 10th, 2025 [April 10th, 2025]
- Doctor Odyssey Has Higher Ratings Than Grey's Anatomy, So Why Was It At The Risk Of Being Canceled When Shonda Rhimes' Show Was Already Renewed -... - April 10th, 2025 [April 10th, 2025]
- Anatomy of a housing proposal toppled by NIMBYs - The Portland Press Herald - April 10th, 2025 [April 10th, 2025]
- The Anatomy of a New Distribution Branch - Roofing Contractor - April 10th, 2025 [April 10th, 2025]
- 'Grey's Anatomy' Is Returning for Season 22: Get the Scoop - TV Insider - April 10th, 2025 [April 10th, 2025]
- Greys Anatomy: Has Owen Broken the Open Relationship Rules Already? - TV Insider - April 10th, 2025 [April 10th, 2025]
- Greys Anatomy Season 21, Episode 13 Review: Im More Excited Than Ever For The Last 5 Episodes Thanks To A Few Storyline Advancements - Screen Rant - April 10th, 2025 [April 10th, 2025]
- 'Grey's Anatomy': Teddy Makes a Tearful Admission as She and Owen Navigate Their Open Marriage - People.com - April 10th, 2025 [April 10th, 2025]
- Greys Anatomy, Shifting Gears Among Five ABC Renewals, Doctor Odyssey in Limbo - hollywoodreporter.com - April 10th, 2025 [April 10th, 2025]
- Effect of Virtual Reality Simulation on Anatomy Learning Outcomes: A Systematic Review - Cureus - April 10th, 2025 [April 10th, 2025]
- Greys Anatomy Renewed For Season 22 By ABC With Veteran Cast Poised To Return - Deadline - April 10th, 2025 [April 10th, 2025]
- Grey's Anatomy: Kim Raver Talks Teddy and Owen's Open Marriage - Us Weekly - April 10th, 2025 [April 10th, 2025]
- Greys Anatomy: Sophia Bush Discusses Cass And Teddys Long-Awaited Tryst & Whether Theres More To Come Between Them - Deadline - April 10th, 2025 [April 10th, 2025]
- 9-1-1, Greys Anatomy, The Rookie, Shifting Gears, Will Trent Renewed at ABC - Variety - April 10th, 2025 [April 10th, 2025]
- 7 Times the Greys Anatomy Surgeons Did the Impossible - Shondaland - April 10th, 2025 [April 10th, 2025]
- Grey's Anatomy Is Bound To Repeat A Controversial George Plot From 18 Years Ago (But With A Twist) - Screen Rant - April 10th, 2025 [April 10th, 2025]
- Ellen Pompeo Reveals The Exact Moment Her Daughter Stopped Watching 'Grey's Anatomy' - HuffPost - April 10th, 2025 [April 10th, 2025]
- Anatomy Of A Market Crisis: Tariffs, Markets And The Economy - Seeking Alpha - April 10th, 2025 [April 10th, 2025]
- Pulse Bosses on Danny and Xanders Messy Power Dynamic, Greys Anatomy Comparisons and Season 2 Plans - Variety - April 10th, 2025 [April 10th, 2025]
- Bare Anatomy parent Innovist raises Rs 136 crore from ICICI Venture, others - The Economic Times - April 10th, 2025 [April 10th, 2025]
- T.R. Knight Was 'Scared' to Film Meredith and George's 'Humiliating' Grey's Anatomy Sex Scene (Exclusive) - People.com - April 10th, 2025 [April 10th, 2025]
- "Thats My Home": Ellen Pompeo Reveals Whether She Has Plans To Exit 'Grey's Anatomy' for Good - Collider - April 10th, 2025 [April 10th, 2025]
- TVs Current Medical Dramas, Ranked: Our Diagnoses for The Pitt, Watson, Doc Greys Anatomy and More - TVLine - April 10th, 2025 [April 10th, 2025]
- Anatomy of a Market Crisis: Tariffs, Markets and the Economy - Investing.com - April 10th, 2025 [April 10th, 2025]
- Who Will Save Greys Anatomy Now That Ellen Pompeo Is Gone? - The Daily Beast - April 10th, 2025 [April 10th, 2025]
- 19 Most Memorable (and Heart-Wrenching!) 'Grey's Anatomy' Episodes of All Time - PEOPLE - March 30th, 2025 [March 30th, 2025]
- 16 stars you forgot were on Grey's Anatomy before their big break (including future Oscar nominees) - Entertainment Weekly News - March 30th, 2025 [March 30th, 2025]
- "I Cried When He Died": Shonda Rhimes Is Still Deeply Impacted By Killing One Grey's Anatomy Character - Screen Rant - March 30th, 2025 [March 30th, 2025]
- See the Best Greys Anatomy Behind-the-Scenes Photos to Celebrate 20 Years of the Medical Drama - PEOPLE - March 30th, 2025 [March 30th, 2025]
- Katherine Heigl, Jeffrey Dean Morgan reunite to talk Grey's Anatomy , from Denny's death to ghost sex - Entertainment Weekly News - March 30th, 2025 [March 30th, 2025]
- Sandra Oh Is Changing Her Tune on a Potential Return to 'Grey's Anatomy' - PEOPLE - March 30th, 2025 [March 30th, 2025]
- The Scrapped Grey's Anatomy Spin-Off Would Have Ruined The Show's Best Characters - SlashFilm - March 30th, 2025 [March 30th, 2025]
- Anatomy of a flood: The Derna tragedys lessons for Libyan governance - Brookings Institution - March 30th, 2025 [March 30th, 2025]
- 19 Years Later, Shonda Rhimes Still Isnt Over This Greys Anatomy Death (and Neither Are We) - Collider - March 30th, 2025 [March 30th, 2025]
- The perfect palliative balm of Greys Anatomy - Financial Times - March 30th, 2025 [March 30th, 2025]
- 15 Behind-the-Scenes Facts You Didn't Know About Grey's Anatomy, 20 Years After It Premiered - MSN - March 30th, 2025 [March 30th, 2025]
- I Have Zero Endings: Shonda Rhimes Has No Idea How (or When) Greys Anatomy Will End - Collider - March 30th, 2025 [March 30th, 2025]
- My Only Allegiance Is to the Story: Shonda Rhimes Explains Why Shes Killed So Many Beloved Greys Anatomy Characters - Collider - March 30th, 2025 [March 30th, 2025]
- 'Grey's Anatomy' star Ellen Pompeo says $20 million salary brings 'true independence': 'I don't have to do anything I don't want to do' - CNBC - March 30th, 2025 [March 30th, 2025]
- 'I love your song from "Grey's Anatomy"': How the ABC medical drama's soundtrack changed these artists' musical careers - Yahoo... - March 30th, 2025 [March 30th, 2025]
- Shonda Rhimes On The 'Grey's Anatomy' & 'Scandal' Spinoffs That Never Materialized: "We Thought About A Lot Of Things" - Deadline - March 30th, 2025 [March 30th, 2025]