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Molina Could Pull Out of Florida ACA Exchange in 2019

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One of the Medicaid plan companies that has been a major player in the Affordable Care Act public exchange plan market could pull out of Florida in 2019.

Executives from the insurer, Molina Healthcare Inc., said Monday that the company will have to think about its ACA exchange presence in Florida and New Mexico, now that it appears to be on track to lose the ability to sell coverage through those states’ managed Medicaid programs.

“We are obviously in the process of developing our preliminary rate bids, which go out in early June,” Joe Zubretsky, Molina’s president, said during conference call with securities analysts. “We have decisions to make in Florida and New Mexico. If we lose our Medicaid contracts there, [ACA] marketplace will be the only substantial business we have in those markets.”

(Related: New ACA Risk Report Hits Some Health Insurers With Huge Bills)

Molina had been hoping to win a contract to participate in at least one region in Florida, but Florida rejected its bid, Zubretsky said.

Molina is still appealing the rejection.

Molina may have lost in Florida partly because rapid growth in the company’s ACA exchange plan enrollment in Florida led to complaints about service in Florida, Zubretsky said.

Molina could still return to the Florida ACA exchange program in 2019, however, because efforts to increase premiums and reduce costs have paid off their, and the Florida exchange plan operation appears to be doing better, Zubretsky said.

Zubretsky said, however, that one problem with the ACA exchange program is that benefits ratios tend to be very low in the first quarter, because of the way deductibles and other coverage provisions are designed, and predicting what the claims will be like later in the year is difficult.

Zubretsky said Molina is happy with some of its ACA exchange plan operations, and especially with the ACA exchange plan operation in Texas.

Molina has 245,000 exchange plan enrollees in Texas and a good provider network there, Zubretsky said. He said the company’s exchange plan risk pool in Texas has been stable.

Molina held the conference call to go over first-quarter earnings.

The company is reporting $107 million in net income for the quarter on $4.6 billion in revenue, compared with $77 million in net income on $4.9 billion in revenue for the first quarter of 2017.

The company has 453,000 people in ACA exchange plans, down from 1 million a year earlier. The number of exchange plan enrollees fell partly because the company pulled out of the ACA exchange programs in Utah and Wisconsin, and partly because its enrollment in California fell.

Zubretsky said the company has eliminated about 100 positions in recent months.

“We will continue to restructure inefficient processes and find opportunities for head count reductions, as doing so has a very short payback period,” Zubretsky said.

— Read Molina Ousts Family Leadership, Sparking Takeover Speculation on ThinkAdvisor.

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