Molina Healthcare Inc. is leaving open the possibility of returning to two Obamacare marketplaces the company left in 2017 after heavy losses.
Chief Executive Officer Joseph Zubretsky told investors on Monday that the insurer may resubmit price proposals for Utah and Wisconsin, but is still developing preliminary bids due in June. Molina withdrew from the two states and sought to cut 1,500 jobs after a net loss of $230 million in the second quarter of 2017.
“We have decisions to make in Florida and New Mexico,” he said. “The other states are performing well, so there is no reason to believe we wouldn’t still be successful.”
Industry experts have warned that premiums costs across all Obamacare plan levels may continue to jump in 2019. The plans start at bronze, with the lowest premium payments and highest treatment costs, and continue through silver, gold and platinum with progressively higher payments and increased coverage.
Congressional Republicans last year failed to overhaul Obamacare after pledging to do so for over seven years, which some experts and insurance companies said contributed to the rise in premium costs, though a requirement that all taxpayers have insurance was eliminated beginning in 2019 in the recent tax law. Democrats are seeking to make the issue a centerpiece of the upcoming midterm elections.
Molina’s revenue from premiums fell 7 percent to $4.32 billion in the quarter that ended on March 31, largely due to “the significant marketplace price increases that we implemented,” Zubretsky said on an earnings call.
Enrollment in bronze level plans increased, while membership in silver level plans decreased, according to Zubretsky. The Trump administration last year opted to end the cost-sharing subsidy payments that helped lower out-of-pocket health care costs for silver plan holders, a move that experts said would shift more consumers to lower-tier coverage.
Premium costs for silver plans rose 34 percent in 2018, according to a study by consulting firm Avalere.
While Molina’s revenue declined, the price increases boosted profitability. Net income rose 39 percent to $107 million, or $1.64 a share in the three months through March, and the company increased its full-year earnings target to $4 to $4.50 a share.
