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Two high-profile insurers said they would make changes to their Obamacare-related business next year, adding to the uncertainty surrounding the future of the law formally known as the Affordable Care Act.
Molina Healthcare said it would exit the Obamacare individual insurance exchanges in Utah and Wisconsin due to lagging financial performance.
“Looking back on our involvement in Wisconsin and Utah, the populations in those states were probably not significant enough to move the needle for the company in a positive way,” CEO Joseph White said during the company earnings call Wednesday. “The cost experience certainly moved it in a negative way. But, frankly, I think the markets there were just so small as to just not offer a lot of upside.”
Molina, which has been relatively successful on the exchanges, is in the midst of a restructuring after firing its CEO and CFO in May. Both of the executives were sons of Molina founder David Molina.
White did say there were some exchanges were positive contributors to Molina’s bottom line, but the company is reviewing all of its marketplace offerings to make sure it is being as efficient as possible.
“There’s no doubt performance in Texas has been very nice,” White said. “Performance in some of the smaller states, Michigan and New Mexico, has been nice. California has been okay. Florida, though, has not been a good market for us. We’re going to have to look closely at it.”
In addition to the Molina news, insurance giant Aetna said Thursday that it would not offer 2018 exchange plans in Nevada – the last market where it was considering offering Obamacare plans. The firm filed to potentially offer plans in the state back in June.
The company’s CEO, Mark Bertolini, said in an earnings call that the company was terminating a Medicaid contract with the Nevada government due to low enrollment. Insurers in a state’s Obamacare exchanges typically receive some breaks in the Medicaid market, so without the Medicaid contract, there was little reason to continue to offer exchange plans.
“Our 2018 participation was required based on a Medicaid contract with the state,” TJ Crawford, an Aetna spokesperson, told Business Insider in an email. “As a result of terminating that contract for unrelated reasons, we will not have a presence on the individual exchange in Nevada, and will have no on-exchange presence anywhere in 2018.”
Aetna was only planning to offer plans in a handful of counties in the state, none of which were the potentially bare rural counties, making the scrapped plans mostly a symbolic blow.
But the moves come as the future of Obamacare continues to be in doubt. Weak financial performance has led to many major insurers to pull out of the exchanges over the past two years, raising doubts over the future of the marketplace. However, a recent study by the Kaiser Family Foundation, a nonpartisan healthy policy think tank, found that for the insurers that remain the markets are stabilizing and that profits should begin to materialize.
Despite this, numerous insurers and state insurance commissions have cited uncertainty over future policy from the Trump administration and Congress as a reason to exit the exchanges or raise prices.