Molina CEO one of few health insurance execs to criticize American Health Care Act

The CEO of Molina Healthcare, who has already said his company might consider exiting the individual exchanges next year, has become one of the few health insurance executives to come out against the American Health Care Act.

J. Mario Molina has voiced his concerns about the Republican healthcare bill to both federal lawmakers and state governors in recent weeks, The New York Times reported.

For one, he said the GOP’s contention that its proposed changes to Medicaid would give state more flexibility is a “red herring” to distract from the steep funding cuts that the bill would impose. That could be especially problematic for Molina’s company, as it is one of the nation's largest managed care companies and has thrived under Medicaid expansion.

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Molina has also translated its prowess at designing plans for lower-income populations to success on the Affordable Care Act exchanges. Its formula, essentially, is to offer mainly narrow-network plans with low premiums.

But that line of business has struggled recently, with the insurer reporting earlier this year that it has to pay $325 million more into the risk adjustment program than it had anticipated. The company’s CEO blames what he calls the risk adjustment program’s flawed methodology, saying it “penalizes low-cost and low-premium health insurers like Molina.”

While Molina has been critical of the risk adjustment program since before President Donald Trump took office, he says it is now up to Republicans to ensure the individual market is stabilized next year, according to the Times.

He also acknowledged that few of his peers are willing to vocalize their concerns. “I think many in the industry are afraid,” he said.

Indeed, Molina’s criticism of the GOP’s healthcare overhaul bill stands in contrast to Anthem CEO Joseph Swedish’s position. In a recent letter to congressional leaders, Swedish wrote that the bill “addresses the changes immediately facing the individual market and will ensure more affordable health plan choices for consumers in the short term.”

Yet he did have some requests, such as ensuring that cost-sharing reductions are properly funded through 2019. Anthem, one of the major players on the exchanges, might consider extracting itself from those markets in 2018 if it doesn’t see more signs of stability, Swedish said in February.