Some insurers' withdrawal from Affordable Care Act marketplaces have stoked concerns about the exchanges' sustainability, but one insurer has quietly found a profitable way to offer exchange products.
Long beach, California-based Molina Healthcare sees itself as poised to expand its presence on the public health exchanges, as it has "exceeded" its own growth targets, CEO Joseph Molina told The Hill. After aiming to grow revenue twofold from $6 to $12 billion in the first two years of open enrollment, the managed care giant now expects to surpass its goal and achieve $16 billion in revenue by the end of the year.
Molina uses a similar formula for its ACA products as it does for Medicaid managed care products: Keep networks tight and premiums low. The insurer now plans to expand into three more states, for a total of 12, including Florida and California, where Aetna and UnitedHealth just left, according to The Hill.
And the insurer is not alone in this strategy. Estimates show 75 percent of next year’s ACA products will be limited-benefit HMOs or EPOs, according to a previous report from McKinsey & Company.
Molina also is adamant in its policy not to rely on the "three Rs"--risk corridors, risk adjustment and reinsurance credits, its CEO said. The Blue Cross Blue Shield Association, meanwhile, has asked lawmakers to protect the reinsurance program. BCBS North Carolina and Highmark have sued the federal government to recoup risk corridor payments, and CO-OPs have claimed they are owed tens of millions from the risk adjustment program.
Once considered a potential acquisition target for "big five" insurers, Molina also has shown itself to be in the buyer’s market after agreeing to a contingent purchase of $117 million worth of Medicare Advantage assets that Aetna is set to divest if its acquisition of Humana gains approval.