Who says Obamacare is bad for business?
While major insurers, including UnitedHealth, Aetna, and Humana are exiting state Affordable Care Act marketplaces, saying they are unable to turn a profit on the individual plans they sell on the state and federally run exchanges, a new kid on the block is showing them how it can be done.
Molina Healthcare, a California-based insurers that until recently specialized in Medicaid plans, is making big bucks on the ACA marketplace.
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In its first year of selling ACA plans, in 2014, Molina doubled its revenue to $12 billion. It said it expects to hit $16 billion this year.
Its experience selling plans within a government framework prepared it for the ACA landscape, CEO Mario Molina told The Hill recently.
"In the Medicaid environment, we don't have ability to raise prices or raise premiums. We have to learn to live within a budget, and that's very different than on the commercial side," he says.
While other insurers are dramatically scaling back their Obamacare operations, and leaving states where they have performed worst, Molina is going to enter three additional state marketplaces in 2017. It is currently operating in nine.
As The Hill points out, it plans to enter California and Florida, both of which just lost UnitedHealth and Aetna.
Molina's insurance policies are typically narrow networks, which include a limited number of providers and allow the insurer to offer lower prices.
"While it sounds nice to say that we have these super duper specialty hospitals, most people just want to go to their local hospital," says Molina, defending the practice.
However, a lack of "super duper specialty hospitals" is not the only reason that narrow networks have critics. Some ACA customers have reported being unable to find nearby providers covered by their plan, and emergency departments have reported treating people for non-emergency conditions who have insurance but cannot get an appointment with a doctor.
A recent report by McKinsey that examined 18 state marketplaces showed that insurers that are increasingly embracing the narrow network model. In 2017, the report found, three-quarters of the plans offered in those 18 states will be narrow, up from 55 percent in 2015.
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