Opinions vary on Molina’s withdrawal from ACA Exchange


August 15, 2017

The exterior of a building housing Molina Healthcare is seen Monday morning in Milwaukee.
John Ehlke/Daily News

Those on opposite sides of the health care debate are using the decision by Molina Healthcare to discontinue offering insurance policies as evidence to bolster their points of view.

People who dislike the Affordable Care Act argued the episode is proof of the law’s failure and is devastating Wisconsin residents, while those who support the measure have claimed the premiums they offered were unsustainably low.

“The announcement that Molina Healthcare will be dropping out of the Obamacare exchanges isn’t a surprise, but it certainly is disastrous for the more than 50,000 of Wisconsinites who may be left with no health care options under Obamacare,” U.S. Rep. Jim Sensenbrenner, a Republican, said in a news release.

Earlier this month, insurance representatives issued a statement announcing their decision.

“Molina Healthcare intends to exit the Wisconsin Health Insurance Marketplace (commonly referred to as the Exchange) in 2018,” the statement read. “After months of deliberation and planning, this was a business decision that had to be made based on a number of significant factors including challenges in keeping premiums affordable, uncertainty around cost-sharing payments and the volatility around the individual market over which we have no control.”

Company executives said that Medicaid and Medicare members will not be impacted by the change, but added, “we regret any inconvenience this may cause our Exchange members and providers and we will work diligently to do everything we can to make this a smooth transition.”

Sensenbrenner said many times in public forums he wants the law struck down. He, along with most Republicans, alluded to increasing premiums as a sign of the law’s flaws, and voted to replace it when members of the House of Representatives voted to pass the American Health Care Act.

“This is the latest development in a string of devastating health care losses for Wisconsin under Obamacare — an ill-fated law that has been a failure since its passage,” Sensenbrenner said. “It’s imperative for the health of our nation for Congress to find real solutions to the intensifying problems caused by Obamacare. The House of Representatives passed smart, patient-centered repeal and replace legislation — the Senate must do the same for the sake of all Americans.”

Some analysts admit the news poses a problem for residents who wanted to purchase insurance policies using the exchange.

Justin Sydnor, an associate professor at the University of Wisconsin-Madison who studies insurance and risk said that Molina did not offer plans in all areas of Wisconsin, but the company sold more ACA policies overall in the state than other companies. It was also the largest seller in particular areas, including Milwaukee County.

“So, we can expect that removing those plans will likely raise the premiums for people who were taking advantage of those attractive Molina plans,” he said. “There will also be inconvenience for former Molina customers who have to switch plans.”

However, he also said that Molina vacated the Wisconsin insurance market because they were losing money, primarily because the premiums they offered were so low they could not generate a profit. He concluded those prices were unsustainable and that eventually Molina representatives would have to increase prices anyway.

He added there are measures the federal government can implement to stabilize the market.

“The federal government can do a lot by guaranteeing funding for the cost-sharing reductions,” Sydnor said. “The government could also clarify and commit to its approach on enforcing the individual mandate and how it will promote ACA enrollment. Finally, expanding re-insurance programs for the ACA exchanges could help reduce some of the risk that insurers face in the market, which would likely help to stabilize the system.”

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