How Molina found a profitable strategy for ACA exchanges

While larger insurers like UnitedHealthcare and Aetna have complained of losing hundreds of millions of dollars on the Affordable Care Act’s exchanges, Molina Healthcare has turned a slim profit by applying its Medicaid management strategies to the new marketplace.

The Wall Street Journal reported on one Molina customer’s story which is common for many under their plans: initially, they’re concerned about the limitations of the health maintenance organization plan, but “when we had to make the first premium payment, we got over that quickly,” said 56-year-old Elizabeth Wolfe.

Wolfe pays $52 per month for a Molina plan which covers her and her husband, with federal subsidies picking up some of the cost.

Molina’s profit margins on its exchange business are slim—somewhere in the 1.5 to 2 percent range—but they’re in the black, unlike many other exchange participants. It’s winning strategy is similar to how they’ve managed Medicaid patients for years: using narrow provider networks, rigorous cost control and close management of patients’ health.

“We are attracting and managing a similar population to what we have managed for the last 36 years” in Medicaid plans, Lisa Rubino, a Molina senior vice president, said to the Journal. “Making our products affordable at the premium level is job No. 1.”

For more on how other insurers could walk a similar path towards profitability on the exchanges, click on the link below: