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Molina CEO: ACA still must address health costs


Although the Affordable Care Act has helped decrease the uninsured rate, it hasn't addressed the underlying problem of healthcare costs, J. Mario Molina, CEO of Molina Healthcare, one of the nation's largest managed care companies, said in an interview with Albuquerque Business First.

"I think the next evolution of healthcare reform is figuring out how we do a better job of controlling costs," he said.

Molina made those comments even as the ACA has helped his company expand. Because Medicaid is one of Molina's primary lines of business, the insurer enrolled many more individuals as states chose to expand their Medicaid programs.

He mentioned that his company's unique premium pricing strategy helped enable it to request lower rates than other insurers, which have reached pretty drastic highs. That's largely because the insurer didn't expect to receive any federal funds under the ACA's risk programs.

Following that strategy meant Molina was able to go in conservative because it didn't have any prior experience, so the company either lowered rates or kept them relatively flat.

Molina also spoke about the resinsurance, risk adjustment and risk corridors, adding that "a lot of companies are looking at the three Rs to help them and we weren't looking at that at all," Molina said. "We assumed that this was going to be a product that would stand on its own and that's how we priced it. It's really worked out for us."

Indeed, despite millions of federal payouts under the Affordable Care Act's risk programs, some insurers are still finding themselves in the red for their ACA plans, mostly because newer members are sicker and more expensive to cover, FierceHealthPayer previously reported.

To learn more:
- read the Albuquerque Business First article

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Insurers are losing money on ACA plans
HHS expands transitional reinsurance program to cover 100 percent of some high-cost claims
Why 2016 is the year for steep premium increases
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