Molina Healthcare said Wednesday that it is pulling out of Utah’s Affordable Care Act marketplace, leaving two insurance options for most Utahns next year.
The Long Beach, Calif.-based company said the move was part of a restructuring after a $230 million loss in the second quarter. Molina also announced that it was leaving the Wisconsin marketplace by the end of the year.
“Molina’s unexpected decision to leave the Utah marketplace is disappointing to Utah consumers who deserve more choices and competition,” Matt Slonaker, executive director of the Utah Health Policy Project, said in a statement. “But it is also a reflection of the political uncertainly that has plagued the health insurance industry in recent months.”
Molina’s departure means nearly all Utah insurance consumers would have two choices: SelectHealth and University of Utah Health Plans. As recently as last year, there were four carriers on the Utah exchange, before Humana announced its departure.
Molina has served Box Elder, Davis, Salt Lake, Summit, Tooele, Utah and Weber counties — a total of about 70,000 customers, according to Jason Stevenson, spokesman for the nonprofit health care advocacy group Utah Health Policy Project.
That's out of a total of about 175,000 people covered in the marketplace this year, he said, with the majority covered by SelectHealth and about 5,000 covered by University of Utah.
Major financial losses and political uncertainty have caused several insurance companies to depart the marketplaces in recent months, while others are holding out for more stability before next year. President Donald Trump recently threatened to end a key subsidy for insurance companies, which some have warned could cause implosion in markets created by the Affordable Care Act, also known as Obamacare.
“We are disappointed with our bottom-line results for this quarter and have taken aggressive and urgent steps to substantially improve our financial performance going forward,” Joseph White, Molina’s chief financial officer, said in a Wednesday earnings report.
Molina placed much of the blame for its $230 million quarterly loss — compared with a net income of $33 million a year earlier — to issues related to the Obamacare marketplaces. The company said it would be laying off 1,500 employees, or 7 percent of its workforce, as part of the restructuring.
It said its participation in other state marketplaces was also under review; insurers have until September to decide whether or not to participate in markets in 2018.
Despite Molina’s departure, the Utah Health Policy Project noted that the two remaining Utah insurers are “predicted to continue and even expand their coverage options in 2018.”
— Salt Lake Tribune reporter Alex Stuckey contributed to this report.
Correction: An earlier version of this story misstated the number of Molina customers on Utah's exchange.