Molina Healthcare has announced it is exiting the Obamacare exchanges in Utah and Wisconsin and has experienced a $230 million loss in the second quarter of 2017.
In the remaining Obamacare exchanges, the health insurer is planning to increase premiums by 55 percent next year, which will account for the loss of cost-sharing reduction subsidies. If the program was funded, premiums would only increase by 30 percent.
"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," said Joseph White, chief executive and financial officer of the company.
"Following a thorough review of our business operations, we have begun to implement a Company-wide restructuring plan that we expect will reduce annualized run-rate expenses by between $300 million and $400 million by late 2018 when fully implemented."
The insurer noted that participation in some additional states were under review and that performance in Florida, Illinois, New Mexico, and Puerto Rico was especially poor and contributed to the negative financial performance seen in the second quarter.
Molina is also reducing participation in Washington and said it would closely monitor events in deciding on their 2018 participation in other states.
"Subject to those developments, [we] will withdraw from 2018 participation as may be necessary," the company said.
The company also announced it was reducing its workforce, achieving annualized salary eliminations of $55 million in the third quarter of 2017.
"We are streamlining our organizational structure, including the elimination of redundant layers of management, the consolidation of regional support services, and other reductions to our workforce, to improve efficiency as well as the speed and quality of our decision-making," the company said.