Molina to eliminate 1.4K jobs this year
- Molina Healthcare is prepping to cut 1,400 jobs in the remainder of the year, Reuters reported.
- The cuts, representing 10% of its workforce, seek to realize savings next year. The company's behavioral health service Pathways is not included in the reductions.
- "Moving forward, we must be exceptionally strategic in doing more with less," Interim CEO and CFO Joe White wrote in a memo reviewed by Reuters.
Recent news regarding the insurer has been rocky as of late.
In May, the company dismissed President and CEO Dr. J. Mario Molina and CFO John C. Molina following what the board called a "disappointing financial performance . . . in order to drive profitability through operational improvements."
The search for a permanent CEO is still on.
In February, then-CEO Mario Molina attributed income losses on the ACA marketplace and questioned participation in the exchanges after 2017. Molina reported a loss of $91 million in Q4 2016 and stated that while the company experienced enrollment growth, such members cost more in the long run with the decline of per-member-per-month revenue.
“There are simply too many unknowns with the marketplace program to commit to our participation beyond 2017,” he said in a conference call in February.
While questioning participation, Molina had advocated for the ACA exchanges and has been highly outspoken on Republican plans to repeal and replace the ACA, highlighting concerns about the current state of the ACA and the possibility that Republicans might stop funding cost-sharing reduction (CSR) subsidies.
The CSR payments are still a question that hangs in the balance of Republican plans over the ACA. President Donald Trump's administration paid insurers such payments last month but still has not provided payors the peace of mind that it will continue to do so in the future.
Molina mainly serves Medicaid customers, Modern Healthcare noted, adding that White wrote: "We must commit to being the highest value managed-care solution for people receiving government assistance. We must increase value by improving quality and driving down costs."
Molina's CEO, according to an Axios analysis, earned $4.6 million in 2016, down from $10.8 million in 2015.
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