(Adds quarterly results, CEO comment, background, share price)
Feb 15 Medicaid-focused health insurer Molina
Healthcare Inc on Wednesday reported a fourth-quarter
loss and forecast 2017 profit far below Wall Street estimates,
blaming Obamacare for its disappointing financial performance.
Molina shares plunged 13 percent.
For 2017, Molina forecast adjusted earnings of $2.09 per
share, while analysts on average were forecasting $3.69,
according to Thomson Reuters I/B/E/S.
"Today’s results highlight the continuing challenges we face
in the ACA marketplace," Chief Executive Officer J. Mario Molina
said in a statement, referring to the Affordable Care Act,
former President Barack Obama's signature healthcare reform law
commonly referred to as Obamacare.
"We continue to advocate for measures that the federal
government can take to level the marketplace playing field for
insurers, like Molina.” the CEO said.
The Republican-led Congress and President Donald Trump have
pledged to repeal and replace Obamacare but have yet to come up
with a replacement plan.
The Trump administration on Wednesday proposed changes to
the Obamacare individual insurance market that insurers welcomed
as a good start but that raised the possibility of higher
out-of-pocket costs for consumers. Earlier Humana Inc
had said it would pull out of this market in 2018.
For the fourth quarter, Molina reported a net loss of $91
million, or $1.64 per share, compared with a profit of $30
million, or 52 cents per share, a year earlier.
Excluding items, Molina said it lost $1.54 per share for the
quarter, while analysts on average were looking for a profit of
"We are clearly disappointed in these results," Molina said,
pointing to the need to improve Medicaid profitability in
Illinois, Ohio and Washington.
The ACA expanded Medicaid, the government health insurance
program for the poor, in more than 30 states and set up private
healthcare exchanges that enabled previously uninsured people to
buy health insurance.
Insurers have struggled as not enough healthy people signed
up for insurance to offset the heavy costs incurred for those in
need of expensive medical care.
Molina Healthcare shares fell to $52 in extended trading
from a Wednesday close at $59.89.
(Reporting by Bill Berkrot in New York; Editing by Lisa
Shumaker and James Dalgleish)