Business |

Molina Healthcare reports $512-million loss for 2017

Molina Healthcare reported a $512-million loss for 2017, a year when the firm changed its top leadership and underwent a company-wide reorganization.

The company, headquartered in Long Beach, announced its financial results Monday afternoon.

The company attributed its 2017 losses to such factors as the costs of its restructuring and the federal government’s termination of subsidy payments that executives believe are still owed to the firm.

Molina also on Monday released its preliminary guidance for the current year. The company forecasts a profit somewhere between $202 and $236 million and $17.5 billion in premium revenue.

Molina officials were not available for comment Monday, but executives are scheduled to discuss the company’s performance during an early-morning conference call with analysts on Tuesday.

“Our fourth-quarter results are emblematic of the significant transition Molina is undertaking,” Chief Executive Joe Zubretsky said in a statement. “The disappointment of contract losses and related goodwill charges, continued restructuring costs, and catch up adjustments to unacceptable Marketplace results are legacies of the past.

Molina Healthcare specializes in providing insurance to customers who receive government assistance through such programs as Medicare and Medicaid, or who obtain subsidized insurance from government-sponsored marketplaces such as Covered California.

The numbers:

• Molina Healthcare’s $512-million loss last year compares with a $52-million profit reported for 2016.
• The company reported a $262-million loss for the final three months of 2017, compared with a $47-million loss for the corresponding quarter of 2016.
• Total premium revenue increased from more than $16.4 billion in 2016 to nearly $18.9 billion last year.
• For all of 2017, the company reported $470 million worth of impairment losses, $234 million in restructuring and separation costs and $73 million in losses caused by Washington’s cancellation of cost-sharing subsidies.

Kaiser Family Foundation reported in November that although insurers are legally required to extend price reductions to marketplace customers who meet income qualifications, Washington has ceased delivering reimbursements to coverage providers.

Molina Healthcare has undergone significant changes since last May, when the company’s board of directors removed J. Mario Molina and John Molina from their respective positions of chief executive and chief financial officer.

The company subsequently undertook a nationwide streamlining, called Project Nickel, that included hundreds of layoffs affecting its Long Beach employees.

The company has also ceased managing 17 California clinics, two of which are in Long Beach. Golden Shore Medical Group, a company owned by J. Mario Molina, took control of the clinics early this year.