Molina Healthcare posts $230M loss for Q2, touts restructuring plan that includes ACA exits, layoffs

Roughly two months after California-based health system Molina Healthcare fired its CEO and CFO over "disappointing financial performance," newly posted figures paint a dim picture of that performance.

Molina posted a net loss for Q2 2017 of $230 million, or $4.10 per diluted share. That's compared to this time last year, which showed a net income of $0.58 per diluted share. Molina blamed the poor performance on high medical care costs and struggles with their ACA insurance marketplace business, naming Florida, Utah, Washington and Wisconsin as the poorest performers.

"In the past, we have been focused on top line growth, often at the expense of bottom line results," said Joseph White, chief financial officer and interim president and chief executive officer of Molina Healthcare. While we expect to enjoy continued RFP and organic growth in our Medicaid managed care business, we are now intensively focused on improved operating performance and efficiency as the path to greater profitability and shareholder returns."

[Also: Molina Healthcare shuts down online patient portal over potential data breach]

They also said they incurred $43 million in "restructuring and separation costs"  due to required termination benefits paid to fired CEO J. Mario Molina and his brother and CFO John C. Molina.

In light of the "disappointing" financial results, Molina unveiled a massive restructuring plan that means ACA exits and more than a thousand layoffs. The plan, which is now underway, is expected to reduce expenses by $300 to $400 million by its completion in 2018. It includes $200 million in staff reductions, which amounts to approximately 10 percent of its corporate and health plan workforce or 1,500 full-time-equivalent employees.

[Also: Molina Healthcare board fires CEO, CFO after poor financial performance]

Molina will also be pulling out of the ACA insurance exchanges in Utah and Wisconsin effective December 31, 2017. They will also be reducing their presence in the Washington Marketplace in 2018. In their remaining marketplaces, Molina said they will raise premiums by 55 percent. They said the spike takes into account the absence of cost sharing reduction payments. Were they to be funded in 2018, the premium hike would have been 30 percent.

"We continue to closely monitor the current political and programmatic developments pertaining to our 2018 participation in other Marketplace states, and subject to those developments, will withdraw from 2018 participation as may be necessary," Molina said.

Twitter: @BethJSanborn