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Medicaid cuts are ‘going to affect everyone,’ insurance CEO says

March 9, 2017 at 6:25 PM EDT
Dr. Mario Molina of Molina Healthcare, an insurance executive whose business is focused on Medicaid patients, is concerned about the way the Republican plan to replace the Affordable Care Act will not only affect patients on Medicaid, but cause major economic ripples for states and the health care system. Molina joins William Brangham to discuss what he sees as at stake.

WILLIAM BRANGHAM: So, let’s pick up where Judy and Julie Rovner left off and hear from an insurance executive whose business is focused on Medicaid patients and who is concerned about these potential changes.

Dr. Mario Molina is CEO of Molina Healthcare, which offers insurance through the Obamacare exchanges and contracts with the government for Medicaid. It operates in 13 states.


MARIO MOLINA, CEO, Molina Healthcare: Thank you.

WILLIAM BRANGHAM: So, you just heard the conversation about the changes that are — the proposed changes to Medicaid. And you obviously have a lot of people under your umbrella who receive Medicaid. What’s your concern?

MARIO MOLINA: Well, I’m very concerned about the long-term funding of the program.

One of the members of Congress said yesterday, if you have Medicaid today, you’re going to have Medicaid tomorrow and things are going to be fine. But that’s only partially true, because, beginning in 2020, there are going to be major cuts to Medicaid, and people who have gotten coverage through the ACA may lose it.

And people that have had coverage through traditional Medicaid may lose it as well. As you heard, the two biggest things in the state budget are Medicaid and education. And so you’re going to see competition between funding Medicaid and funding education.

And so states are going to have the make cuts to one program or the other, or they’re going to have to raise taxes. But the burden for paying for health care for low-income people is being shifted to the states.

WILLIAM BRANGHAM: The GOP, for years, not just with regards to Obamacare, has said that Medicaid is too big, costs the government too much, costs the states too much, and that they have to control these costs.

What is your response to that?

MARIO MOLINA: Well, you know, the CBO has looked at this. And they have found that the most cost-effective way of covering low-income people is actually through Medicaid.

Medicaid accounts for 50 percent of all births in this country. One-third of all the children are covered under Medicaid, and it pays for half of long-term care. So it’s a big program that covers 72 million people.

WILLIAM BRANGHAM: You obviously, I understand, have some concerns about what this means for the Obamacare exchanges and for the individual marketplace as well.

What are your concerns in that regard?

MARIO MOLINA: Well, right now, we cover about a million people under the marketplace.

And these are people who are working, but their employers don’t offer them insurance. And they’re getting subsidies that allow them to purchase insurance. And they are going to be threatened.

WILLIAM BRANGHAM: Obviously, there are a lot of other larger insurance companies, larger than yours, who have expressed a lot of concern with the exchanges. And what have you heard from them about their concerns?

MARIO MOLINA: Well, most of the big insurance companies have gotten out. United is out. Aetna is getting out, Humana, Cigna.

So the major insurance companies that you traditionally think of as employee — take care of employer-sponsored care are really not participating. This is being left to smaller insurers, those that focus on Medicaid, and many local companies like not-for-profits or Blue Cross or Blue Shield plans.

WILLIAM BRANGHAM: I know you have been on the Hill and talking to a lot of members of Congress. What do you tell them when they’re in the midst of this debate right now? What have you been saying to them?

MARIO MOLINA: Well, you know, we have been trying to educate them about what this is going to mean for the average American and then the ripple effects through the economy.

So, for example, there was a study done by the University of Michigan that showed this was going to put about $400 million into the Michigan economy. That’s going to go away. And it’s going to have a ripple effect.

Many smaller rural hospitals are likely to go out of business. And so, even if you have private insurance, you have difficulty getting access to care, because your community hospitals may be gone. The E.R. is going to be crowded with people who were insured and now have no place to go.

So it’s going to affect everyone, regardless of what type of insurance you have.

WILLIAM BRANGHAM: All right. Dr. Mario Molina, thank you very much.

MARIO MOLINA: Thank you.