Medicaid-focused health insurer Molina Healthcare Inc (MOH.N) 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 (HUM.N) 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 75 cents.
"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)