NEW YORK (Reuters) - Insurer Molina Healthcare Inc (MOH.N) on Thursday said that if the U.S. government does not make promised cost-sharing subsidy payments for Obamacare individual insurance plans, it will drop 650,000 to 700,000 members this year and leave the program in 2018.
The cost-sharing subsidies are part of the Affordable Care Act, often called Obamacare, and reduce out-of-pocket costs for Americans. Congress and President Donald Trump, who are seeking to repeal and replace Obamacare, have threatened to cut off these payments.
On Wednesday, the White House said it would make the payments for now but made no commitment about the future.
Molina Chief Executive Dr. Mario Molina told Congress in a letter that without the payments, the company would consider the government in default and drop its contracts for failure to pay premiums.
The company, would then withdraw from the marketplace next year.
His comments follow those of Anthem Inc (ANTM.N) CEO Joseph Swedish on Wednesday, who has also said that non-payment of the subsidies would mean changes to the company’s 2018 Obamacare plans. Swedish said he needs to know by June.
Molina, who has criticized the Trump administration and Congress for proposed policies that will cut subsidies and reduce the Medicaid program for the poor, has more than 1 million people in Obamacare plans this year, about 9 percent of total enrollment.
About 65 percent of Molina’s members qualify for the income-based subsidies, it said. It sells these plans in California, Florida, New Mexico, Michigan, Ohio, Texas, Washington, Wisconsin and Utah.
Molina shares were up 4 cents at $48.61 on the New York Stock Exchange.
Reporting by Caroline Humer; Editing by Steve Orlofsky