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Chief financial officer Mark Keim is taking the reins of the health insurer’s bread-and-butter business — Medicaid — along with a growing marketplace division.
Published Sept. 4, 2024
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Molina is expanding a high-level executive’s role as the health insurer continues to face notable challenges in its core Medicaid business.
Chief financial officer Mark Keim is assuming leadership of Molina’s Medicaid health plans and Affordable Care Act marketplace businesses, in addition to his current responsibilities, the insurer announced Wednesday.
A spokesperson for Molina did not respond to multiple requests for comment on the reason behind the appointment, though CEO Joe Zubretsky called the move a “natural evolution” of Keim’s strategic development skills in a press release. But the Long Beach, California-based health insurer is granting Keim direct oversight of its largest business, Medicaid, as it deals with significant operational headwinds.
States are currently rechecking Medicaid beneficiaries’ eligibility for the coverage, resulting in millions of Americans losing Medicaid. That’s affecting payers like Molina in states where they’re contracted to cover Medicaid care.
People remaining on Medicaid are likely to be older and sicker, causing insurers to shoulder more costs.
Molina’s Medicaid medical loss ratio — a marker of how much in premiums an insurer shells out on patient care — was 90.2% in the first half of the year, notably higher than 86.8% in Medicare and 72.4% in its Affordable Care Act marketplace plans.
Generally, the lower the MLR the more premium revenue payers are able to retain as profit.
As a result of higher spending on patient care, Molina’s profit margin from offering Medicaid plans has been shrinking, according to financial documents from the first half of the year.
However, this likely isn’t a long-term headwind. The most drastic mismatches between rates and acuity are expected to abate in the second half of the year as states adjust their rates, according to insurance market experts.
Despite the uncertainty of Medicaid unwinding, Molina still performing above Wall Street forecasts. In second-quarter results released in July, new Medicaid contract wins and expansion of existing business caused Molina’s revenue to jump 19% year over year to $9.9 billion.
The insurer posted a profit of $301 million, down slightly year over year but still better than analysts expected.
Keim is also assuming oversight of Molina’s marketplace business, which is a small but growing segment of the company. Molina has invested in expanding its ACA footprint, including through a planned $350 million purchase of ConnectiCare announced earlier this summer.
Keim joined Molina in 2018 as the executive vice president of strategic planning and corporate development before being named CFO in 2021. Prior to joining Molina, the 59-year-old executive held leadership roles at companies including Aetna and General Electric.
Paul Schmeltzer