Molina Healthcare Announces Support for HHS’ Efforts to Improve the Marketplace Benefit and Payment Parameters

Molina Healthcare, Inc. (NYSE: MOH) today announced support of the U.S. Department of Health and Human Services’ (HHS) recently released Notice of Benefit and Payment Parameters, which seeks to improve the risk adjustment program by providing policy and technical guidance related to the Affordable Care Act Marketplace.

The goal of the HHS risk adjustment program is to compensate health insurance plans for differences in enrollee health mix so that plan premiums reflect differences in scope of coverage and other plan factors, but not differences in health status. This allows fairer competition in the market and equalizes risk so that health plans can focus on competing on benefit design, quality efficiency and value rather than solely on price.

“We welcome the opportunity to work closely with HHS to ensure the risk adjustment program is as accurate and equitable as possible,” said J. Mario Molina, MD, President and CEO of Molina Healthcare. “We encourage HHS to make these and other improvements sooner rather than later to ensure a viable marketplace for the future, and we look forward to seeing the positive outcomes that will result from these actions.”

The proposed rule by HHS introduces several significant changes to make the risk adjustment program more effective at pooling risks. One recommendation is to incorporate prescription drugs in the risk adjustment model, which would lead to a more comprehensive picture of the severity of an illness and fill in gaps where diagnoses data may be missing from medical claims. Another change would be the consideration of better estimate techniques. These techniques would more accurately reflect the predicted risk of low-cost enrollees, which are under-accounted for in the current model. Lastly, the removal of administrative and other non-medical related costs from the risk transfer formula would eliminate the transfer of risk adjustment dollars that are unrelated to enrollee’s health.

Molina currently serves nearly 600,000 Marketplace members across nine states in which the company already offers other government-sponsored programs, such as Medicaid and Medicare. These states include California, Florida, Michigan, New Mexico, Ohio, Texas, Utah, Washington and Wisconsin.

About Molina Healthcare, Inc.

Molina Healthcare, Inc., a FORTUNE 500 company, provides managed health care services under the Medicaid and Medicare programs and through the state insurance marketplaces. Through our locally operated health plans in 12 states across the nation and in the Commonwealth of Puerto Rico, Molina serves approximately 4.3 million members. Dr. C. David Molina founded our company in 1980 as a provider organization serving low-income families in Southern California. Today, we continue his mission of providing high quality and cost-effective health care to those who need it most. For more information about Molina Healthcare, please visit our website at molinahealthcare.com.

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Molina Healthcare, Inc.Investor Relations:Juan José Orellana, 562-435-3666orPublic Relations:Sunny Yu, 562-477-1608