Risk From Rising Medical Costs Outpacing Rate Increases

27 days ago

Steve Gorelik

"if medical costs continue to go up faster than the rates, you could have irrational policy that impacts Medicaid in general. And you could see that ... the period in which the profitability will be lower will be extended."

A key risk highlighted for Molina is that rapid increases in medical costs—driven by factors such as redetermination effects, increased utilization of behavioral health services, and higher procedural costs—could outpace the upward adjustments in premiums. This mismatch could extend the period of thin profitability across the industry, though Molina’s efficiency still allows it to remain profitable relative to peers.

Related Stocks