While the exit of other insurers has been problematic, a withdrawal by Molina “would be hugely damaging,” said Sabrina Corlette, a research professor at Georgetown University.
The reaction from other insurers has been muted, and the companies seem relieved that they are not being vilified in the way they were during the last debate over the Obama administration’s health care plan. This time, many seem eager to stay out of the fray.
Anthem, a large insurer that also has a sizable presence in the market, went so far as to write a letter this month to Congress praising the Republican efforts. “The American Health Care Act addresses the challenges immediately facing the individual market and will ensure more affordable health plan choices for consumers in the short term,” said Joseph R. Swedish, Anthem’s chief executive.
Other companies are clearly uneasy. Humana has already announced its plans to leave the individual marketplaces in 2018, and few, if any, insurers have committed to staying in the individual marketplaces. Compounding the uncertainty of whether the markets will be steady enough to remain in is the looming deadline that companies face as they weigh whether to raise prices. For some, these next few weeks are crucial; some states require insurers to file notice of potential rate increases as early as April.
“They don’t have any real clear idea or even see what a real clear path forward is going to look like,” said Kevin G. Fitzgerald, a lawyer who specializes in insurance for Foley & Lardner. “Their business is months in the planning and sometimes years in the execution. They don’t even know if there will be an exchange in 2018.”
The G.O.P. bill sharply cuts the Medicaid program, which would result in states bearing a much greater share of covering their lower-income residents. Republicans say the bill aims to give states more flexibility in how they spend Medicaid money. Dr. Molina dismisses the argument as “a red herring,” masking the fact that federal Medicaid funding will drop by nearly $900 billion over the next decade if the House bill goes through.
Republicans seem largely focused on the near-term politics of getting their legislation through Congress, but they also are gambling that blame won’t shift to them if the markets collapse.
“The chaos that Obamacare has created, and for which congressional Democrats — and you see that — are alone and responsible for requires swift action,” President Trump said in a meeting with major insurance executives last month.
Dr. Molina is having none of it. “If the market is destabilized in 2018, it really falls on the Republicans,” he said. “The administration and Congress have the ability to act in ways to stabilize the market.”
Insurers have supported the Trump administration’s steps so far, and they back a provision in the House bill establishing a $100 billion fund aimed at helping cover the cost of very sick customers.
Still, Congress has an important negotiating tool: a key program that helps low-income individuals with out-of-pocket costs, known technically as “cost-sharing reductions.” House Republicans brought a lawsuit to stop what it claimed was illegal funding of the program, worth $7 billion to the insurers last year. The lawsuit is suspended, and Congress needs to officially appropriate the money for the program if the insurers are to get all of what they are owed this year or any other year.
“They’ve been silent on this,” Dr. Molina said. “I interpret this as a veiled threat to the industry.”
Other groups, including the associations representing the nation’s hospitals and doctors, have come out strongly against the Republican proposals. The American Hospital Association is airing 30-second television ads urging Congress to protect people’s insurance coverage.
A soft-spoken individual, Dr. Molina, 58, displays a dry sense of humor, as when he recently joked with investors about showing them vacation photos rather than discussing the company’s dismal financial results. The company’s stock, which traded near $60 a share earlier this year, has lost about 25 percent of its value since Molina announced its 2016 results last month.
But he is the most vocal of his peers about the havoc he says the Republican proposals will mean for customers. “I think many in the industry are afraid,” said Dr. Molina, who said he decided to speak out after being urged to by two close friends, one a retired insurance executive and another an AIDS advocate. “You need to say these things,” he said he was told. “You can’t duck your obligations.”
But Dr. Molina was not invited to last month’s White House meeting with President Trump.
Instead, Dr. Molina has made his case with lawmakers on Capitol Hill and insists they seemed receptive. “Our people have very meticulously analyzed this, and we can speak credibly about what all this means,” he said.
His concerns are shared quietly by much of the industry. In addition to worrying about adequate funding so low-income people can afford coverage, insurers are increasingly anxious about how to encourage healthy people to sign up, which balances out the costs of those who have high-cost medical conditions and results in lower average premiums.
The proposed Medicaid cuts may have more far-reaching implications than marketplace instability for a broad range of insurers. Companies that have already largely exited, including heavyweights like UnitedHealth and Aetna, view Medicaid as core to their business as states have increasingly turned to private insurers in recent years to offer plans to low-income residents.
“Medicaid has been a profit center for many insurers, and those profits could be threatened if Medicaid is capped,” said Larry Levitt, a senior executive at the Kaiser Family Foundation.
Molina is particularly vulnerable. About 86 percent of its customers relied on some form of Medicaid last year, and 16 percent were enrolled as a result of the expansion of the program under the federal law.
Dr. Molina is warning governors that the House bill could burden their states with much more of the program’s costs. “This is something they haven’t come to grips with,” he said. “This is the old unfunded mandate business.”
He and other companies are also making the case to the administration that the insurers have already succeeded in lowering costs. Dr. Molina points to states like Ohio, where insurers were able to save the state money under managed care.
The company, which operates its own medical clinics in some states, sees patients like Josie Romero, 65, who has been going to doctors in Long Beach, where Molina is headquartered, for the past 15 years. The number of patients with insurance in Molina’s clinics has surged through the federal law, but many have become concerned about whether their coverage will continue and whether they will still be able to see specialists.
“I listen to the news,” Ms. Romero said. “Everybody’s kind of worried.”