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(By Rebecca Pifer -Healthcare Dive) - Molina cut its 2025 earnings guidance for the third time this year. The earnings reduction is despite Molina now believing it will bring in higher premiums this year. Molina covers 5.6 million members in Medicaid, Medicare and ACA marketplace plans, citing doggedly high medical costs particularly in its ACA plans for its reduced earnings.

Close followers of insurers’ recent financial quarters know this story well. Payers are slogging through a difficult time, absorbing elevated medical spending from their members. The utilization pressure is particularly acute in government programs, making the trend more challenging for insurers without other businesses to fall back upon.

Molina, which covers 5.6 million members in Medicaid, Medicare and ACA marketplace plans, is one such insurer.

And now, the California-based company is lowering its profit guidance for 2025 once again, despite upwardly revising its expectations for premium revenue this year.

Medical cost growth was apparent in all of Molina’s business segments, but disproportionately high in the ACA marketplaces. CEO Joe Zubretsky called the ACA trend “unprecedented” during a Thursday morning call with investors.

The ACA is Molina’s second-largest business behind Medicaid, accounting for roughly one-tenth of its members and premium revenue. Last year, Molina grew its ACA presence for 2024, a move that appeared shrewd at the time given that the ACA exchanges appeared insulated from the costs hitting Medicaid and Medicare Advantage. However, the strategy has come back to bite the insurer, as the members it added for 2025 came saddled with higher costs themselves.

The problem isn’t unique to Molina. There’s been a market-wide increase in enrollees’ health needs that has outpaced checks and balances against spiking costs in the ACA risk pools.

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