Molina Healthcare Inc., once a model for how to sell successfully on the public exchange market but more recently a company struggling to restructure, has a new CEO.
Molina has named Joseph Zubretsky as the company’s president and chief executive officer, effective Nov. 6. Most recently Zubretsky worked as president and CEO for The Hanover Insurance Group, a property and casualty insurer based in Worchester, Mass. At Molina, Zubretsky replaces interim chief executive officer Joseph W. White, who will retain his position as chief financial officer.
Zubretsky will be paid an annual base salary of $1.3 million and receive a signing bonus of $4 million. His three-year employment contract with Molina also makes him eligible for a performance bonus of up to 300% of his base salary, making his potential annual compensation to as much as $5.2 million.
Zubretsky takes over at a time when the insurer is cutting back on participating in the Affordable Care Act public exchange market and restructuring its core business. A year ago Molina Healthcare Inc., a commercial health insurer with an expertise in running successful public health insurance programs such as Medicaid and Medicare as a contractor and administrator, had high expectations for expanding its health exchange business.
But after several lackluster and at times tumultuous quarters of financial results, Molina says it will pull out of the public exchange markets in Utah and Wisconsin in 2018 and hints it may exit the health exchange market altogether.
“All of the exchange participation is up in the air right now,” chief financial officer and interim chief executive officer Joseph White told analysts yesterday on Molina’s second quarter earnings call, based on a transcript from SeekingAlpha.com. “As I like to say, with the company right now where we’re at, we have to do what the numbers suggest to us. The numbers kind of tell us what to do.”
The company, which ousted CEO Joseph Molina in May and announced a $400 million restructuring and cost-cutting plan, is taking several steps to reduce and possibility eliminate its marketplace business. Those steps include:
- Exiting the Utah and Wisconsin marketplaces on Dec. 31.
- Raising premiums in all other marketplace states by 55%.
As the new CEO Zubretsky will be charged with figuring out Molina’s next move—and future—in digital healthcare. He was hired in part because of his background in running healthcare companies with an emphasis on technology. Prior to running Hanover, Zubretsky served almost nine years at Aetna Inc., as CEO of Healthagen Holdings, a group of healthcare services and information technology companies. Prior to that, from 2013 to 2014, he served as senior executive vice president leading Aetna’s national businesses, a $10 billion business providing healthcare payer programs to multinational companies, and from 2007 to 2013 served as Aetna’s chief financial officer.
Molina reports third quarter earnings on Nov. 2.
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