Why This Landed on My Radar
Molina Healthcare just announced they’re pulling out of Medicare Advantage markets in Connecticut, Mississippi, and Nevada - adding to their earlier decision to end all individual MA sales nationwide next year. When a major payer retreats from MA this dramatically, it’s not just their problem - it’s a signal about the underlying economics of these contracts that every independent practice needs to understand, especially those of us still trying to make MA work in Texas.
Here’s What’s Going On
Molina Healthcare, a significant player in government-sponsored health plans, is executing a strategic retreat from the Medicare Advantage market. They’ve already announced they’re ending all individual MA sales nationwide in 2027, and now they’re specifically exiting three state markets entirely. While Texas isn’t on this initial exit list, the move reflects broader industry turbulence in MA.
This isn’t happening in a vacuum. MA plans have been squeezed by rising medical costs, particularly the explosion in GLP-1 utilization, increased inpatient costs post-COVID, and CMS payment rate pressures. When you layer in the V28 HCC risk adjustment changes that went into effect, plans that weren’t already doing sophisticated risk capture and care management are bleeding money. Molina’s exit suggests they’ve done the math and decided some MA markets just don’t pencil out anymore - even for a payer that built its business on Medicaid and government programs.
The timing matters because we’re heading into the 2027 Annual Election Period with fewer plan choices in some markets and likely more volatility ahead. For those of us on the provider side, this is a canary-in-the-coal-mine moment about MA sustainability.
What This Means for Your Practice
Here’s the thing nobody wants to say out loud: if Medicare Advantage isn’t working for payers, it’s probably not working for most independent practices either. We’ve been chasing these contracts because that’s where the patients are, but the economics have fundamentally shifted.
In Texas, where BCBS and United dominate the commercial market and we’re already dealing with the largest uninsured population in the nation, MA has felt like the one stable revenue stream. But Molina’s exit is a reminder that these contracts are only as good as the risk-adjustment revenue you’re capturing and the care management overhead you can afford. With V28 changes, plans are paying more attention than ever to HCC coding accuracy - which means if you’re not capturing every diagnosis your patients actually have, you’re leaving money on the table and you’re less valuable to any MA plan considering their network.
The rural practices among us face an even tougher equation. If plans are pulling out of entire states, critical access areas are the first to lose coverage options. That means more patients scrambling during AEP, more administrative chaos for our front desk, and potentially getting stuck with whatever plan remains - on their terms, not ours.
But here’s the opportunity hiding in this mess: practices that have invested in accurate documentation, smart HCC capture, and efficient care management workflows are becoming increasingly valuable to the plans that remain. When Molina exits and patients need to switch plans, the practices that can demonstrate quality scores, risk-adjusted performance, and low total cost of care will have leverage in negotiations. The rest will be price-takers.
This is also why diversifying beyond MA matters more than ever. The GLP-1 surge we’re seeing creates a direct-pay revenue opportunity that isn’t dependent on payer whims. Same with optimizing your traditional Medicare and commercial mix.
Key Takeaways
- Molina’s MA exit signals broader industry economics that affect all MA contracts - if a Medicaid-focused plan can’t make MA work, the model is under real stress
- V28 HCC accuracy is now table stakes - plans will increasingly narrow networks to providers who document and code properly, especially as competition decreases
- Don’t put all your eggs in the MA basket - payer exits can happen faster than you think, and patient disruption is costly for practices
- Your leverage depends on demonstrable performance - quality scores, risk capture rates, and care management outcomes matter more when plans have fewer providers to choose from
- Rural practices face existential risk - if you’re in a market where plan options are already thin, start building relationships with remaining payers now
What Smart Practices Are Doing
The sharpest independent practices I’m talking to are treating this as a wake-up call to audit their MA performance across the board - not just revenue, but actual profitability per MA patient when you factor in all the administrative overhead. They’re investing in systems that make HCC capture automatic rather than hoping physicians remember to document every diagnosis, and they’re having hard conversations about which MA contracts are actually worth renewing. Some are also building out cash-pay service lines (medical weight management, executive physicals, chronic care coordination) that create revenue stability independent of payer volatility.
Source
Molina to quit Medicare in 3 states - Modern Healthcare
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