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Rick Bowmer / AP

Molina Healthcare lost $230 million in the second quarter this year — catching investors, who expected a slim profit, off guard. The Affordable Care Act exchanges wreaked havoc on the health insurer, which is pulling out of Utah and Wisconsin, pruning its participation in other states and laying off 7% of its workforce. Most of Molina's business is in Medicaid contracts with states.

The numbers: $230 million net loss, compared with a $33 million profit in the same period a year ago. Revenue increased 15% to $5 billion. Molina will cut expenses by up to $400 million by the end of next year — $55 million has already come from layoffs and restructuring.

What happened: Molina, which had previously made a profit with its ACA plans, largely miscalculated the medical costs of its ACA enrollees. The company experienced huge losses in Florida, Ohio, Utah, Washington and Wisconsin. In the areas where Molina is staying, the insurer will hike premiums for its ACA plans by 55% on average, partially blaming the "uncertainty around the funding of marketplace cost-sharing subsidies." Molina is a sizable ACA player, but nearly all people losing Molina coverage will have another option in their area.

More on the restructuring: Aside from the layoffs, Molina will cut vendor costs and restructure contracts with hospitals and doctors it considers to be "high-cost."

Of note: This is the first quarter for Molina since the company fired CEO Mario Molina and CFO John Molina, brothers whose father founded the company in 1980. Their firings cost the company $43 million in the quarter. Molina said it was "encouraged by the response" for the open CEO position.

Go deeper

Off the Rails

Episode 4: Trump turns on Barr

Photo illustration: Eniola Odetunde/Axios. Photos: Drew Angerer, Pool/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. Axios takes you inside the collapse of a president with a special series.

Episode 4: Trump torches what is arguably the most consequential relationship in his Cabinet.

Attorney General Bill Barr stood behind a chair in the private dining room next to the Oval Office, looming over Donald Trump. The president sat at the head of the table. It was Dec. 1, nearly a month after the election, and Barr had some sharp advice to get off his chest. The president's theories about a stolen election, Barr told Trump, were "bullshit."

In photos: Protests outside fortified capitols draw only small groups

Armed members of the far-right extremist group the Boogaloo Bois near the Michigan Capitol Building in Lansing on Jan. 17. About 20 protesters showed up, AP notes. Photo: Seth Herald/AFP via Getty Images

Small groups of protesters gathered outside fortified statehouses across the U.S. over the weekend ahead of President-elect Joe Biden's inauguration Wednesday.

The big picture: Some protests attracted armed members of far-right extremist groups but there were no reports of clashes, as had been feared. The National Guard and law enforcement outnumbered demonstrators, as security was heightened around the U.S. to avoid a repeat of the Jan. 6 U.S. Capitol riots, per AP.

Felix Salmon, author of Capital
9 hours ago - World

China's economy grows 6.5% in Q4 as country rebounds from coronavirus

A technician installs and checks service robots to be be used for food and medicine delivery in Jiaxing, Zhejiang Province, China, on Sunday. Photo: Hu Xuejun/VCG via Getty Images

China's economy grew at a 6.5% pace in the final quarter of 2020, the national statistics bureau announced Monday local time, topping off a year in which it grew in three of four quarters and by 2.3% in total.

Why it matters: No other major economy managed positive growth in 2020. Although the COVID-19 pandemic was first detected in China, the country got the virus under control and became one of the main positive drivers of the global economy even as the rest of the world was largely under lockdown.