In an effort to keep you informed on the recent Moda developments, we believe this Oregonian article provides a good representation of the current situation. We will continue to keep you informed as we learn new information.
By Jeff Manning, The Oregonian, Feb. 4, 2016
Portland insurer Moda Health Plans, beset with tens of thousands of sick, expensive customers, ate through at least $100 million in capital reserves in 2015.
By year's end, the state's third-largest insurer had just $21 million in capital, far below what regulators considered acceptable, setting the stage for the state's bombshell "supervision" order that gives regulators final say over all major financial decisions at Moda.
Since issuing its order, the Oregon Division of Financial Regulation has refused to divulge many details of Moda's financial issues. Their counterparts in Alaska, who issued their own order of impairment against Moda last week, have been more forthcoming.
In the Alaska order, regulators said they based their action on new financial information from Moda about its dreadful fourth quarter. The company lost nearly as much in the quarter as it had in the first nine months of the year, pushing its 2015 loss to beyond $58 million.
Worse, by January, Moda's total capital had plummeted to $21.6 million, down from $120 million a year ago. This despite the $50 million loan Moda Health Plans took out from its parent company in November and an earlier $50 million loan from Oregon Health and Sciences University in November 2014.
Alaska officials said they got the updated financial information from Moda's chief financial officer in an email.
Moda officials declined to comment. In prior statements, it has acknowledged it priced its individual insurance policies too cheaply.
The company's financial plight was worsened when the federal government reneged on its promise of financial assistance to companies that played an active role in the insurance markets created by the Affordable Care Act.
To regain some financial health, the state is requiring Moda to raise significant new capital or to downsize. State officials said Moda has chosen the latter option and will exit the individual insurance market, a decision that throws some 67,000 Moda customers into limbo.
Oregon regulators have said it's possible they will stage a new open-enrollment period for the Moda customers to find policies. The state is expected to announce Friday how this process could work.
Dawn Bonder, former chief executive of Health Republic, another insurer that struggled in the post Affordable-Care-Act era, predicted few other insurers will be eager to take on customers that proved so unprofitable for Moda.
"The Insurance Division may put out the invitation to other carriers -- 'who's willing to take these customers,'" Bonder said. "Who can afford to take these members?
"I will be surprised if we see a volunteer," Bonder continued. "This is a body of members that is losing hordes of money every year."
Consumers are frustrated and uncertain. Many just signed up with Moda in the open-enrollment period that ended in January. They worry their premiums could go up or that the deductibles and out-of-pocket payments they've already made won't count under their new policy.
"They're fearful," said Rick Skayhan, a Portland insurance broker. "Nobody's happy about where we are now."
Find the original article here.