Insurance regulators in Alaska and Oregon announced Monday that they have lifted the suspension of embattled health insurer Moda Health.
Previously, both states had suspended the carrier from accepting new or renewal policies from residents, citing concerns with Moda’s financial status.
Now, however, the Alaska Division of Insurance and the Oregon Department of Consumer and Business Services say they’ve reached an agreement with Moda that will allow it once again to sell new policies to both individual and group customers in both states.
In a news release, Alaska officials said both they and Oregon regulators reached an agreement with Moda over the weekend that allows the company to stabilize its finances while continuing to offer coverage. Specifically, Moda’s parent company – Moda Inc. – will inject the insurer with $170 million in new capital.
Moda will also sell a portion of their accounts receivable to a third party and its parent company will sell other, unspecified assets and borrow more money to ensure the group’s financial strength.
In Alaska, regulators additionally required Moda to deposit $15 million in a bank account in order to backstop its policyholders in the state.
Oregon Insurance Commissioner Laura Cali called the agreement “the least disruptive course” for consumers.
“This really leads to a situation that’s a whole lot less disruptive for consumers,” Cali told The Oregonian. “They don’t have to worry about finding a different plan or doctor and they don’t have to take any action to make sure they remain covered.”
Moda is a large player in the Pacific Northwest, and the third largest in Oregon with 67,000 policyholders. It seized on the advent of the Affordable Care Act with low-priced policies, only to find enrollees were much sicker, and consequently more expensive, than anticipated. Moda’s financial health only worsened when promised government aid was canceled through a congressional vote.
All told, the company had just $21 million in capital at the end of 2015 – a level far below what regulators consider acceptable.
Further details of the agreement with regulators in Alaska and Oregon were not released, but the company will update both states with financial reporting more frequently and promises there will be no further disruptions for current consumers.
“Since January 27, we have been working through the process of assuring DCBS of our ability to continue to service our individual customers in Oregon and Alaska,” Robert Gootee, CEO of Moda Inc., said in a statement.
“They have done an excellent job of quickly analyzing a difficult and rapidly changing set of circumstances. We’re pleased that, together, we now have reached an agreement on a path moving forward that ensures Moda members will see no interruption in coverage.”
