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Moda Health will keep doing business with new cash

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Moda will have $179 million in new cash, allowing it to service its current members.


Struggling Oregon health insurer Moda Health will be able to keep doing business in Oregon by generating nearly $180 million in new capital, the state said Monday.

While details have not been disclosed, the broad outlines of the plan are contained in a state consent order between Moda executives and Patrick Allen, director of the Department of Consumer and Business Services, which regulates insurers.

"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," said Robert Gootee, CEO of Moda Inc., the parent company of Moda Health Plan, in a prepared statement. "They have done an excellent job of quickly analyzing a difficult and rapidly changing set of circumstances. We're pleased that together we have reached an agreement on a path moving forward that ensures Moda members will see no interruption in coverage."

The best news for Moda members: more than 60,000 Oregonians who'd bought coverage from Moda for 2016 won't have to change insurers, contrary to what state officials had thought.

"Initially, we thought it might be prudent for [Moda] to exit the individual market, but the steps outlined in the consent order instead will allow consumers to continue their health coverage with no changes," Allen said.

The move also means other insurers won't have to go through the headache of taking on new members after the coverage year had already begun.

On Jan. 27, the state had issued an order of supervision taking partial control of the company until it could generate more capital to offset future claims.

Under the new plan, Moda will sell a combination of assets, including some owned by its parent company, Moda, Inc. It will report more frequently to the state. And it will borrow more money in the form of surplus notes, on top of the $100 million the insurer borrowed last year.

Policyholders with questions can contact state consumer advocates for more information at 1-888-877-4894.