Moda Health will be allowed to resume operating its health insurance business in Alaska and Oregon following an agreement that the company raise at least $179 million in capital this year, the Alaska Division of Insurance announced Monday.
"They've taken the high road and said, 'We're going to do everything we can to make this work,'" said Lori Wing-Heier, director of the division.
The announcement that Moda will stay in Alaska follows less than two weeks after Wing-Heier said that the Portland, Oregon-based health insurance company didn't have enough capital to safely operate in the state in 2016. At the end of 2015, Moda reported a net loss of $58 million.
Robert Gootee, chief executive officer of Moda's parent company, Moda, Inc., said on Jan. 28 that the company would exit Alaska and Oregon's individual health insurance marketplaces.
But by this weekend, Gootee had reached a consent agreement with the Alaska Division of Insurance and the Oregon Department of Consumer and Business Services about the company's financial future, Wing-Heier said. The agreement requires Moda to sell assets, borrow money using surplus notes, report its financial status more frequently and set aside $15 million to protect Alaskans if business goes sour.
Meanwhile, Moda will resume selling and renewing policies in the individual and group markets under the Affordable Care Act, or Obamacare. This means the 14,500 Alaskans who have coverage with Moda won't have to change their insurers.
"We've done everything we can to protect consumers, but still allow Moda to transact business and build that book back up," Wing-Heier said. She said she was confident Moda would be able to raise the new capital by the end of 2016.
Wing-Heier said the division was asking the federal government to get a special, 10-day open enrollment period for Alaskans affected when the state suspended Moda's operations. Open enrollment ended Jan. 31.
Alaskans with both individual and group Moda policies should continue to submit claims and should not expect any changes in their premiums and benefits, Wing-Heier said.
"Hopefully this is something we can put behind us," she said. "I would ask that providers who have been leery of accepting the Moda card as payment — that they please start accepting it again."
Wing-Heier said she could not disclose the specifics of Moda's business plan and what assets it would sell to raise capital. Jonathan Nicholas, Moda Health's vice president of marketing, declined to answer questions Monday but provided a statement from Gootee who praised Oregon and Alaska for "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," Gootee said in the statement.
If Moda does not complete all of the requirements laid out in the consent agreement, the state of Oregon would assume full control of the company and could decide to liquidate it, according to the Division of Insurance.
Moda is one of two health insurance companies offering plans on Alaska's federally run health insurance marketplace, healthcare.gov. The other, Premera Blue Cross Blue Shield, typically has plans with higher premiums, said Aimee Crocker, vice president of insurance brokerage Enroll Alaska.
"I think there's a lot of concerns about prices," she said. "So I think -- all in all -- this will just relieve the stresses knowing there will be two providers."
Wing-Heier said that while Moda is committed to staying in Alaska in 2016, it's up to the company to decide if it will stay next year as well. The Division of Insurance would approve the company's health insurance plans and rates for 2017 by this summer.
Alaska Dispatch Publishing