2018 MIDTERM ELECTION

Time: D H M S

UPDATE: Alaska: Ugh: Moda's definitely out; 14K likely to shift to Premera next year.

Hat Tip To: 
Louise Norris

Back in January I noted that Moda Health Plans, which had plenty of self-inflicted wounds in addition to being kneecapped by the Risk Corridor Massacre, was dropping out of the Oregon exchange and likely the Alaska exchange as well, so today's news isn't a big surprise.

Even so, this is definitely a major problem for the Alaska individual market, which was already extremely expensive prior to the ACA and which now only has a single insurance carrier participating (h/t to Louise Norris):

The individual market in Alaska has just two carriers in 2016: Moda and Premera. Both have struggled with significant losses under the ACA, and Moda nearly exited the Alaska market altogether in late January (more details below).

Although Moda was ultimately able to remain in Alaska’s individual market in 2016, the carrier has confirmed that they’re exiting the state’s individual medical market at the end of 2016. They will continue to offer individual dental coverage, along with medical coverage in the group market. But their 14,000 members who have health insurance in the individual market – both on and off-exchange – will need to switch to a plan from Premera for 2017.

Moda has said that they will revisit this decision next year, and the carrier might eventually return to the individual market in Alaska. But they noted that “the market requires significant reform in order to be sustainable for Alaskans and for Moda.” Moda’s Director of Alaska Sales & Service, Jason Gootee, explained that “our preliminary calculations showed that we would need a significant premium increase in 2017 to be sustainable on the individual market. At some point, you can’t keep passing these significant costs on to consumers.” Gootee noted that the decision was a difficult one for Moda.

With Moda’s exit, and assuming no other carrier replaces them, Alaska’s exchange will have just one carrier offering plans in 2017. That will also be the case in Wyoming and Oklahoma, assuming other carriers don’t join those markets. Premera is expected to file rates for 2017, and they have until May 11 to do so. But they’ve made it clear that they cannot continue to absorb losses in the individual market.

This raises a legitimate question: What happens if Premera were to drop out as well, leaving no insurance carriers participating in the exchange...or participating in the individual insurance policy market whatsoever (even off-exchange)?

The ACA Co-Ops were set up partially to provide some competition in states which only have one or two carriers, or as a fallback in cases where there aren't any carriers on the exchange...but there's only about 10 of those left, and none are located in Alaska, Wyoming or Oklahoma.

UDPATE: Louise notes, however, that Moda may end up staying on the Oregon exchange next year, as they've managed to arrange for $165 million in additional funding by selling off some properties/business lines, among other things:

Moda Inc. today announced three transactions totaling $115 million to stabilize the financially shaky health plan:

  • The sale of Dentists Benefits Insurance Co. and Northwest Dentists Insurance Co. to the Dentists Insurance Co., based in Sacramento, and an underwriter of professional liability policies.
  • The planned sale of the 57,000-square-foot Moda Plaza building in Milwaukie.
  • The securitization of risk corridor payments to a third party.

Along with a $50 million sale of a surplus note to Moda Inc. last November, the total capital raised comes to about $165 million.

...The company has 62,5983 customers in the individual market, down from 95,000 last year.