The Oregon Department of Consumer and Business Services is putting a major player in the state’s health insurance market, Moda Health Plan Inc., under an order of immediate supervision.
Oregon regulators believe they have to take immediate action because the health service contractor reported a $31 million net operating loss for the first three quarters of 2015.
Based on the latest loss data, Moda needs $64 million in capital and surplus to stay in business, but it ended the third quarter with just $53 million in capital and surplus, according to an order issued Thursday by the Oregon department.
The department told Moda to show them, within seven calendar days, how it will get a big enough of an infusion of capital to support its 2016 business, and to give them a business plan by the end of the day Friday, January 29, 2016, indicating how the company “can be a viable going concern beyond Dec. 31, 2016, without need for further capital infusions,” according to the order.
If Moda’s capital and surplus total falls below $17.5 million, the department director “will petition for Moda to be placed under immediate rehabilitation,” according to the order.
Under the order, the department is requiring Moda to stop selling new health coverage policies or renew existing policies. The department is also requiring the company to “budget its operations to eliminate unnecessary or excessive expenses.
The Oregon department has appointed Laura Cali, the state’s insurance commissioner, to supervise Moda.
In a press release, the department said it will start working with Moda to transfer individual market plans to another carrier.
Company representatives were not immediately available to comment on the news.