Dive Brief:
- Oregon-based Moda Inc. announced three transactions Monday that raised a total of $115 million in capital to shore up the financially struggling health plan, the Portland Business Journal reported.
- This amount adds to a previous $50 million the health plan made in November 2015 through the sale of a surplus note, bringing the full capital raised to $165 million.
- Moda Health was ordered by Oregon's Department of Consumer and Business Services to generate the money as part of an agreement during a brief period of control by the department in early February. At that time the department asked Moda to raise $179 million to ensure it could continue to serve its customers without interruption.
Dive Insight:
Moda's financial status was in jeopardy as a result of $49.5 million in losses in 2015 and a shortfall of $170 million in federal risk corridors funding that never materialized.
Its three latest transactions include:
- Selling Dentists Benefits Insurance Co. and Northwest Dentists Insurance Co., which are separate from Moda's major dental insurance arm.
- Plans to sell the company's 57,000-square-foot plaza in Milwaukie.
- The securitization of risk corridor payments to a third party.
“This increased capitalization of our health plan positions us to refocus our efforts,” Moda Inc. President and CEO Robert Gootee wrote in a prepared statement. “Our diverse product portfolio, both for groups and individuals, is now well supported by a capital base that allows us to continue to recover from the unanticipated shortfall in risk corridor payments announced by CMS last fall.”
While it can project better financial standing, Moda is down to 62,5983 enrollees in the individual market from 95,000 last year, the Portland Business Journal noted.