Moda Health Swallows Multi-Million Dollar Loss from CMS
Moda Health has been stung by the Centers for Medicare and Medicaid and faces a $70.3 million loss in revenue following the implementation of the Affordable Care Act.
Insurers who experienced higher claims than the actual premiums they took in -- such as Moda -- had expected to recover some of those dollars under the “risk corridors,” program,with those dollars coming out of the pool representing insurers who had fewer claims and ended up with more dollars.
Instead of receiving $82.87 million, Moda is only getting back $10.4 million. Moda was surprised and disappointed by last week’s initial decision, according to Jonathan Nicholas, spokesman.
Officials at Moda have contacted CMS for further clarification. “In the meantime, we’re hard at work working through this and will need the next few days to fully digest the information, to secure answers to the many questions we have, and to determine how all this may impact us moving forward,” Nicholas said.
Other health plans in Oregon weren’t as hard hit. LifeWise, for example, is only getting back $500,000, after expecting $7.5 million, while Health Republic Insurance anticipated $9.2 million and the Oregon Health CO-OP, $1.9 million.
Overall, CMS said insurers throughout the country will receive $362 million in the first year of this three-year program, but were owed $2.9 billon.
Moda Health remains the overwhelming leader of the individual health insurance market, selling 98,000 -- 40 percent -- of 241,000 total plans sold both inside and outside of the exchange. Lifewise Health Plan is second with 45,000 plans, while Providence Health Plan is third at 29,000.
Regence BlueCross BlueShield of Oregon, which has chosen to keep its main brand off the exchange, sold 24,000 plans, second only to Moda Health on the off-exchange market.
Other health insurers have found their own niche -- Oregon’s Health CO-OP has the third-most popular bronze plan, while the other health co-operative, Health Republic, has the only platinum plan. Kaiser Permanente sold one of the more popular gold-level plans.
Moda Health will be hard-pressed to keep its post at the top of the individual health market, as its rates are going up an average of 25 percent. Similarly, Lifewise rates have skyrocketed 35 percent. Thrifty shoppers may gravitate to plans with cheaper 2016 premiums, including Kaiser, the CO-OP and Providence. Zoom Health Plan, a new entry on the exchange for 2016, will have the fourth-lowest cost health plan.
Diane can be reached at [email protected].