UPDATED: Congratulations, Marco Rubio! You may have just helped kill a PRIVATE insurance carrier!
2018 MIDTERM ELECTION
Time: D H M S
Hey, remember the Risk Corridor Massacre?
Remember how the Risk Corridor program was put in place specifically to help guide insurance carriers through the rocky, turbulent, confusing waters of the early years of the ACA exchanges by mitigating massive premium rate miscalculations the first few by having carriers which did better than expected chip into a kitty to be passed out to those which missed the target for the first 3 years?
Remember how the carriers which lost money the first year were really, really counting on those Risk Corridor funds to be there to help cushion the blow?
Remember how, just over a year ago, Sen. Marco Rubio came up with the brilliant idea of cutting off the Risk Corridor program at it's knees, then cramming that idea into the "must-pass" CRomnibus bill?
Remember how as a result, when it came time to start doling out the RC funds to the carriers which had a crappy first year, there were only 12 cents on the dollar sitting in the cupboard?
Remember how, as a result, CMS had to basically issue "I.O.U's" to those carriers for the remaining 88% of the funds they were owed?
Remember how the main victims of this (along with some other factors, to be honest) were a full dozen of the ACA-created Co-Ops?
Remember how unlike established, private carriers, the ACA-created Co-Ops were fighting an uphill battle from the start, and since they had no outside funding or alternate revenue streams to draw from, they were sitting ducks when 88% of the RC funds didn't come through, not even surviving long enough to collect on those I.O.U.'s even if the money does eventually come through?
Well, here's the thing: Regardless of the damaged caused by this stunt, the 700,000 policy enrollees who were kicked to the curb to find other coverage as a result, the hundreds of employees of those Co-Ops who lost their jobs, and the unnecessary destruction of a dozen startup companies, at least Marco Rubio and his GOP colleagues got to have bragging rights over striking another blow against the dreaded Obamacare, right? After all, it's not like any private insurance carriers were put out of business, right? (Well, OK, aside from WINhealth of Wyoming, but hey, they were a non-profit company, so that doesn't count).
State forces tight controls on Moda, citing insurer's weakened financial condition
Oregon regulators on Wednesday forced tight new state controls on struggling Portland health insurer Moda Health Plans, citing the company's ongoing financial losses and depleted capital reserves.
The Oregon Division of Financial Regulation put the company into "supervision," meaning all business decisions will have to cleared by state officials. The company suffered a miserable fourth quarter of continuing losses and a shrinking base of capital, said Patrick Allen, director of the Oregon Department of Consumer and Business Services.
The state gave Moda until the close of business Friday to come up with a new business plan. Regulators are demanding that Moda either shrink its operations or raise significant new capital, said Laura Cali, head of the Oregon Insurance Division.
Now, before I go any further: I'm not blaming all of Moda's woes on Marco Rubio and the Risk Corridor debacle. From the rest of the article, it sure sounds like many of their problems were self-inflicted. Even so, it sure as hell didn't help matters to have the GOP pulling the rug out from under the RC program for no reason other than to score political points:
Moda is the third-largest health insurer in the state. In an effort to raise its profile, the company in 2013 paid millions of dollars to rename the Trail Blazers' home court the Moda Center.
It wasn't just its own miscalculations about the marketplace that have hurt Moda. The company's plight worsened this fall when promised financial assistance from the federal government failed to materialize.
It was clear before Thursday's order that the broken federal promises and high claims experience had pushed Moda to a financial precipice. The company lost more than $30 million through the first nine months of 2015. In the same period, Moda saw its capital reserve, a key indicator of financial strength, plummet from $120 million to $53 million. Moda's capital would have been much lower has it not borrowed $50 million from its parent company in November.
A year earlier, in November 2014, Moda quietly borrowed another $50 million from business ally Oregon Health and Sciences University. The deal raised eyebrows of politicians and the public, who wondered why a research institution partially supported by taxpayers would make a loan to a private insurance company.
(sigh) Anyway, it looks like roughly 67,000 people, most of whom presumably just renewed their Moda policies a few weeks ago, are gonna have to move elsewhere already:
As of Sept. 30, 2015, Moda enrolled a total of about 244,000 Oregonians in the commercial market, including 95,000 in the individual market. Since then, customers by the thousands have fled Moda, in part because it raised premiums. Individual market customers now number about 67,000.
The state will stage a special enrollment period for Moda customers who need to switch insurance plans. In the meantime, Moda policyholders can continue to access medical services and get their claims paid.
UPDATE: Hmmmmm...after discussing this in the comments, I'm thinking that my snarky headline/theme (the irony of a "pro-business" Republican deliberately strangling a private corporation) wasn't laid out very well. Instead of killing the post or completely re-working it, I'm just gonna direct people to the comments below from Esteban B and Intheknow).