BECKY BOHRER

Moda allowed to resume business under consent order

JUNEAU (AP) — Insurance regulators in Alaska and Oregon announced Monday that a company that had been suspended from offering health insurance policies in the states over concerns with its financial condition will be allowed to resume that business. The Alaska Division of Insurance and the Oregon Department of Consumer and Business Services said they have reached an agreement with Moda Health Plan Inc. aimed at stabilizing its financial position. The agencies said the agreement will allow Moda to resume selling and renewing policies to individual and group customers in Alaska and Oregon. Both states late last month suspended Moda from accepting new or renewal policies, citing concerns with the company's financial situation. In a release, Patrick Allen, director of the Oregon department, said initially the agency thought it might be prudent for Moda to leave the individual market. The steps outlined in the consent order will instead allow consumers to continue their health coverage with no changes, he said. The agreement reached "is the best option for consumers because it will not disrupt their current policies," he said. The department said it retains the ability to respond if Moda doesn't comply with all the requirements in the order. "We worked very hard to keep them" in the market, said Alaska Division of Insurance Director Lori Wing-Heier. Moda is one of two companies that have been offering individual health insurance policies for Alaskans on the federally facilitated online marketplace. Wing-Heier said she has asked the federal government to put Moda back on the exchange and has also requested a two-week special enrollment period. Wing-Heier said people may have selected Moda but had not finalized their enrollment. The initial action against Moda took place near the end of the latest open enrollment period on the marketplace. Alaska officials in a release said both states came to an agreement with Moda over the weekend that outlines a plan for the company to stabilize its financial position and continue to offer coverage. The agreement calls for Moda to raise at least $179 million, which is expected to allow the company to continue providing services through 2016. Of that, $15 million would be put aside for the protection of Alaska policyholders, Wing-Heier said. Among other things, Moda also must obtain approval from Oregon regulators before awarding executive salary increases or bonuses. Wing-Heier said insurers not only in Alaska but across the country have had a tough time. Moda has made a commitment to try to stay in the market, she said. "They could've taken a much easier route and said, 'We're out of health insurance,' or 'We're out of Alaska, period,' and they did not take that," she said. Since Jan. 27, Moda has worked through the process of assuring the Oregon Department of Consumer and Business Services of its ability to continue to serve its individual customers in Oregon and Alaska, said Robert Gootee, CEO of Moda Inc., the parent company of Moda Health Plan. "They have done an excellent job of quickly analyzing a difficult and rapidly changing set of circumstances," he said in a statement. He said he's pleased an agreement has been reached on a path forward. About 10,000 Alaskans are enrolled by Moda on the individual market and about 7,500 on the small group market, Wing-Heier has said. About 244,000 Oregon residents were enrolled in Moda plans in the individual, small group and large group markets as of Sept. 30, according to the Oregon Department of Consumer and Business Services.  

Alaska, Oregon suspend Moda Health as finances worsen

Alaska insurance regulators on Jan. 28 suspended Moda Health Plan from accepting new or renewal policies in the state, citing concerns with the Oregon-based company’s financial situation. The Alaska Division of Insurance acted after officials in Oregon placed the company under supervision because of its financial condition. Moda is one of two companies offering individual insurance policies for Alaskans on the federally facilitated health insurance marketplace. The other is Premera Blue Cross Blue Shield. The division of insurance last year approved average rate increases of nearly 40 percent for both companies. The Oregon Department of Consumer and Business Services said its supervision order calls for the company to obtain sufficient capital and to present a business plan that demonstrates Moda can operate in sound financial manner into the future. The department said its actions were prompted by Moda’s “excessive operating losses and inadequate capital and surplus.” Under the order, Moda cannot issue new policies or renew current policies in the individual market or add new groups in Oregon, the department said in a release. The department said it will begin working with Moda to transfer its individual market plans to another carrier. “Our primary goal is to ensure consumers are protected,” Patrick Allen, the department’s director, said in a release. “We will continue to work closely with the company to find a sustainable path going forward while minimizing risk to consumers.” Lisa Morawski, a spokeswoman for the department, said a lot of what happens next will depend on the plan that Moda presents and whether the department finds it acceptable. About 10,000 Alaskans are enrolled by Moda on the individual market and about 7,500 on the small group market, Alaska Division of Insurance Director Lori Wing-Heier said in an email response to questions. There are other options in the group market, she said. “The division will do everything within its authority to see that Moda’s policyholders will continue to access medical services until they can be transitioned to another insurer,” Wing-Heier said in a release. About 244,000 Oregon residents were enrolled in Moda plans in the individual, small group and large group markets as of Sept. 30, according to the Oregon Department of Consumer and Business Services. U.S. Rep. Don Young, R-Alaska, said Thursday’s announcement “is meant to protect Alaskans from the failings of an individual insurance provider, but it also begs the question of the overall instability of our current health care system.” The system went through a shake-up last year, with other companies announcing their departure from the individual market. “The Alaska Division of Insurance has made assurances that Moda policy holders will continue to be able to access health care services, their claims will be paid and consumers will be protected,” Young said in a release. “Alaskans should know that the state and the congressional delegation will be working with them as this process moves forward.”

Alaska, Oregon suspend activity by health insurer Moda

JUNEAU (AP) — Alaska insurance regulators have suspended Moda Health Plan from accepting new or renewal policies in the state, citing concerns with the Oregon-based company's financial situation. Moda is one of two companies offering individual insurance policies for Alaskans on the federally facilitated health insurance marketplace. The other is Premera Blue Cross Blue Shield. The Alaska Division of Insurance acted Thursday after officials in Oregon placed the company under supervision due to its financial condition. The supervision order issued by Oregon's Department of Consumer and Business Services calls for the company to submit a business plan that it deems acceptable by Friday. The department says Moda cannot issue new policies or renew current policies in the individual market or add new groups. A message was left for a Moda spokesman. Below is the press release from the Alaska Division of Insurance: “The Division of Insurance has been closely reviewing Moda’s financial status and monitoring related consumer complaints,” said Lori Wing-Heier, Director of the Division of Insurance. “We took this action to protect Alaskans—Moda’s inadequate capital and excessive operating losses put it in a hazardous financial situation. “Today’s action will facilitate the division’s participation in the company’s financial decisions to ensure that policyholders are protected. The division will do everything within its authority to see that Moda’s policyholders will continue to access medical services until they can be transitioned to another insurer.” Information for policyholders will be made available on the Division of Insurance’s webpage as it emerges. https://www.commerce.alaska.gov/web/ins/Home.aspx The Determination of Impairment order is effective today; however, Moda’s insurance policies may still appear on healthcare.gov through the end of the open enrollment period on January 31. The Division of Insurance advises consumers still shopping for plans to choose an insurer other than Moda. Alaskans already enrolled with Moda will need to switch plans; there will be a special enrollment period to allow for the transition. The Division of Insurance is working closely with the federal Centers for Medicare and Medicaid Services and Center for Consumer Information and Insurance Oversight during this time. Consumers with questions should contact the Division of Insurance consumer services specialists at (907) 269- 7900. FAQs will be posted to the division webpage https://www.commerce.alaska.gov/web/ins/Home.aspx by close of business, and updated as more information becomes available.

Walker’s Permanent Fund plan gets first Senate hearing

JUNEAU (AP) — The chairman of the Senate State Affairs Committee said Jan. 26 that he wants to vet several ideas surrounding the use of Alaska Permanent Fund earnings. Sen. Bill Stoltze, R-Chugiak, said that could include a constitutional amendment to allow voters to weigh in on the matter. So far, such a measure has not been introduced. Stoltze said he wants to be able to have different bills and ideas ready to send to the Senate Finance Committee for additional review. Stoltze’s committee held its first hearing Jan. 26 on Gov. Bill Walker’s plan to use the Permanent Fund as an endowment of sorts, fed by oil tax revenue and a portion of royalties. Earnings from the Fund, bolstered by a transfer from savings, would help pay for state government, moving the state away from budgeting around volatile oil revenue. The plan would change how the annual dividends most Alaskans receive are calculated, basing them on a portion of royalties rather than on the performance of the Fund. This year would be a transitional year for the dividend, and Walker’s budget proposal for the upcoming fiscal year calls for oil-tax revenue and the bulk of royalties to go into the earnings reserve. The use of Permanent Fund earnings is a centerpiece of Walker’s budget plan. But questions have been raised about whether the Fund’s earnings reserve account must be swept into the constitutional budget reserve to repay money that’s been taken out of it. The Department of Law, in a memo to the House Finance co-chairs this week, said it wouldn’t. In recent years, lawmakers have approved taking money from the constitutional budget reserve to help with the state’s pension shortfall and to help balance the budget amid deficits fueled by low oil prices. Under the constitution, if money is taken from the budget reserve, money in the general Fund available to spend at the end of each fiscal year is to be deposited into the budget reserve until it’s repaid. A three-quarter vote of each the House and Senate generally is needed to access the budget reserve. State law defines the earnings reserve as a separate account in the Permanent Fund. But the Legislative Finance Division has argued that putting money other than Permanent Fund earnings into the earnings reserve would change the nature of that account. The Department of Law’s memo, signed by Senior Assistant Attorney General William Milks on behalf of the attorney general, acknowledges that the earnings reserve would no longer be comprised solely of Permanent Fund income and that the account would be used for state government costs rather than restricted to paying dividends. But, the memo states, that doesn’t change the earnings reserve into a Fund within the general Fund. The account has always been available to pay for government even if it hasn’t been used that way, the memo states. Legislative Finance Division Director David Teal said he wanted to have the issue at least discussed. If adopted as proposed by the administration, he said he’s concerned about a potential court challenge. A memo from Legislative Legal Services, requested by Sen. Bill Wielechowski, D-Anchorage, states that the appropriation of non- Permanent Fund income to the earnings reserve, as proposed “poses a novel issue not yet resolved by the Alaska Supreme Court.” Some legislators have indicated they’re interested in looking at some use of Permanent Fund earnings to address the deficit. At least two bills with different approaches than Walker has proposed are pending. Sen. Bert Stedman, R-Sitka, said he thinks lawmakers should consider not inflation proofing the Permanent Fund and using that $900 million. He also wants to change the state’s oil tax credit structure. Laura Achee, a spokeswoman for the Alaska Permanent Fund Corp., said by email that most of the Fund’s assets rise and fall with inflation and are “self-inflation proofing.” The Legislature traditionally also has used Fund income toward inflation-proofing the Fund’s principal.

Alaska Supreme Court upholds local school contribution

The Alaska Supreme Court on Friday upheld as constitutional a state requirement that local school districts help pay for education, reversing a lower court decision. The ruling came in a case filed against the state by the Ketchikan Gateway Borough. In 2014, a state court judge ruled in the borough's favor, finding that a required local contribution for schools is a dedicated fund that violates a constitutional provision that no state tax or license will be earmarked for any special purpose. But the high court, in a decision released Friday, said the required local contribution is not a state tax or license within the meaning of the dedicated funds clause. The opinion, written by Justice Joel Bolger, states that the minutes of the constitutional convention and historical context of those proceedings suggest delegates intended for local communities and the state to share responsibility for local schools. Chief Justice Craig Stowers and Justice Daniel Winfree concurred in the decision but expressed concerns. Winfree wrote that he does not rule out an ultimate conclusion that the required local contribution is unconstitutional, as a dedicated tax or otherwise, and does not join the court's analysis or decision on that point. "In my view the question cannot be answered definitively without a full interpretation and understanding of the Alaska Constitution's public schools clause, which, apparently for strategic reasons, the parties did not confront," he wrote. Winfree wrote that he agreed with the court's analysis in affirming the lower court's secondary decision that the required contribution does not violate the appropriations clause or the governor's veto clause of the Alaska Constitution.

About 7,700 Alaskans have enrolled in expanded Medicaid

A state health department official says that since the state expanded Medicaid to cover more lower-income Alaskans on Sept. 1, about 7,700 people have enrolled. Chris Ashenbrenner is the Medicaid program coordinator for the state health department. The department had estimated that nearly 20,100 newly eligible Alaskans would enroll during the first year of expansion, and Ashenbrenner believes that enrollment is on track for that. She says enrollment in the first half of the year may be more robust because of pent-up demand for health care. She says open enrollment periods through the federally facilitated health insurance marketplace also brings in a lot of new Medicaid applications because the system can make a Medicaid-eligibility determination or refer cases to the state for a determination.  

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