Moda relying on ‘significantly underfunded’ program

Moda Health is banking on $82.5 million that it may never receive.

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Moda Health is banking on $82.5 million that it may never receive.

The health group is relying on a “significantly underfunded” ACA program for about 70 percent of its total capital, the Portland Business Journal reports.

The “risk corridor” program, which was created to spread risk among insurers, instead “may make the U.S. insurance market less stable, not more,” a Standard & Poor’s Ratings Services analysis found. Moda is in a particularly vulnerable position. The largest health carrier in Oregon’s individual market, Moda expects to receive the fourth-highest dollar amount from the risk corridor fund among U.S. health insurers, according to S&P, which compiled a list of the 15 insurers with the highest risk corridor receivables on their 2014 balance sheets. Moda is the only Oregon-based company on the list.

The receivables were included in the 2014 financials of insurers nationwide, even though the funds won’t be delivered until later this year. The program, in the second of its three-year lifespan, was created as part of the Affordable Care Act to protect carriers against the risk of mispricing. If claims costs are higher than expected and some insurers lose money, they are reimbursed under the program by insurers who were more profitable.

The report read: “Without adequate payments coming into the risk corridors, it is unclear to us how (the Centers for Medicare and Medicaid Services) can fund the program. … The higher the receivables as a percent of total reported capital, the greater potential impact of non-receipt.”