Infusion of capital meant to offset deficit from a federal program that did not deliver.
BY JACOB PALMER | DIGITAL NEWS EDITOR
Moda Inc. is allowing Moda Health Plan to borrow $50 million.
The infusion of capital is meant to offset a deficit from a federal program that did not deliver for the insurer.
“We have a somewhat extensive corporate structure that allows us to allocate resources when it’s needed and where it’s needed,” said Moda Inc. CEO Robert Gootee. “We put additional capital in the health plan, and we have the assets to do that.”
The capital infusion ensures that the health plan exceeds regulatory requirements for risk-based capital and should put to rest any speculation about its financial condition, he said.
(SOURCE: Portland Business Journal)
Moda Health Plan was the beneficiary of a similar loan from OHSU just less than a year ago.
The terms of the new loan are identical to Moda Health’s loan from OHSU — 4 percent interest, 10-year term, $500,000 in interest payable quarterly.
Both are “surplus notes,” meaning Moda Health will make the quarterly interest payments only if it is has a sufficient surplus after paying all health claims from its customers.
The Oregon Insurance Division would have to approve the transaction. Jake Sunderland, division spokesman, said he was precluded by state rules from commenting.
(SOURCE: OregonLive.com)
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