Five Takeaways from the Moda Health Debacle

The story of Moda Health's financial implosion has rocked the city and state with all the force of a sex scandal, minus the salaciousness, of course. Insurance industry jargon — risk adjustment corridors, individual insurance markets, special enrollment periods —  is suddenly the talk of the town.

Moda's sudden exit/exile from Oregon's insurance market also possesses the shock and awe character of Uber's Portland invasion — something we all knew was going to happen but were shocked and awed just the same.

In any case, like all scandals, the troubles facing the insurance giant have become a prism through which pundits, analysts and the public interpret events. To wit, here are few themes emerging from the Moda narrative:

Hubris

Recall the outrage sparked by Moda’s decision to spend $40 million to rename the Rose Quarter. For many, Moda’s financial woes smack of comeuppance.

Big government

Moda is far from the only carrier to lose money on the individual insurance market. Many blame the Affordable Care Act, which pushed thousands of people with serious and expensive medical conditions into the insurance pool. Carriers have hemorrhaged money as a result, and more than a few have been forced to shutter operations, from Oregon Health Republic to Assurant Health, which until a few months ago was one of the largest health insurers in the country.

The state’s takeover of Moda operations also marks a rare public muscling in on a private organization — even in a highly regulated industry like health care. In 2016, we’re used to private equity firms taking over struggling companies: government entities, not so much.

Disruption

One can forgive Zoom+ CEO Dave Sanders if he’s watching Moda’s travails with more than a little glee. The self-described change  maker likes to speak in epic terms about the pending collapse of legacy health care models and the ascendancy of high-tech retail brands like, well, Zoom+.   

Opaque operations

OHSU’s decision to first loan and then take a financial stake in Moda's operations befuddled many. The health care industry is in shakeup and consolidation mode, to be sure. How the university stands to gain from alliance with the troubled insurer is a question that continues to confound.

Cover Oregon, we hardly knew ye.

Time will tell if the Moda story trumps Cover Oregon as one of Oregon's grand health care debacles. Stay tuned.

Linda Baker

Linda Baker is the former editor of Oregon Business

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