Healthcare market on last life

And then there was one.

The Alaska Division of Insurance announced Thursday that Portland-based Moda Health will no longer be allowed to sell individual health insurance plans through Obamacare. The action, three days before the federally imposed deadline to obtain health insurance for the coming year, leaves Premera Blue Cross Blue Shield as the only option in the federal marketplace for most Alaskans without employer-provided coverage.

Lori Wing-Heier, director of the Alaska Division of Insurance, said during a Friday press conference that Alaskans who already have Moda health insurance should not immediately worry. Their health insurance policies will be honored and protected until they expire.

“This is not a true panic,” she said. “It is not necessary for you to seek new insurance at this point.”

Moda Health differs from the Moda dental insurance offered to state employees.

“That should not be impacted at all,” Wing-Heier said.

According to a letter sent to lawmakers by Chris Hladick, commissioner of the Alaska Department of Commerce, about 9,800 Alaskans have individual insurance plans from Moda.

The state’s primary concern, Wing-Heier said, is for people whose policies are expiring soon or haven’t yet signed up for health insurance through the state’s federal marketplace. The federal government has set a deadline of Jan. 31 to sign up for health insurance. Anyone who doesn’t have insurance after that date — whether through his or her employer or the federal marketplace at healthcare.gov — might suffer a tax penalty.

Adding to the trouble, Moda policies were still available on the federal healthcare.gov website and visible by the Empire on Friday. At Friday’s press conference, Wing-Heier said any plans issued after Thursday would not be valid. Alaskans who need an individual health insurance policy must go through Premera.

Alaska’s Thursday action was driven by a decision by the state of Oregon to place Moda under an “Order of Immediate Supervision,” an action taken because “Moda’s inadequate capital and excessive operating losses put it in a hazardous financial situation,” Wing-Heier wrote Thursday.

On Friday, Wing-Heier summarized Moda’s financial state: “In essence, they were at one point in the aggregate … paying out $1.11 for every dollar they were taking in.”

The same was true for Premera, she said, but that other company has a “deeper pocketbook. In the longer term, they are able to absorb it.”

Late last year, in part because of those losses, the Division of Insurance approved average rate increases of 38.7 percent for Premera and 39.6 percent for Moda. At the time, both companies cited the high cost of providing medical services in Alaska as the reason for the increases.

“Right now, Premera is financially solvent,” Wing-Heier said.

Speaking from Washington, D.C., U.S. Sen. Dan Sullivan, R-Alaska, said in a prepared statement that he’s seeking help from the federal Department of Health and Human Services.

He added that “Moda’s problems in Alaska are further evidence that Obamacare is colossal failure for Alaskans.”

In the long term, the state will attempt to bring more options to the insurance marketplace, Wing-Heier said, and it will take steps to ensure Premera does not abuse its potential monopoly power over the marketplace.

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