Moda Center

Moda Health announced its 10-year stadium naming rights partnership with the Portland Trail Blazers in 2013.

Moda Health, one of Portland’s largest health insurers, has come back from the financial brink and regained its independence.

Thanks in part to the proceeds of Moda’s $250 million Supreme Court victory over the federal government, the company closed a deal Monday to buy back the equity stake it had sold to a California dental insurance company back when it was cash-poor to the point of insolvency.

In 2019, battered by losses and the federal government’s refusal to pay promised financial assistance, Moda desperately needed a financial savior. It struck a deal to sell nearly half the company to a San Francisco-based dental insurer called Delta Dental.

The landmark Affordable Care Act profoundly changed the health insurance industry after it became law in 2010. Facing that uncertainty, some insurance companies played it safe and declined to pursue new markets created by the law.

Moda delighted local proponents of health care reform in 2014 when it unveiled the lowest-cost plans in Oregon for the new individual health insurance market. Moda’s cheap plans won the company more than 100,000 new customers just in Oregon.

But Moda priced its insurance too low to cover the claims, which led to large losses. More bad news came when Moda reported it had not received $210 million in promised risk-corridor payments from the federal government. The “risk corridor” payments, which were authorized by the Affordable Care Act, were meant to help insurers who agreed to participate in the new markets created by the law, despite the risks.

Moda lost $227 million in 2018. State regulators took the first steps to put the company into state supervision.

Moda sued the government over the risk-corridor payments. Several other insurers had done the same. Moda claimed the companies were the victims of a “$12 billion bait-and-switch.”

In April 2020, the Supreme Court ruled 8-1 in favor of the insurance companies’ favor. Moda collected about $250 million.

Moda executives thanked Delta for stepping in when needed.

“We greatly appreciate the long-term partnership we have shared with our friends and colleagues at Delta Dental of California,” said Robert Gootee, president and CEO of Moda. “Their strategic investment of a few years ago helped us sustain and expand our diverse strategies at a critical time.

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