Moda Health
| Company type | Private |
|---|---|
| Industry | Health insurance |
| Founded | 1955 |
| Headquarters | Portland, Oregon , United States |
Area served | Oregon, Alaska, Texas |
| Products | Medical and dental coverage |
Number of employees | 1400 (2013) |
| Website | www |
Moda Health (previously known as ODS Health) is a health insurance provider based in Portland, Oregon. It delivers medical and dental coverage in Oregon, Alaska, and Texas, having withdrawn from the Washington market in 2016. Moda Health maintains an association with Delta Dental and is the namesake for notable Portland landmarks including the Moda Center, home venue of the Portland Trail Blazers, as well as the Moda Tower, a prominent office complex.
History
Originating as an initiative of the Oregon Dental Society (currently the Oregon Dental Association), Moda Health initially concentrated on dental insurance offerings. In 1995, it became subject to an Oregon Department of Justice inquiry concerning anti-trust allegations linked to a most favored nation clause in agreements with dental providers, which resulted in the clause’s elimination. The company revealed plans in 1996 to move into what would later be known as the ODS Tower, completing the relocation by July 1999 and subsequently selling its previous headquarters for $9.6 million.
The transition to the Moda Health brand was completed in May 2013, while the ODS name continued to be used for dental plans within Oregon. That same year, Moda entered into a sponsorship agreement with the NBA’s Portland Trail Blazers, leading to the renaming of their arena as the Moda Center. Additionally, Moda sponsors Seattle Reign of the National Women’s Soccer League. By 2013, Moda Health had grown to nearly 1,400 employees and reported annual revenues of $1.7 billion, demonstrating substantial expansion amid evolving healthcare regulations.
ACA's Risk Corridor Program
The risk corridors initiative under section 1342 of the PPACA functioned as a temporary financial safeguard inspired by Medicare Part D’s corridors. Its purpose was to incentivize insurers to join the ACA marketplace during its initial three years (2014–2016). While successful in attracting carriers, the program generated multi-billion-dollar losses that required subsidies from general government funds. It drew criticism from Congressional Republicans who viewed it as an insurer bailout. In 2014, then-Representative Jack Kingston added language to the Consolidated Appropriations Act that prohibited discretionary funds from being used for risk-corridor payments, limiting federal capacity to cover deficits. This funding restriction placed significant financial pressure on Moda Health and other insurers.
In January 2016, regulators in Oregon and Alaska halted Moda Health’s insurance sales due to insufficient capital caused by substantial losses. These constraints were lifted in February 2016 after Moda’s parent company committed to raising additional capital. This situation illustrates both the financial vulnerabilities insurers faced under ACA provisions and underscores the critical role of regulatory oversight and funding mechanisms in supporting new entrants within insurance markets.
Moda Health Plan, Inc. v. The United States
Moda Health obtained a $214 million judgment against the federal government following litigation over unpaid risk corridor reimbursements. On February 10, 2017, Judge Thomas C. Wheeler ruled that the government had failed to uphold its contractual obligations under the program, directing compliance accordingly.
Nevertheless, on June 14, 2018, the U.S. Court of Appeals for the Federal Circuit overturned this decision, nullifying the $214 million award. Ultimately, the Supreme Court sided with Moda Health, validating its claims in this pivotal legal dispute which significantly influenced its financial standing and corporate strategy.