Exclusive: Jason Gootee on Moda’s departure from Alaska’s individual market

State of Reform’s DJ Wilson sits down with Jason Gootee, Director of Alaska Sales and Service at Moda Health to discuss Moda’s departure from the individual market.

DJ Wilson:  Moda has announced that they will be leaving the Alaska Individual market, including the exchange marketplace, in 2017.  When did you start notifying folks this was going to happen?

Jason Gootee:  On Sunday, we talked with Governor Walker and with US Senator Murkowski, in addition to the Division of Insurance this morning. There will also be a communication going out to all of our broker partners throughout the state. And of course, when appropriate, to all members.

DJ: Clarify what this action means for Alaskans.  Which lines of business are you leaving and which lines of business are you remaining in?

JG:  The only thing that is going away for us is Individual medical.  That will happen January 1, 2017.  So, if folks purchased a Moda health plan on the exchange in the last open enrollment period, we will continue to cover them throughout 2016.  As the year winds down, we will work as hard as we can for our members to make the transition to a new plan in 2017 as smooth as possible.

That said, we continue to be very committed to the Alaska market.  This decision today helps us even better support our group medical and our dental business throughout the state. We’re not going anywhere.  And, I want to make sure that’s abundantly clear.  We did everything we could to try to make this work, but you know, at the end of the day you can’t continue to pass these sorts of premium increases on to consumers year after year.

DJ:  With these 14,000 members leaving Moda, what number of beneficiaries will Moda have in its other remaining lines of business in Alaska?

JG:  Our medical group enrollment totals about 6,500.  Moda also has roughly 83,500 group dental enrollees and about 4,700 Individual dental covered enrollees.  I want to reiterate that these other lines of business are not affected by the Individual medical decision.

DJ:  Tell me about the work Moda has been doing just in the most recent weeks to avoid this from happening.  What has Moda been doing with the administration to try to figure out a way to avoid this?

JG:  It started with us having lots of conversations with providers and hospitals around the state about ways to manage this specific population. These were good conversations, but ultimately we weren’t able to find a way to make the market viable.  We do have some great partners around the state.  That doesn’t change the fact that this is an expensive place to do business.

We’ve been in regular communication with the Division of Insurance.  We’ve also worked closely with the federal delegation to try to find some sort of policy vehicle that could have mitigated our losses in this market . . . but it just wasn’t possible.

DJ:  I’ve seen reported in other sources that the total loss for Moda in 2015 across all lines of business was $49.5m.

JG:  That’s correct.  Keep in mind that, from a risk standpoint, Alaska’s Individual market performs much more like a Medicaid risk pool than a commercial risk pool.

DJ:  Let’s discuss the suspension and consent agreement with the State of Alaska back in January.  A lot of stakeholders told me they viewed the suspension by the Division of Insurance and consent agreement which followed as adding more instability, that it hurt the situation in the Alaska insurance market far more than it helped.  Was that a constructive regulatory process, or was that as bad as it looked in some people’s eyes?

JG:  I would just say I never hope to repeat that experience again in my career.  We’re now simply moving forward, looking long-term to what best supports the Alaska market.

Unfortunately, this decision today is necessary for us to be able to stay in the market in Alaska as a viable option in the group market.

DJ:  The Legislature has a bill on state reinsurance now, SB 206.  If the Legislature had enacted legislation like this last year, do you think that could have made a difference in keeping Moda around this year?

JG:  It was one factor. But there were other serious issues. The Individual market in Alaska needs significant reform. In order for the Individual market to be even sustainable, let alone competitive in the future, policymakers need to find some solutions to stabilize this market.

DJ:  You don’t speak for Premera obviously, but if I’m Premera I’m worried.  They’ve expressed concerns themselves about this market.  With Moda’s departure, Premera will have to carry that Individual market entirely on its own, something I think they will have to think carefully about.

JG: Well, a single carrier is not entirely unprecedented.  Wyoming only has one carrier on the exchange, for instance. Premera is a very solid company.  I have no doubt they will do right by Alaskans inasmuch as they can.  I think for this to work in the long run, stakeholders in Alaska need to come together and realize that the exchange market more closely resembles a Medicaid population rather than a standard commercial population.  You know, whether as a health plan or as a provider system, you just can’t keep passing through these rate increases on to consumers, and kicking the can down the road on reform solutions.  At some point in time, you have to stop just hoping that things will get better and start finding solutions for the long-term fixing the thing.  And, I think Alaska’s just not at that point in regards to the individual market.

DJ:  How frustrating is this for you personally?

JG:  It’s very frustrating.   My first sales job at Moda back in 2006 was launching our Alaska Individual product, so I’ve invested a lot of my own time into the product, as well as have many others in our company.  We have been working to make this sustainable and successful for a long time. If reforms are made, we would certainly entertain returning to this market in the future.