AM Best has downgraded the Long-Term Issuer Credit Rating (Long-Term ICR) to “bb” (Fair) from “bb+” (Fair) and affirmed the Financial Strength Rating (FSR) of B (Fair) of Moda Health Plan, Inc. (Moda Health). Concurrently, AM Best has downgraded the FSR to B (Fair) from B+ (Good) and the Long-Term ICR to “bb+” (Fair) from “bbb-” (Good) of Oregon Dental Service (ODS). In addition, AM Best has placed both of these ratings under review with negative implications. Both companies are domiciled in Portland, OR.

Furthermore, AM Best has withdrawn these ratings as the companies have requested to no longer participate in AM Best’s interactive rating process. These ratings serve as AM Best’s final rating updates for these companies.

The ratings reflect Moda Health’s balance sheet strength, which AM Best assesses as weak, as well as its marginal operating performance, limited business profile and appropriate enterprise risk management (ERM).

Prior to the withdrawals, the under review with negative implications and downgrading of the Long-Term ICR for Moda Health reflected a lack of improvement in its risk-adjusted capitalization, as measured by Best's Capital Adequacy Ratio (BCAR). In 2023, the company’s capital declined driven by a material net loss and repayment of surplus notes partially offset by an unrealized gain and a capital contribution from its parent, ODS. AM Best remains concerned about the level of risk-adjusted capitalization.

The ratings reflect ODS’ balance sheet strength, which AM Best assesses as adequate, as well as its adequate operating performance, limited business profile and appropriate ERM.

The under review with negative implications and rating downgrades of ODS’ ratings mainly reflect decreased risk-adjusted capitalization, as measured by BCAR. Additionally, financial leverage for ODS remains moderately high, which AM Best feels limits financial flexibility.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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