Delta Dental Invests $152.4 Million in Moda Health to Expand into Medical Insurance Market

VCBeat (WeChat Official Account: vcbeat) learned from foreign media reports that on February 28, U.S. local time, insurance regulators in Oregon and California approved an agreement between Moda Health and Delta Dental, the largest dental insurance company in the United States. Under the agreement, Delta Dental will invest $152.4 million in Moda Health. This deal will enable both companies to expand their business scope.

Moda Health is a health insurance company headquartered in Oregon that currently provides medical, dental, pharmacy, and vision improvement plans to nearly 2 million people. In addition to Oregon, it serves residents of Washington and Alaska.

Delta Dental is a specialized dental insurance company with the largest network of dentists in the United States, providing personalized insurance services to over 78 million Americans. As a leading dental insurance provider in the U.S., the company’s core mission is to promote the oral health of its customers, partners, and consumers through its dental insurance offerings.

The collaboration between the two companies dates back to 1955, when ODS (now known as Moda, Inc.), the parent company of Moda Health, and Delta Dental partnered with dentists in California, Oregon, and Washington to develop the first independent prepaid dental plan. This initiative later evolved into the Delta Dental Plans Association.

Delta Dental Plans Association is a non-profit organization that provides high-quality, cost-effective dental insurance to groups and individuals by offering dental services across all 50 U.S. states, Puerto Rico, and other regions through the national network of Delta Dental companies.

Delta Dental’s financial reports indicate that the company’s dental business has continued to grow, with net profits reaching nearly $178 million in 2017 and approximately $80 million by the end of the second quarter of 2018.

The collaboration between the two companies was announced in late August last year. Earlier in 2018, the deal faced scrutiny due to Delta Dental’s financial issues and regulatory review by California authorities. However, the California Department of Managed Health Care, together with the Oregon Department of Consumer and Business Services, subsequently approved the agreement.

Regarding Delta Dental’s latest capital injection, Robert Gootee, President and CEO of Moda Health, described Delta Dental as a long-term partner committed to innovation. “By integrating resources and strategies, we can enhance our service capabilities in both existing and new markets. This strategic investment strengthens both companies’ ability to succeed in the evolving healthcare market, while continuing our respective traditions of community engagement.”

Delta Dental CEO Mike Castro added that this strategic partnership will enable the two organizations to share their complementary expertise.

Overall, this capital injection will provide Moda Health with a solid financial foundation, enabling it to expand its dental programs and allowing Delta Dental to enter the health insurance market.

(Compiled by Nie Guanghong)