Photo courtesy of United Health Group
The Centers for Medicare and Medicaid Services has blocked four Medicare Advantage plans from enrolling new members in 2022 because they didn’t spend the minimum threshold on medical benefits, with three UnitedHealthcare plans and one Anthem plan failing to hit the required 85% mark three years in a row.
Medicare Advantage plans are required to spend a minimum of 85% of premium dollars on medical expenses; failure to do so for three consecutive years triggers the sanctions.
WHAT’S THE IMPACT
For UHC, the penalties apply to its MA plans in Arkansas, New Mexico and the Midwest, encompassing Missouri, Kansas, Nebraska and Iowa. The Anthem plan, operated by recent acquisition MMM Healthcare, is based in Puerto Rico.
UnitedHealthcare plans cover about 83,000 members, and the Anthem plan covers about 1,200 members. They cannot offer select plans to members until 2023, assuming they hit the 85% threshold next year — what’s called the medical loss ratio (MLR). If they fail to hit the threshold for five years in a row, the government will terminate the contracts.
UHC representatives told Bloomberg that it missed the 85% benchmark in certain markets in part because of patients deferring medical care due to the COVID-19 pandemic. The pandemic disrupted the usual patterns of medical care, and as coronavirus cases climbed, patients put the brakes on more routine visits, which in general more than offset the costs of COVID-19-related care.
Existing plan members won’t be affected, and UHC members will have the option of continuing their coverage, with company officials telling the Star Tribune that the coverage will feature increased benefits.
THE LARGER TREND
More and more seniors have been enrolling in Medicare Advantage plans in recent years. In such plans, private insurers contract with the federal government to provide publicly funded medical benefits to those 65 years old and older. UnitedHealthcare is the nation’s largest provider of such plans.
2020 data showed that more consumers were choosing MA plans due to the plans’ supplemental benefits, specifically COVID-19 and telehealth supplemental benefits.
MA plans continued to increase their supplemental benefit offerings in 2021, including meals and transportation to physician visits and coverage of over-the-counter drugs and wellness, benefits not covered under Medicare Part A, Part B or Part D,
The drawback has always been the narrower networks of MA plans compared to traditional Medicare.
In 2019, another UnitedHealthcare Medicare Advantage Plan was suspended for similar reasons, but that sanction was lifted in 2020 after the organization was able to bring its medical loss ratio back into compliance with federal regulations.
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