Four Medicare Advantage plans blocked from enrolling new members due to inadequate spending

COVID-19 deferred patient care contributed to a lack of spending by UnitedHealthcare.

Four Medicare Advantage plans have been blocked from enrolling new members in 2022, by the centers for Medicare and Medicaid Services. This was a result of them not spending the minimum threshold on medical benefits. Medicare Advantage (MA) plans require a minimum of 85% of premium dollars to be spent on medical expenses, and failure to do for 3 consecutive years leads to a sanction.

One Anthem plan and three UnitedHealthcare (UHC) plans failed to meet the 85% mark for the third year consecutively, and this failure triggered the sanction.

The penalties apply to UHC’s MA plans in Arkansas, New Mexico as well as the Midwest covering Kansas, Nebraska, Iowa, and Missouri. A recent acquisition named the Anthem Plan is operated by MMM Healthcare and is based in Puerto Rico.

The UHC plan has coverage of 83,000 members, while the Anthem plan has a coverage of 1,200 members. The two cannot offer some selected plans to members until 2023, and only if they meet the 85% threshold known as the medical loss ratio (MLR). If they do not meet this threshold for five consecutive years, their contracts will be terminated by the government.

Representatives of UHC explained that it had missed this 85% benchmark in some markets as a result of patients deferring medical care during the COVID-19 pandemic. The usual pattern of medical care faced disruption as COVID-19 cases surged and patients stopped their routine visits. Overall, this offset the cost of pandemic-related health care.

Company officials stated that members covered under existing plans would be affected and UHC members have the option to continue plan coverage.

An increasing number of seniors are being enrolled in the Medicare Advantage plans in the preceding years. These plans involve contracts through private insurers with the federal government, providing individuals 65 years or older with publicly funded medical benefits. UHC is the largest provider of plans such as these.

Data in 2020 showed that consumers were opting for MA plans as a result of the plan’s supplementary benefits, with a special focus on COVID-19 and telehealth.

2021 plans by MA include an increase in these supplemental benefits, which includes coverage of over-the-counter drugs, transportation to physicians, meals. These benefits were not included in previous Medicare Parts.

The narrow networks of MA plans compared to traditional Medicare has always been a drawback.

Another UHC Advantage Plan was suspended in 2019 for similar reasons. After the organization brought its MLR in compliance with federal regulations again in 2020, the sanction was lifted.