UnitedHealthCare disadvantages Medicare Advantage

By the editorial board
St. Louis Post-Dispatch, June 24, 2014

One of the major flaws in the Patient Protection and Affordable Care Act is also one of the reasons it was able to pass: It accommodated, and in some ways enhanced, the role of for-profit insurance companies.

Last week, the Post-Dispatch’s Tara Kulash reported that thousands of Missouri seniors and hundreds of its doctors had learned that they’d be paying a high price for this accommodation. The patients are among the 95,000 Missourians who purchased a Medicare Advantage plan from UnitedHealthCare (2013 profits: $10 billion). Many of the doctors appear to be practicing in suburban or rural areas in such fields as dermatology, ophthalmology, gastroenterology and orthopedic surgery.

The company, the nation’s largest seller of Medicare Advantage plans, is reducing the number of doctors in its approved-provider network. It appears to be trying to steer patients into large hospital-affiliated physician groups, where there are economies of scale. By Sept. 1, eight months into the coverage year, patients will have to find new doctors.

Had there been the political will to enact a single-payer national healthcare system, this sort of problem could have been avoided.

Certain conflicts were inevitable with the ACA, one of them being the insurance companies’ desire to make as much money as possible and the government’s desire to cover as many people as possible at the lowest possible cost.

One of the ways the ACA does this is by gradually reducing its subsidies to Medicare Advantage Plans, which are purchased by about 30 percent of Medicare-eligible seniors. These 15.7 million Medicare Advantage policyholders get broader benefits and lower co-pays than the 20 percent paid by traditional Medicare patients. Indeed, those 20 percent copays help pay for the lower costs of Medicare Advantage.

But unlike basic Medicare, which is a fee-for-service plan that allows patients to see any participating doctor they want, Medicare Advantage plans are like HMOs: They specify the doctors, hospitals and other providers that patients can visit.

To offset declining federal reimbursements — or to boost profits, or both — some of the companies that sell Medicaid Advantage plans have decided to shrink the number of doctors in their provider networks.

UnitedHealthCare began cutting its provider network in Missouri and other states this spring. The second round of cuts announced last week will affect between 5 and 7 percent of the 10,000 physicians currently in UnitedHealthCare’s Missouri network.

UnitedHealthCare hasn’t offered a reason for its decisions. It owes a full explanation to doctors, patients and the public that is paying the Medicare bills.

The natural speculation is that UnitedHealthCare is hiding behind the ACA to boost its profits. In a letter to UnitedHealthCare CEO Stephen Hemsley (2010-2013 total compensation: $212 million) last spring, Thomas L. Holloway, executive vice president of the Missouri Medical Association, suggested the company is “cherry-picking … targeting the sickest, most costly patients and summarily terminating the physicians.”

The Centers for Medicare Services, which administers the program, should review such decisions. The ACA won’t work if companies can go back to dumping their sickest patients. The AARP, which teams with UnitedHealthCare on a popular Medicare Advantage policy, should reconsider that partnership. And during this fall’s enrollment period, patients might want to shop elsewhere.