Feds penalize UnitedHealthcare plans for underspending premiums on medical care for seniors

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fairly difficult
The sanctions block the Minnetonka-based insurer from selling certain Medicare Advantage plans in six states, which represent a small percentage of United's overall enrollment.
The federal government has imposed sanctions on three Medicare Advantage health plans run by UnitedHealthcare because the Minnetonka-based health insurer spent too small a share of premium revenue on medical benefits for seniors.

As a result, the federal Centers for Medicare and Medicaid Services (CMS) announced earlier this month that the health plans would not be allowed to enroll new subscribers for next year. Medicare Advantage plans are required to spend a minimum of 85% of premium dollars on medical expenses and can be sanctioned if they fail to do so for three consecutive years. The UnitedHealthcare plans in question failed to hit that mark from 2018 through 2020.

In a statement to the Star Tribune, UnitedHealthcare said the business units fell short of requirements because patients used less care than expected during the COVID-19 pandemic last year by avoiding doctor visits.

The three UnitedHealthcare plans penalized by the federal government provide coverage for about 86,000 people, which is just a fraction of the company's total Medicare Advantage enrollment of nearly 7.5 million people.

The plans facing enrollment sanctions primarily operate in Arkansas, New Mexico and four states in the Midwest. None of the plans does a significant amount of business…
Christopher Snowbeck
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