CMS (Centers for Medicare and Medicaid Services) has certain rules and regulations in place for beneficiary protection. Sometimes, CMS has to issue sanctions against health plans. While sanctions don’t necessarily indicate that a plan is bad, it can indicate that they broke a rule.
One of the major CMS “rules” for health plans is that they must have a “medical loss ratio” of at least 85%. This means that at least 85% of the plan’s revenue MUST go towards medical claims instead of overhead costs (at least 85 cents of every premium dollar should go into the beneficiary’s medical costs).
In October 2019, CMS sanctioned one UnitedHealthcare Medicare Advantage plan (Medicare contract H5322 through Care Improvement Plus) for breaking this rule. Those currently enrolled in the plan will NOT face a coverage interruption, but no one will be able to enroll in this plan as a new member in 2020.
Who Does This Affect?
The plan in question is a limited Medicare Advantage plan mainly for those who are “dual eligible” for Medicare and Medicaid. This news will affect less than one percent of UnitedHealthcare’s Medicare Advantage enrollees and only touches:
- New Hampshire
- New Jersey
Not all UHC members in those nine states will be affected. UHC has a number of other Medicare Advantage plans available in those states.
Additionally, this does not affect current plan members. It only prevents new members from enrolling during the next year.
Does this Mean UHC Plans are Bad?
No, not necessarily. According to CMS, the sanctioned contract has been slightly below that 85 percent threshold since 2017. It actually reached as high as 84.1% in 2018, so it was steadily improving each year and was very close to the required 85%.
UnitedHealthcare also said, “While we won’t be enrolling new members in [this contract] for 2020, existing members will continue to receive the same level of care and support, including an increase in their coverage and benefits.” Plus, even if this one contract is not an option in those listed areas, there may be other UHC options available.
Also, it is definitely possible for UHC to improve their medical loss ratio and for this plan to open back up for new enrollees in 2021.
How to Explain This to Clients
Chances are that you won’t even have to explain this to clients, since the plan won’t even be an option for them to enroll in it. Instead, discuss other UHC Medicare Advantage plan options with them (as long as it makes sense in context).
If a client has seen this news and asks about it, talk to them briefly about what plan sanctions are, ensure them that it does not affect their enrollment, and then introduce them to plans that make sense.
If you’re contracted with a great FMO like Senior Market Advisors, you might have a long series of other plans in your back pocket, anyway.
To easily eContract with multiple carriers at once through Senior Market Advisors, visit agentcontract.com.