Connecticut State Medical Society

Nov 20, 2015

UnitedHealth Group has agreed to spend $11.5 million to settle lawsuits brought by state medical societies and individual doctors over how the insurer pays and codes claims, the Connecticut State Medical Society announced Monday. Lawsuits were initially brought more than a decade ago by medical... UnitedHealth Group has agreed to spend $11.5 million to settle lawsuits brought by state medical societies and individual doctors over how the insurer pays and codes claims, the Connecticut State Medical Society announced Monday. Lawsuits were initially brought more than a decade ago by medical... (MATTHEW STURDEVANT) "Collectively, these actions should temper any growth [in exchange customers] in 2016," he told investors on a conference call Thursday morning. Hemsley said one problem for insurers is that some customers only maintain a policy for as long as they have a planned medical expense — and then quit. He also said that people who sign up for the exchange after a life event — such as losing a job or getting divorced — are spending 20 percent more on health care than those who sign up during open enrollment. Those customers were 30 percent of the UnitedHealth exchange customer base. Even with the penalties for not buying health insurance, it's far cheaper to pay the penalty than to pay for a plan every month if you make too much to qualify for subsidies. "There are a bunch of people eligible for these plans that don't value having insurance enough to pay what they'd have to pay," Hempstead said. "I would be surprised if only United is having these experiences," she said. Investors seemed to agree, driving down UnitedHealth Group's stock, Aetna's stock, Humana's stock and Anthem's stock in equal measure. All four companies' stock fell between 6 and 7 percent, and Cigna's stock fell 5 percent. She said for health care reform experts, Thursday's announcement was stunning. "Well, if United can't figure out how to make money in this market, it's hard to think any other carrier is going to be different," she said. "At the end of the day, you have to have people willing to sell insurance. " But other players in health care reform downplayed the importance of UnitedHealth's profitability problem. Cynthia Cox, associate director of health reform and private insurance for the Kaiser Family Foundation, suggested UnitedHealth Group may stay in the market if the mix of healthy and sick customers improves. And even if they do leave, she said, there are plenty of other insurers to pick up their market share. "There's still a lot of demand [from customers] in this market," she said. "It's not as strong as had been originally expected. " Ben Wakana, a spokesman for the U.S. Department of Health and Human Services, told the Los Angeles Times that exchange enrollment continues to grow. "Today's statement by one issuer is not indicative of the marketplace's strength and viability. " Cox said it's too soon to judge how the exchanges will play out, especially since those who aren't buying plans won't learn until they file taxes in 2017 that the penalties have grown substantially. "It's going to take a few years for this to even out," she said. But Hempstead said this isn't the first sign of retrenchment from a major insurer. Cigna withdrew from Florida this year, she said. She said there are ways to nudge more healthy people into buying health insurance. One could be by making the subsidies more generous — an unlikely scenario under the Republican-controlled Congress. Hempstead said another way to draw more middle-class buyers who don't expect to use the plans much would be to change the parameters of what has to be covered so that policies are less comprehensive. "This is kind of a hard moment," she said, because it is difficult to know how the problem can be addressed.