UnitedHealth Cuts Could Make Medicare Advantage Less Secure for Seniors

The decision by UnitedHealthcare, America's largest provider of Medicare Advantage plans, to drop thousands of physicians from its networks nationwide gave participants little time to review their options and seek out plans before the December 7 deadline.

While seniors do have until February 14 to switch to original Medicare, they're locked into the Advantage plans they've already chosen— plans which may further shrink their networks and drop key services throughout the year. UnitedHealth expects its Medicare Advantage network "to be 85% to 90% of its current size by the end of 2014," the company told the Wall Street Journal.

Terminated physicians have been allowed to appeal the decision, however, and stakeholders in some of the most severely affected states have taken action. Most notable is Connecticut, where roughly 2,200 physicians were dropped from United's plan according to the Kaiser Health Foundation. Following suit from physicians in Fairfield and Hartford Counties, a Connecticut federal judge temporarily blocked the insurer from terminating those contracts.

Still, the temporary ruling only affects doctors in those specific counties, and United is appealing the decision. "I think there's going to have to be a compromise," said Darcy Caslin, president of Connecticut's Beacon Retiree Benefits Group. "I don't see how carriers can be told that they can't trim down their networks. They might just pull out of the Medicare Advantage market altogether if it was sustained, but that probably won't happen."

Unfortunately for Connecticut retirees, Yale Medical Group, the state's top source for specialist physicians, was one of the providers UnitedHealth dropped. "It impacted so many people, not just because of the numbers of providers lost, but the types of providers," said Caslin. "Some areas no longer have access to any cardiologists, oncologists, or even surgeons. Yale Medical Group has many of Connecticut's top docs, and people drive from long distances to access care for a multitude of procedures and treatments." The situation is even worse in neighboring Rhode Island, where Blue Cross Blue Shield is the only competing insurer, and where Caslin said 90 percent of surgeons were removed from United's network.

The exact reasons for the cuts are unclear, but decreased federal funding could be a cause. In keeping with the Affordable Care Act, the Congressional Budget Office has planned to cut $156 billion from Medicare Advantage plans over 10 years, and insurers are predictably trying to control costs. "They're calling the process 'network optimization." said Caslin. "We saw this 10 years ago when the CMS was cutting reimbursements to carriers, and carriers pulled out of counties and states. But the way United handled this in the fall was unprecedented."

While the CMS is reviewing terminations by United and other carriers, they already responded to an American Medical Association letter, stating that United has met all of their notice and appeals requirements. The AMA and other state and specialist groups are still attempting to pressure the CMS into taking further action against United, but at present, it seems most of the carrier's cuts will stand.

Ultimately, UnitedHealth's terminations could set a precedent that makes Medicare Advantage a far less attractive option for retirees, particularly those who suffer from chronic or degenerative conditions, and who will need frequent care from specialists in the long term. "If you want to be able to access your providers and not have to worry about network, original Medicare is the place where you're going to be the safest," Caslin said. "You're going to pay more, and you'll also have to find a Part D plan, but you don't have that network access issue. As long as your providers participate with Medicare, you can access them."