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Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz says that "special interests are pushing misleading talking points to try and stop the most ambitious healthcare reforms ever."
UnitedHealthcare says it’s dropping some of its Medicare Advantage plans that collectively cover 600,000 people.
UnitedHealthcare, owned by UnitedHealth Group, covers more than 8 million people as the nation’s largest provider of Medicare Advantage plans. The business has been under pressure in recent quarters due to rising care use and rate cuts.
Which Medicare Advantage plans is UnitedHealthcare dropping?
What they're saying:
In an earnings call last week, Tim Noel, the company’s health insurance division CEO, said UnitedHealthcare is dropping plans that cover 600,000 members, "primarily in less managed products such as PPO offerings."
The plans being dropped are primarily those in which seniors have more choices on health care providers, according to The Spokesman-Review.
UnitedHealthcare logo Photographer: Tiffany Hagler-Geard/Bloomberg via Getty Images
Noel said its Medicare Advantage members are increasing the number of doctors’ visits, tests, specialists and emergency room visits, "contributing to elevated outpatient spend."
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"Considering the continued cost trend and funding pressures, and the need to support margin recovery, we have made significant adjustments to benefits," he said.
What are Medicare Advantage plans?
Big picture view:
According to KFF, there are two ways to get Medicare, the government’s health coverage program mostly for people ages 65 and over. Standard Medicare includes hospital and medical insurance that covers a share of medical expenses after you meet a deductible. You can join a separate Medicare drug plan for prescription drug coverage.
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You can also opt for Medicare Advantage, a private health insurance plan approved by Medicare that includes hospital, medical and usually prescription drug coverage, in addition to other benefits that standard Medicare doesn’t cover.
By the numbers:
In 2024, 54%f of eligible Medicare beneficiaries – 32.8 million people out of 61.2 million – were enrolled in Medicare Advantage plans. That’s up from 19% in 2007, according to KFF. The Congressional Budget Office projects that by 2034, 64% of people enrolled in Medicare will have Medicare Advantage plans.
UnitedHealth under federal investigation
Dig deeper:
The decision to drop some plans comes as UnitedHealthcare faces a federal civil fraud investigation into how it records diagnoses that lead to extra payments for its Medicare Advantage plans, according to The Wall Street Journal.
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The paper has since said a federal criminal health care-fraud unit was investigating how the company used doctors and nurses to gather diagnoses that bolster payments.
UnitedHealth said in the filing Thursday that it "has full confidence in its practices and is committed to working cooperatively with the Department throughout this process."
The nation’s third-largest company
The backstory:
UnitedHealth Group Inc. runs one of the nation’s largest health insurance and pharmacy benefits management businesses. It also operates a growing Optum business that provides care and technology support.
UnitedHealth raked in more than $400 billion in revenue last year to come in third in the Fortune 500 list of biggest U.S. companies. Its share price topped $630 last fall to reach a new all-time high.
But the stock has mostly shed value since December, when UnitedHealthcare CEO Brian Thompson was fatally shot in midtown Manhattan on his way to the company’s annual investor meeting. A suspect, Luigi Mangione, has been charged in connection with the shooting.
In April, shares plunged some more after the company cut its forecast due to a spike in health care use. A month later, former CEO Andrew Witty resigned, and the company withdrew its forecast entirely, saying that medical costs from new Medicare Advantage members were higher than expected.
UnitedHealth’s stock price was down more than 5% on Aug. 6, to $245.78.
The Source: This report includes information from UnitedHealth Group, The Wall Street Journal, KFF, The Spokesman-Review, The Associated Press and previous LiveNow from FOX reporting.