UnitedHealth Group, the largest health insurance company in the country, recently complained that its profit in the last fiscal quarter was down 14%, even though it made an enormous $2.1 billion.
UnitedHealth Group is also a major seller of private Medicare Advantage plans and got good news recently when the Obama administration announced it would raise Medicare reimbursements by 3.3 percent, reported BangorDailyNews.com.
However, that is not enough extra money for UnitedHealth Group, which says that Medicare reimbursements are still too low, even with the 3.3 percent increase.
“We did not expect the fastest growing, most popular and most effective Medicare benefit option serving America’s seniors to be underfunded to this extent in 2014,” said UnitedHealth Group CEO Stephen Hemsley, reports KaiserHealthNews.org.
Helmsley said the company “will likely experience market exits as well as in market membership contraction as we reshape Medicare networks and benefits to respond to the continuing underfunding of this program.”
In plain English, Helmsley is suggesting that seniors will leave Medicare Advantage as his company cuts back coverage because UnitedHealth Group is "underfunded" by the U.S. government.
“Historically Medicare Advantage plans have been paid rates that are substantially higher than the cost for the same enrollees if they had been in traditional Medicare,” said Stuart Guterman, of the Commonwealth Fund.