Medicare Advantage Win Turns Into a Loss for Healthcare Providers

Just weeks after winning a major victory over the federal government by turning a cut in Medicare Advantage funding to an increase, the CEO of the nation’s largest health insurer is saying that it was not enough and is threatening to reduce his company’s presence in that market.

In a telephone call with investor analysts last week, the CEO of UnitedHealth Group said the 3.3 percent increase, news of which resulted in an 8 percent bump in stock price, represented a net loss for the program and his company would be looking to trim its Medicare Advantage business.

“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,” CEO Stephen Hemsley said. As a result his company will be considering “market exits as well as in market membership contraction.”