In early October, Grand Junction-based Rocky Mountain Health Plans, a subsidiary of UnitedHealthcare (UHC), informed its customers that UHC would no longer be offering any Medicare Advantage (MA) plans for Garfield and other western Colorado counties. UHC was the only insurer providing MA plans in Garfield.
Some background
Medicare, federal health insurance for senior citizens (ages 65 and older) was created as part of the Social Security Act of 1965. It provides free hospital insurance (Part A) and premium-paid medical insurance (Part B) and is commonly referred to as Original Medicare (OM); premium-paid prescription insurance (Part D) was added later. The program is funded by mandatory payroll taxes on individuals and employers.
However, Part B insurance (e.g., for physician services or outpatient care) covers only 80% of billed costs, and there is no limit on out-of-pocket expenses (e.g., copays or deductibles). That 20% “gap” must be paid by the patient. In response to that, private insurance companies offer supplemental plans, commonly known as “Medigap policies,” with varying levels of coverage and premium costs.
The 1965 act included provisions for seniors to acquire alternate coverage to government Medicare and private Medigap plans. Originally known as Medicare+Choice (or Part C), since 2003 it has been called Medicare Advantage. Although these plans are offered by private companies, they are under federal Medicare regulations.
MA advantages… and disadvantages
The main attraction of MA plans is that most are free or have very low premium payments (with all or part of the premiums subsidized). In addition to Parts A and B coverage, they typically also offer Part D options, as well as limited eye- and dental-care plans. Out-of-pocket expenses for enrollees are also capped. Their affordability has made them highly popular with seniors with modest or fixed incomes. Enrollment levels have ebbed and flowed since the 1960s, but in recent years have climbed to roughly half of all Medicare participants.
With affordability, however, have come restrictions not associated with OM. Principal among these, patients typically can only use designated in-network medical providers, especially those on HMO plans, and those lists of providers are subject to change. Patients also must obtain preauthorization from their principal-care provider before receiving a treatment or procedure. Medigap plans are not available to MA enrollees.
There has been a rise in claim and preauthorization denials by insurance companies, including those that would have been approved under OM. This has raised allegations of fraud by UHC and other companies, including being paid for diagnoses not treated by health professionals.
Dr. George Bohmfalk, a retired neurosurgeon here in Carbondale, has become a highly vocal opponent of MA. In a conversation with The Sopris Sun, he was particularly critical of the restrictions for enrollees and of the alleged overpayment scheme, characterizing these actions as “borderline criminal.” He added, “[MA] is great coverage until you need it.”
What happens now?
Because UHC has been the only MA underwriter in Garfield County, those enrollees — estimated at some 1,200 by the Colorado State Health Insurance Assistance Program — must obtain other insurance during the current annual enrollment period (Oct. 15 to Dec. 7). They will be automatically enrolled in OM but will need to select a Part D prescription plan if they want to continue that coverage.
High Country Volunteers, a nonprofit based in Glenwood Springs, has had certified Medicare counselors helping senior citizens with Medicare and other insurance issues for years. Reached for comment, the organization’s executive director, Mary Moon, told The Sun that “hundreds of people have contacted us” in the past several weeks, and that there is a backlog of one to two weeks to schedule an appointment with a counselor.
Moon said their counselors are encouraging enrollees to buy one of the available Medigap plans. She noted that those who have wanted to leave MA and transition to OM have not been able to obtain Medigap because of “medical underwriting” (coverage denial for preexisting conditions). She continued, “The one good thing about United pulling their [MA] plans out of the area is clients now have a Guaranteed Issue Right (through Feb. 28, 2026) to get certain Medigap plans without going through medical underwriting.”
Coverage for OM, Part D and those obtaining a Medigap plan during open enrollment starts Jan. 1. However, as Moon pointed out, those who wait to apply for Medigap until after Jan. 1 will face the 20% “gap” in Plan B coverage until the policy takes effect. She continued, “I highly recommend people choose a Medigap plan during open enrollment.”