What the Latest Medicare Insurer Sanctions Mean to You

U.S. regulators recently imposed sanctions on health insurer Cigna-HealthSpring because of issues with certain Medicare offerings. Whether you’re currently a Cigna-HealthSpring customer or shopping for Medicare plans now or next open enrollment, sanctions can sound serious and even scary, especially when something as serious as your health care is involved.

Mature Health Center turned to Medicare MarketPlace^® to explain how the federal government’s latest penalties play out when it comes to you, the consumer. While Medicare MarketPlace does not offer Cigna-HealthSpring’s Medicare Advantage and Medicare Part D Prescription Drug plans impacted by these sanctions, it does offer Cigna’s Medicare Supplement plans, which are underwritten by American Retirement Life Insurance company (ARLIC.)

If you have Original Medicare and an ARLIC Medicare Supplement health insurance plan, you are unaffected by the sanctions against Cigna-HealthSpring. The sanctions only involve Cigna-HealthSpring’s plans for Medicare Advantage (also called Medicare Part C, which is private insurance that replaces Original Medicare) and Medicare Part D (which is prescription drug coverage.)   

If you have a Cigna-HealthSpring Medicare Advantage health insurance plan or a Cigna-HealthSpring Medicare Part D Prescription Drug plan, let’s first look briefly at what made headlines, so you can fully understand how you may be impacted. Major news outlets reported on Jan. 22 that the Centers for Medicare and Medicaid Services (CMS) suspended new enrollment in Cigna Corp’s Medicare Advantage (Part C) health insurance and prescription drug (Part D) plans, citing deficiencies in how it ran its plans and saying numerous violations threatened patients’ health. In addition, Cigna-HealthSpring was ordered to cease marketing the Medicare Advantage policies and standalone Prescription Drug Plans, also called PDP. CMS also alleged other violations including maintaining inadequate documentation and failing to implement a risk assessment program.

So what if you’re a current policyholder of a Cigna-HealthSpring Medicare Advantage or a Cigna-HealthSpring Medicare Part D Prescription Drug plan?

Cigna-HealthSpring, which reported the sanctions in a regulatory public filing, stated that the suspension, effective immediately, does not affect members currently enrolled in the plans, as reported by Reuters.

However, Bloomberg reported that current Cigna-HealthSpring clients who are affected by the issues cited by CMS can drop their Cigna-HealthSpring coverage and buy policies from other insurers.

For now, the sanctions mostly affect consumers who are aging into Medicare — meaning they are turning 65 and becoming eligible for Medicare — because Cigna-HealthSpring is banned from marketing and offering new Medicare Advantage and Prescription Drug plans.

The sanctions come just more than a month after Medicare’s Open Enrollment Period wrapped up. Open enrollment, which runs from Oct. 15 to Dec. 7 each year, is when Medicare beneficiaries are allowed to shop for Medicare Advantage and prescription drug plans for the following year. Consumers could again have the choice of enrolling in new Cigna-HealthSpring Medicare Advantage and drug plans next fall, but only if Cigna-HealthSpring satisfies CMS that all violations have been addressed. (Cigna-HealthSpring will not be allowed to market or sell Medicare Advantage policies or Part D drug plans to new clients until it fixes the problem. CMS is requiring that an independent monitor audit Cigna-HealthSpring’s handling of the matter. )

Medicare MarketPlace Vice President Brian Hickey said that given the usual length of time for corrective measures to be outlined, enacted and approved in such sanctions, he anticipates Cigna-HealthSpring’s Medicare Advantage and PDP plans will not be available for purchase during next fall’s open enrollment but that they likely could be available again in 2017. 

Herb Fritch, president of Cigna-HealthSpring, said in a statement reported by USA Today that the company’s internal quality review processes already had identified some of the areas in advance of CMS’ findings and that the company already had started to work to remedy them.

“As a company committed to delivering quality products and services, we focus on putting customers first,” Fritch said in the statement. “The findings in the audit are unacceptable and will be addressed in full partnership with CMS.”

Medicare MarketPlace’s goal is to help consumers understand Medicare, even if the products in the news aren’t sold through Medicare MarketPlace. If you have any questions about your current plan, whether you’re a Cigna-HealthSpring customer or new to Medicare, you can call Medicare MarketPlace at 1-800-639-0781 to speak to a Licensed Insurance Agent.