A Minnesota health care battle royale

Opinion editor’s note: Editorials represent the opinions of the Star Tribune Editorial Board, which operates independently from the newsroom.

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“But what are the trade-offs?” By now, many travelers understand the need to ask this question when they buy a plane ticket on a low-cost airline. The initial fare may seem like a bargain, but it often comes with hidden costs: fees for checking bags, for seat assignment or even for paying by credit card.

A recent dust-up between HealthPartners, a Minnesota medical provider, and UnitedHealth, a Minnesota-based health insurance behemoth, strongly underscores that older consumers ought to ask the same question when they compare their options for Medicare coverage.

Regulators also must scrutinize these potential trade-offs and whether seniors have all the information they need to make informed choices.

Medicare, of course, is the government program that provides medical coverage for Americans 65 and up. When people hit the qualifying age, one of their first decisions is whether to go with “traditional Medicare” or “Medicare Advantage.” The first option is federally run. The second is administered by private health insurers, with the federal government paying these companies to provide the program’s covered benefits.

Another key difference: With traditional Medicare, “you can choose any providers who accept Medicare. You don’t need a referral to see a specialist and you don’t have to worry about your doctor leaving a plan’s network,” according to AARP. In contrast, Medicare Advantage plans typically have approved networks of medical providers specific to an area. Care at an in-network hospital or clinic typically costs less than going to an out-of-network provider.

That context is vital as the dispute between HealthPartners and UnitedHealth plays out. In late July, HealthPartners announced it “will drop out of the network next year for UnitedHealthcare Medicare Advantage plans, claiming the nation’s largest health insurer has an excessively high rate of coverage denials and frequently delays payment for services used by seniors,” according to a Star Tribune report.

There’s an eyebrow-raising data point in the letter HealthPartners sent to about 30,000 patients affected by this change: “UnitedHealthcare delays and denies approval of payment for our patients’ Medicare Advantage claims at a rate unlike any other insurer in our market. At times, this denial rate has been up to 10 times higher than other insurers we work with.”

The missive also makes clear that HealthPartners believes the impact involves more than its business bottom line: “UnitedHealthcare’s practices create unnecessary waits and delays for you and they interfere with our ability to provide you with timely and appropriate care.”

It’s an alarming communication, particularly when a follow-up interview with HealthPartners leaders suggests the “10 times higher” rate is likely a conservative estimate in some cases.

In response, UnitedHealth said this is essentially a negotiating ploy: “We proposed a contract that provided solutions HealthPartners sought to continue participating in our Medicare Advantage network. Rather than using the remaining time on our contract to implement these solutions, HealthPartners rescinded its position and is now putting Medicare Advantage patients in the middle of our negotiation, unnecessarily creating stress and fear for them while spreading outlandish, false claims.”

The dispute between the two comes as enrollment nationally in Medicare Advantage is surging. Ten years ago, just 31% of Medicare enrollees chose this option. In 2024, it’s 54%, according to KFF, a well-known health policy nonprofit.

Because public dollars fund this coverage, all of us have an interest in ensuring that the nation is getting good value for this investment and that the dollars are spent on care, not on fueling large insurers’ profits. A recent investigation by the Wall Street Journal, which focused on questionable diagnoses fueling higher government payments to Medicare Advantage insurers, adds further urgency.

HealthPartners is a respected Minnesota health care system. Its concerns about UnitedHealth’s high rate of denials vs. that of other insurers require follow-up by regulators and Congress to see if this is more widespread than one state health care system.

If it is, how are the insurance practices affecting hospitals’ bottom lines across the nation? Last fall, the Star Tribune reported that more than 70 hospitals in Minnesota “collectively tallied an operating loss of $419 million during the first half of 2023.” Is there a link?

It’s important to note that other providers in Minnesota and elsewhere may be reluctant to speak up about any problems with claim denials or delays because UnitedHealth is the nation’s largest health insurer and has significant industry and political clout.

Industry regulators also need to ensure that consumers choosing Medicare options have the information necessary to make smart choices. For example, we think consumers would like to know if one Medicare Advantage insurer disproportionately denies or delays claims. Is that information easily available?

While a national insurance trade organization told an editorial writer that “prior authorization metrics for each MA plan” will be available starting in 2026, that development requires monitoring to ensure that it’s easily accessible and understandable for consumers, particularly elderly consumers.

HealthPartners merits commendation for stepping forward. Its concerns should be taken seriously and require deeper scrutiny from regulators and lawmakers.