Cigna Withdraws From Florida Health Insurance Exchange

Oct. 17--The insurance company Cigna is pulling out of Florida's health insurance exchange just two weeks before the next round of Obamacare plan enrollments begin.

The company blames high costs associated with fraudulent substance abuse treatment centers.

In a statement, Cigna spokesman Joseph Mondy said the company is "discontinuing its participation on the Florida public health insurance marketplace for 2016 because we have experienced an exponential increase in fraudulent and abusive care delivery practices in 2015 in Florida. The problem is particularly concentrated with out-of-network substance abuse clinics and labs."

The decision affects only individual and family plans offered on the public health insurance exchange that was created with the enactment of the Affordable Care Act. So-called on-exchange plans are eligible for federal tax subsidies based on a customer's income.

The decision does not affect Cigna's "off-exchange" insurance plans that are ineligible for tax subsidies, its Medicare Advantage plans or employer-sponsored plans. Mondy said the company will resume offering a new portfolio of plans on the exchange in 2017.

About 30,000 Florida residents have Cigna "on-exchange" policies, according to Amy Bogner, spokeswoman for the state Office of Insurance Regulation.

Mondy said existing customers who plan to renew their enrollment in the public health marketplace will have to enroll with another carrier.

"Cigna is initiating communications with our Florida public health insurance marketplace medical plan customers about their options" prior to the Nov. 1 start of open enrollment, Mondy said. Those customers' plans will expire on Dec. 31 if they don't choose a new provider.

The Cigna spokesman declined to name specific substance abuse clinics and labs affecting the company's costs but referred to a series of articles by The Palm Beach Post detailing a practice of excessive drug testing of addicts by addiction treatment centers in Palm Beach County, which then bill insurance companies hundreds of dollars for each test.

Some treatment centers offer addicts free housing to ensure they have enough bodies to generate millions of dollars from urine tests, the Post stories said. A single addict can generate $36,000 a month if given the most sophisticated test, the paper reported.

This month, Cigna sued Sky Toxicology and two affiliated lab firms in federal court in Palm Beach County, citing $20 million in testing-related fraud, according to the Post.

Spokesmen for Aetna, Humana and Florida Blue declined to respond to questions about expenses from substance abuse clinics but said the companies plan to remain on the 2016 health insurance exchange. UnitedHealthcare could not be reached for comment.

Jodi Ray, project director for the statewide federally funded Obamacare outreach program at the University of South Florida, said in an email that insurance counselors will likely see an increase in people seeking assistance because they didn't anticipate needing to change plans.

Counselors will help those plan members select a new program "that will equally meet their health care needs," Ray said.

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