Costly quote a rare look into insurer A higher-than-expected quote offers a rare look inside a health insurer

In Virginia, if an insurer tells you that you won't be covered or that it will charge you more than a standard rate, it has to tell you in writing why - but one of the biggest players in the market for older Virginians didn't, the <a href="https://www.scc.virginia.gov/boi/ConsumerInquiry/" target="_blank">State Corporation Commission Bureau of Insurance</a> says.

The bureau's investigation of <a href="https://www.uhc.com/medicare?WT.mc_id=8031049" target="_blank">UnitedHealthcare Insurance</a> started when one Virginian complained that he was quoted a non-standard premium rate when applying for a <a href="https://scc.virginia.gov/MEDIGAP/PlanSearch" target="_blank">Medigap</a> policy. What regulators found when they dug in offered a rare glimpse into the inner workings of a major health insurance firm. Medigap insurance is designed to cover the portion of hospital and doctors' bills that Medicare will not cover.

It turned out that UnitedHealthcare did not look at any medical records when it assessed the man a higher-than-standard rate and did not tell him why it was charging the higher rate, bureau records show.

And the records show that it did not issue written notices of similar "adverse underwriting decisions" for 263 Virginians between 2021 and 2023.

Under state insurance law, violations could bring fines of up to $5,000 for each case. It can mean losing a license to sell insurance in Virginia.

In correspondence with the bureau, United said its underwriting department did not review the individual's application when quoting him a higher premium than the standard rate.

It said it quoted the higher rate even though it did not receive any medical records when doing so. Normally, higher rates for health insurance are supposed to reflect a determination that an applicant's health means he or she is likely to make more claims.

"There must be underwriting guidelines to follow when an applicant is rated higher based on health history," the bureau's principal insurance market examiner, Doris Irvine, wrote back, adding that the company had not sent a copy of the guidelines as the bureau had asked.

United agreed to pay $25,000 to settle the investigation and it has agreed to take the necessary steps to ensure that it sends the adverse underwriting decision notices that state law requires. It also agreed to show the bureau updated processes to correct this issue.

The company said that its agreement to settle the matter does not mean it is admitting to any violation of law. It did not respond to a request for comment.

UnitedHealthcare sells Medigap and Medicare Advantage plans in Virginia. It does not sell Affordable Care Act coverage to individuals.

Virginia's insurance law allows companies to keep a larger percentage of premium income for profit and overhead expenses with Medigap coverage than is the case for Affordable Care Act insurance.

<strong>Dave Ress</strong> (804) 649-6948dress@timesdispatch.com