Two weeks before the federal Health Insurance Marketplace opens for enrollment, a major national company is withdrawing its Florida plans from the exchange.
Cigna Inc. of Hartford, CT, told some Florida insurance brokers of the decision on Thursday through an email and said customers will be notified through regular mail starting this week. It blamed soaring costs in its Florida plans on fraud and abuse in “out-of-network substance abuse clinics and labs.”
“We have experienced an exponential increase in fraudulent and abusive care delivery practices in 2015 in Florida,” said Cigna spokesman Joseph Mondy.
Those who receive coverage from Cigna through Medicare or a group plan through an employer or union are not affected. The decision applies to 2016 plans for individuals and families that would have been available through the federal exchange at Healthcare.gov beginning Nov. 1.
About 30,000 Floridians are enrolled in 2015 Cigna plans through the Marketplace, said Amy Bogner, spokeswoman for the Florida Office of Insurance Regulation. The company said it offered seven plans in Florida this year in 23 counties in Central Florida, Tampa Bay, and coastal Southeast Florida.
There is no immediate impact on these customers, Mondy said.
“However, if they plan to renew their enrollment on the Florida Marketplace exchange for 2016, they will have to enroll in a plan offered by another health carrier.”
Cigna’s decision applies only to plans in Florida.
In explaining the alleged fraud, Mondy cited several articles from The Palm Beach Post, including “Addiction treatment bonanza: How urine tests rake in millions.”
Like other managed-care companies, Cigna gives a financial incentive for customers to stay within its tightest network of health-care providers. But it still offers substantial coverage for treatment outside the network.
Certain clinics and labs targeted the Florida health exchange plans that offer out-of-network benefits, according to the email sent to brokers. Among the abusive practices are kickbacks for referrals and excessive testing.
The magnitude of the problem became apparent to Cigna only after the company had to turn in its plan applications for 2016 to the federal Department of Health and Human Services, Mondy said. Once HHS approved the plans, Cigna could not change them; the only alternative was to pull out for 2016.
“This abuse has a direct impact on our Florida exchange customers and our ability to continue providing the quality, affordable care they expect from us,” Mondy said, adding that Cigna “will return to the Florida Marketplace exchange in 2017 with offerings that will ensure high quality, affordability, and sustainability for customers.”
Individuals can still enroll in a Cigna plan by seeing an insurance agent. But enrollment through the Marketplace, which begins Nov. 1, is the only way to obtain tax credits that subsidize the cost of premiums.
More than 90 percent of Floridians who enroll in a health plan through the exchange receive tax credits, according to federal data. Almost 1.3 million Floridians have signed up on HealthCare.gov, making Florida the national leader in enrollment on the exchange.