Federal Probe into Sentara’s Insurance Division
TL/DR –
Sentara Health Plans, previously known as Optima Health, is under investigation by the U.S. government over allegations that it misleadingly increased premiums in Virginia in 2018 and 2019. The suspect increases occurred after Anthem Blue Cross Blue Shield withdrew from the 2018 Affordable Care Act marketplace, leaving Sentara as the sole insurer in the region. The company is accused of unfairly raising premiums while receiving over $655 million in federal subsidies; Sentara denies these accusations and says it is cooperating with the investigation.
Federal Investigation into Sentara Health Plans for Alleged Insurance Premium Hikes
According to court documents, Norfolk-based Sentara Health’s insurance subsidiary is being investigated. The allegations suggest that the subsidiary, formerly known as Optima Health, misled regulators by significantly increasing premiums in Hampton Roads and other parts of Virginia in 2018 and 2019.
In 2017, Optima Health announced a premium hike of 81% on average for its individual plans within the Hampton Roads area. However, the company was the only provider left in the market for the 2018 Affordable Care Act enrollment period after Anthem Blue Cross Blue Shield pulled out.
As per recently filed court documents, the U.S. government is now investigating whether Sentara unfairly hiked these premiums while earning over $655 million in federal subsidies. Sentara has denied allegations of overcharging customers and misleading regulators as reported by The Daily Progress and has confirmed its cooperation with investigators.
Demands for Accountability and Court Proceedings
U.S. District Court Judge Elizabeth K. Dillon ordered Michael Dudley, the former Optima President and CEO, and James Juillerat, Optima chief actuary, to provide additional sworn testimony within 60 days. Charlottesville attracted national attention, including from The New York Times, when customers learned about the drastic increase in their 2018 monthly premiums.
Ian Dixon, a software developer from Charlottesville, experienced a premium hike from $988 to $3,158 a month for his family’s insurance. He had to hire an additional employee to lower his costs to around $1,500 a month, stating that the premiums had significantly disrupted people’s lives and demanded accountability from Sentara.
Sentara spokesperson Mike Kafka defended Sentara’s intervention after Anthem’s departure in 2017. Kafka stated the company had only 26 days to develop insurance plans, claiming that over 350,000 people might have been left without insurance if Sentara didn’t act. He also mentioned that a leading independent actuarial firm verified these rates and received approval twice from Virginia regulators.
Sentara has also agreed to let former CEO Howard Kern testify about his involvement in the process. The government has been investigating Sentara since 2021, according to court documents. Despite Sentara’s attempts to keep the court records sealed, the court ruled in favor of the public’s right of access.
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