In 2017, a major health insurance company – Anthem – announced it would no longer provide coverage through the federal marketplace for people living in Charlottesville and surrounding counties. That’s when Optima – an insurer owned by the Sentara Group – said it would sell policies, but the price was up to 266% more than customers had been paying.
Tim Jost is a law professor emeritus at Washington and Lee and a national expert on the Affordable Care Act. “There were consumers who argued that Sentara’s premium rating was illegal the way they were doing it," he recalls. "The Department of Insurance approved their premiums anyway, because they didn’t want to have a market where no insurance was available.”
Under the Affordable Care Act, insurers were supposed to use at least 80% of their revenue to pay claims, but it turned out Optima made much more than it paid out, and now the Department of Justice is taking a closer look at the company’s books.
“The Department of Justice asked for records from Sentara, and some were supplied, and then they found out that there were records that were not disclosed, and Sentara/Optima has refused to disclose those.”
Critics say Optima may have overcharged by as much as $665 million. The company is expected in U.S. District Court to explain why it has withheld documents on December 19th.
