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Universal dodges a bullet

The health care company avoids liquidation but is on the hook for many millions.

By KRIS HUNDLEY
Published February 23, 2007

Universal Health Care Insurance Co. avoided being forced into liquidation by Florida regulators on Thursday when it met a noon deadline for adding $11-million to its coffers.

But the St. Petersburg company, which offers a private fee for service Medicare plan in Florida and seven other states, remains in "hazardous financial condition" without an infusion of new capital, the state said.

And if Universal doesn't come up with more money by March 23, regulators and company executives agreed to immediate liquidation. A state-appointed receiver would take over and the more than 80,000 members in Universal's Any, Any, Any plan would be transferred to another Medicare insurer. Enrollees can also switch plans until March 31.

"Universal's got 30 days to comply with state guidelines," said Bob Lotane, spokesman for Florida's Office of Insurance Regulation, which put the company under administrative supervision Thursday. "We're not here to take companies down. We want to help them get back on their feet. They led us to believe there's a shot at doing that."

Lotane said Thursday's cash infusion allowed Universal to meet the state's minimum surplus requirement. But the company still falls short of Florida's reserve requirement, which is based on total written premiums. "Based on what we know now, they need $180-million to $200-million to meet the reserve requirement," said Lotane, who did not know the size of Universal's shortfall. "Let's just say they've got some work to do."

Bob O'Malley, Universal spokesman, said the company is confident it can meet the state's requirements and talk of liquidation is premature. "We continue to be a financially secure company and process and pay all our claims for members," he said.

Universal Health Care Insurance was incorporated last year by Dr. Akshay Desai to offer the new Medicare plan which allows members to go to any willing healthcare provider. Desai, a St. Petersburg physician, has been running a Medicare Advantage plan in Florida since 2003 through a separate corporation. That plan has about 45,000 members and is unaffected by the state's actions Thursday.

Desai's new Medicare plan attracted regulators' attention this month when they learned the company had enrolled more members than allowed based on its financial reserves. Under pressure from the state, the company stopped taking new members on Feb. 15, but said existing members would continue to receive benefits.

"We're a fast-growing company that ran up against a government regulation that we think is unnecessary and onerous," said Universal's O'Malley.

Lotane, of the state's insurance office, rejected that description of the state's solvency guidelines.

"It's Florida law," he said. "It's what they agreed to when they became licensed. These requirements were not news to them."

Lotane said the state will have two or three regulators at Universal's headquarters until the company comes into compliance.

"If a company is going down, one worry is that people may try to take what doesn't belong to them," he said. "We want to protect the assets so they can be used to pay claims."

Kris Hundley can be reached at hundley@sptimes.com or 727-892-2996.

Fast Facts:

One deadline down, one still to go

Feb. 22

Universal Health Care Insurance met the state's deadline Thursday that it come up with $11-million to meet minimum surplus requirements.

March 23

Universal will be required to prove it has met the state's reserve requirements of an estimated $180-million to $200-million by this date or face immediate liquidation.

[Last modified February 23, 2007, 12:10:14]