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Universal hangs on for a bit longer

A judge grants it more time to come up with the millions to avoid liquidation.

By KRIS HUNDLEY
Published March 24, 2007

Florida's top insurance regulator recommended liquidating Universal Health Care Insurance Co. in St. Petersburg on Friday evening after the Medicare insurer failed to meet a state-imposed deadline for shoring up its financial reserves by as much as $160-million.

But the company, owned by Dr. Akshay Desai, said it intends to fight the action and insisted a judge's order gives it at least another month to resolve the issues.

In a letter to Florida Chief Financial Officer Alex Sink, Insurance Commissioner Kevin McCarty recommended the start of delinquency proceedings against Universal, which operates the Any, Any, Any Medicare plan with 80,000 members.

Universal's other Medicare plans, including Medicare Masterpiece, are unaffected by the state's actions. That business, which has about 45,000 members, would continue operation.

McCarty wrote that Universal's Any, Any, Any plan "has failed to increase its surplus level to the level necessary to comply with the Florida Insurance Code. And based on the information provided by the company, it is insolvent."

Sink could not be reached for comment. A spokesman for the Office of Insurance Regulation said the matter is likely to go to Circuit Court in Tallahassee next week.

Universal tried unsuccessfully to block the liquidation by asking a judge in Leon County to grant a temporary injunction. Though Circuit Judge Thomas H. Bateman III denied that motion, he allowed Universal to proceed with its demand that the state insurance department show cause why it should be liquidated.

A Universal spokesman, Bob O'Malley, said the judge's ruling means the court will take over the issue.

"We're fighting to be able to continue to offer benefits of the Any, Any, Any plans to senior citizens," O'Malley said. "But there will never be a gap in insurance coverage for any of our members, regardless of what happens."

Medicare and state officials also stressed that medical coverage would never be disrupted. If the company is liquidated, Any, Any, Any plan members would be given the opportunity to enroll in other Medicare plans.

O'Malley also denied that Universal has ever been in financial difficulty.

"All the talk on the OIR's part about insolvency is improper because it is based on disputable calculations," he said. "We get $90-million per month from the federal government from which we pay claims. We're a financially stable and secure company."

On Feb. 21, Universal's Desai signed a consent order with the state agreeing to be liquidated by 5:01 p.m. Friday if the company did not shore up its financial reserves. Sales of the company's Any, Any, Any plan in Florida and seven other states had vastly exceeded expectations.

State officials estimated Universal needed as much as $180-million in reserves at the time to be in compliance. In the past month, with people disenrolling from the plan, that figure dropped to about $160-million.

Universal's Any, Any, Any plan has had other obstacles, especially customer service problems. And many members who enrolled thinking they could visit any doctor or hospital have complained that their providers refused to accept the plan.

In a petition filed with the court Thursday, Universal's lawyers portrayed the OIR as a bully that used "improper pressure, intimidation, coercion and influence" to get Desai to sign the document. Universal's lawyers also maintained the company had a minimum of 60 days from the date of the Feb. 21 consent order to comply.

The state's plans for receivership also scared off potential investors, the petition said, with Universal's business "destroyed, ruined, devalued and otherwise irreparably and imminently damaged."

Despite Universal's claims of financial stability, its petition included a letter from the OIR to company officials dated March 9. In the letter, regulators noted that Universal's records showed the company had an estimated $19.1-million loss in 2006.

An OIR spokesman said Universal's 400 employees at its headquarters in downtown St. Petersburg are unlikely to be affected immediately by the continuing uncertainty over the company's future.

O'Malley, the Universal spokesman, put a brighter spin on things.

"We told them to come back Monday," he said. "We'll be open for business as usual."

Times staff writer Rebecca Catalanello contributed to this report. Kris Hundley can be reached at hundley@sptimes.com">href="mailto:hundley@sptimes.com" mce_href="mailto:hundley@sptimes.com">hundley@sptimes.com or (727) 892-2996.

[Last modified March 23, 2007, 23:32:06]