UnitedHealthcare to pay $165 million over deceptive practices

Health 3 UnitedHealthcare-affiliated insurers ordered to pay $165 million for misleading consumers It’s believed to be the highest total of civil penalties ever brought by the office under the Massachusetts Consumer Protection Act.
Three insurance companies owned by UnitedHealth Group, the parent company of UnitedHealthcare, will have to pay a collective $165 million in damages to consumers and the state, the the state attorney general’s office announced Monday.
Believed to comprise the highest total of civil penalties in any action brought by the office under the Massachusetts Consumer Protection Act, it will have to pay over $50 million in restitution to consumers and an additional $115 million in civil penalties.
The companies — HealthMarkets Inc. and two subsidiaries, The Chesapeake Life Insurance Company and HealthMarkets Insurance Agency — violated regulations by misleading customers into buying additional health insurance and misrepresenting agents as neutral parties, Attorney General Andrea Campbell’s office said in a release.
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A 48-page court order says the companies’ television, radio, and internet advertisements purported services, such as agents assisting customers in enrolling in health insurance, were free, when they were not. Those same ads described Chesapeake’s agents as being “impartial,” “objective,” and “unbiased,” though in reality they sought only to sell Chesapeake supplemental health insurance. And the agents, when speaking directly with potential customers, made the same misrepresentation that they were impartial.
By “bundling” supplemental health insurance with sales of major medical insurance, they further deceived consumers by describing plans as “coverage” that “are not insurance and do not guarantee the payment of health insurance costs,” among other violations.
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“Notably, in light of evidence that the defendants intentionally targeted ‘vulnerable consumers who could least afford their products,’ the Court found that the companies’ deceptive conduct was ‘particularly egregious,’” the AG’s office said.
The AG’s office filed a complaint against the three companies in December 2020, when it was headed by Maura Healey, that alleged the companies were violating Massachusetts consumer protection law by misleading customers into buying “unnecessary health insurance products.” Healey alleged that they cheated more than 15,000 Massachusetts residents out of more than $43.5 million since 2011. The Superior Court found all three defendants liable in April 2022.
The court issued its findings and ruling on Dec. 31, 2024 following a trial on remedies.
“The Court found that the defendants engaged in widespread misrepresentations of supplemental health insurance that they sold in Massachusetts, including intentionally engaging in bundling of major medical and supplemental insurance to deceive consumers into unknowingly buying supplemental polices,” the AG’s office said in its release.
UnitedHealthcare plans to appeal the decision, according to a spokesperson for the company.
“We disagree with the Massachusetts court’s latest ruling in the litigation involving the HealthMarkets companies,” the spokesperson said in a statement to Boston.com. “The fundamental errors in this ruling compound those already made by the trial court earlier in this case and have resulted in a decision that is clearly unsupported by the evidence and contrary to established Massachusetts law.”
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UnitedHealthcare didn’t acquire the three companies until 2019, meaning they were utilizing these deceptive practices prior to UnitedHealthcare’s involvement.
Of the $165 million the Court ordered the companies to pay, $50 million will cover paying back the consumers who had paid for those policies. The rest is civil penalties that reflect “the egregiousness of respective violations.”
UnitedHealthcare, and the healthcare industry more broadly, has come under fire recently after its chief executive was shot and killed last month by Luigi Mangione in a premeditated attack. UnitedHealth Group is the largest medical insurance company in the U.S.