Lawsuit: UnitedHealth misled seniors into dropping Medicare benefits

The 9th U.S. Circuit Court of Appeals will hear arguments next month on lawsuit challenging how UnitedHealth markets Medicare Advantage plans.

In March 2025, the lawsuit, The Estate of Bibi Ahmad v. UnitedHealth Group Inc., et al., was dismissed by California District Court Judge Monica Ramirez Almadani solely on federal preemption grounds.

“This Court does not minimize the seriousness of the allegations in the Complaint or the grave issues in addressing vulnerable populations access to healthcare,” the judge wrote in her decision. “However, on the question of whether the claims in Plaintiffs Complaint are preempted, the law makes clear that they are.”

Plaintiffs appealed the class action to the 9^th Circuit and will have 15 minutes to make their case on July 10.

For years, UnitedHealth advertised seamless healthcare, the lawsuit alleged. Colorful brochures and cheerful commercials convinced seniors that UnitedHealth’s Medicare Advantage plans were designed to enhance existing government coverage, combining everything you need into one convenient package, plaintiffs say.

Instead of merely supplementing their original Medicare, seniors discovered a harsh reality after enrolling, the lawsuit claims. By signing the dotted line, they had unknowingly surrendered their government-backed benefits, trading them away for a private plan that replaced their original coverage entirely.

UnitedHealth did not respond to a message seeking comment.

'Profitability over transparency'

UnitedHealth now insures about one-third of all MA beneficiaries in the United States, plaintiffs claim, and a fifth of its health insurance customers are under MA plans. United’s MA plans are "200% as profitable as its other plans," the complaint states, and have the added benefit of being funded entirely by taxpayer dollars in the form of guaranteed monthly government payments.

"United’s MA growth has been fueled by aggressive marketing tactics that prioritize profitability over transparency, always at the expense of the most vulnerable," the lawsuit says.

In one example, A 96-year-old Southern California cancer survivor was allegedly stripped of her original Medicare coverage and left without medical recourse due to deceptive enrollment practices by UnitedHealthcare, the lawsuit alleges.

“We are pursuing this appeal not just for accountability for what happened to the seniors harmed by these practices, but to stop a deeply flawed system that quietly strips people of their Medicare rights through deceptive marketing,” said Gloria Juarez, lead counsel for Plaintiffs. “These allegedly deceptive practices affect families across the country, often at the most fragile moments of their lives.”

Plaintiffs make claims under California’s False Advertising Law, Unfair Competition Law, and Consumers Legal Remedies Act.

"United’s inaccurate advertisements that its MA members are not giving up their [Medicaore] benefits but are 'adding to them,' and that MA is a 'fallback' plan− are not isolated incidents, or puffery, but a deliberate and pervasive tactic inducing MA enrollment spanning multiple years," the complaint reads.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.