Court orders UnitedHealth companies to pay millions to Mass. consumers

Hadley Barndollar, masslive.comMassLive.com

Three UnitedHealth insurance companies will pay millions to Massachusetts consumers and the state for “particularly egregious” deceptive conduct, according to a Suffolk Superior Court order published last month.

The order is believed to impose the highest amount of civil penalties in an action brought by the Attorney General’s Office under the Massachusetts Consumer Protection Act. More than $50 million in restitution will go to consumers, while the state will receive more than $115 million in civil penalties.

The Attorney General’s Office filed a civil complaint against HealthMarkets, Inc. and its subsidiaries the Chesapeake Life Insurance Company and HealthMarkets Insurance Agency Inc. in 2020. The allegations, which included misleading consumers into purchasing supplemental health insurance products, dated back to 2011. The Texas-based companies were acquired by UnitedHealth Group in 2019.

UnitedHealth Group is the parent company of United Healthcare, which was recently thrown into a national firestorm after its CEO, Brian Thompson, was shot to death in Manhattan, a killing appeared to be motivated by disdain for American health insurance. Luigi Mangione, 26, was charged with Thompson’s murder following an intense five-day manhunt.

The Suffolk Superior Court complaint purported that the health insurance companies violated the state’s consumer protection law by misleading consumers into buying unnecessary health insurance products. It further alleged that sales agents targeted low-income and Medicaid-eligible consumers.

In 2020, then-Attorney General Maura Healey said the companies had cheated more than 15,000 Massachusetts residents out of more than $43.5 million since 2011.

Last month, on Dec. 31, 2024, the court released its ruling on restitution and civil penalties following a 2023 bench trial.

“For years, the defendants preyed on financially vulnerable individuals, deceiving them into buying products they didn’t need or couldn’t afford,” Attorney General Andrea Joy Campbell said in a statement Monday. “This order holds the companies accountable and will provide meaningful restitution to consumers across the Commonwealth.”

In response to a request for comment by MassLive, UnitedHealthcare, the health insurance branch of UnitedHealth Group, said it will appeal the court’s decision.

“We disagree with the Massachusetts court’s latest ruling in the litigation involving the HealthMarkets companies,” the statement said. “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.”

As of July 2023, Chesapeake Life Insurance Company was no longer licensed in Massachusetts. And in June 2024, HealthMarkets Insurance Agency Inc. voluntarily exited the market in the state.

The latter’s website states: “HealthMarkets Insurance Agency, Inc. is licensed as an insurance agency nationwide except in MA.”