UnitedHealth ordered to pay $165M for deceiving costumers

BOSTON — UnitedHealth Insurance and affiliated companies were ordered to pay $165 million in restitution for engaging in deceptive sales schemes against Massachusetts residents, Attorney General Andrea Joy Campbell announced.

Campbell said Monday her office has obtained a favorable order from Suffolk Superior Court against three UnitedHealth insurance companies, HealthMarkets, Inc. and its subsidiaries, The Chesapeake Life Insurance Company, and HealthMarkets Insurance Agency, Inc. f/k/a Insphere Insurance Solutions, Inc., requiring them to pay over $50 million in restitution for Massachusetts consumers and over $115 million in civil penalties for misleading consumers. Each of the defendants is owned by UnitedHealth Group, she said.

The court order is believed to impose the largest total of civil penalties in an action brought by the attorney general's office under the Massachusetts Consumer Protection Act.

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," according to information released by Campbell.

"For years, the defendants preyed on financially vulnerable individuals, deceiving them into buying products they didn't need or couldn't afford. This order holds the companies accountable and will provide meaningful restitution to consumers across the Commonwealth," said Campbell.

The companies are based in Texas and have operated in Massachusetts and around the country, she said.

UnitedHealth officials said they would appeal the judgment, according to a company statement also released Monday.

"We disagree with the Massachusetts court's latest ruling in the litigation involving the HealthMarkets companies. 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," according to the statement.

The order follows a Suffolk Superior Court complaint filed by the AG's office in 2020 against these three defendants. The complaint alleged the companies violated the state's consumer protection law by misleading consumers into buying unnecessary health insurance products and also violated a prior consent judgment meant to protect consumers.

In April 2022, all three defendants were found liable for violating the prior consent judgment and the Massachusetts Consumer Protection Act.

The court found that the companies deceived consumers both about their sales agents and the insurance products they were selling; deceptively advertised claims that their sales agents were objective and that they represented all insurance carriers; and that the companies' claims of objectivity were untrue and that the agents "did not, in fact, represent all health insurance licensed in Massachusetts or even all insurers that issued supplemental health insurance in Massachusetts," according to Campbell.

The Court also found that the defendants' sales agents deceptively passed off separate, supplemental health insurance policies (which provide less-comprehensive coverage than major medical insurance), such as specified disease insurance, as part of or included with major medical insurance in a variety of ways, including providing health insurance quotes that contained a single price, which combined the premiums for major medical insurance and the supplemental health insurance.

On Dec. 31, 2024, the court issued its Findings of Fact, Rulings of Law and Order for Judgment, following a trial on remedies.

Campbell said 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 policies.

Based on their widespread misrepresentations, the court ordered the health care companies to pay back over $50 million that consumers had paid for those policies. It also imposed over $115 million in civil penalties against the defendants for multiple different categories of violations, reflecting "the egregiousness of respective violations," she said.

Further hearings can be held to award the state reasonable costs incurred from the investigation, attorney's fees and other relief, according to Campbell.

According to information posted on its website, "UnitedHealth Group is a health care and well-being company with a mission to help people live healthier lives and help make the health system work better for everyone through two distinct and complementary businesses ... UnitedHealthcare offers a full range of health benefits, enabling affordable coverage, simplifying the health care experience and delivering access to high-quality care."

Follow staff reporter Jill Harmacinski on Twitter/X @EagleTribJill and on Threads at jillyharma.