Mass. court orders three UnitedHealthcare-owned insurers to pay $165m over deceptive practices

The 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,” Attorney General Andrea Campbell’s office said in a news release.

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

A spokesperson for UnitedHealthcare said the Minnesota-based company plans to appeal the decision.

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

The ruling marks the conclusion of a case that dates back to 2006, when then-Attorney General Thomas F. Reilly sued HealthMarkets and two different subsidiaries, MEGA Life and Health Insurance Company and Mid-West National Life Insurance Company of Tennessee, claiming the firms had employed misleading marketing tactics and engaged in improper denials of patient claims. In 2009, the firms settled with the state for $17 million, and were temporarily banned from selling health benefit plans in the state.

In 2020, then-Attorney General Maura Healey revived the legal action, claiming that HealthMarkets and its subsidiaries acted in contempt of the 2009 ruling and otherwise violated state law by “cheating” more than 15,000 Massachusetts consumers out of over $43.5 million.

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“We are suing to recover the money taken from Massachusetts residents and ensure that this never happens again,” Healey, now the state’s governor, said at the time.

According to its website, HealthMarkets is not licensed as an insurance agency in Massachusetts.

The trio of companies ordered to pay $165 million were acquired by UnitedHealthcare in 2019, well after many of the violations outlined in the court order took place. UnitedHealthcare has been in the spotlight over the last month, since its chief executive was fatally shot in Manhattan. The 26-year-old charged with the chief executive’s murder reportedly criticized what he saw as an unfair and corrupt health insurance industry.

Since then, a groundswell of anger and resentment has been directed at the health insurance industry, particularly on social media, with aggrieved patients and providers pointing to their own experiences of claim denials, hefty premiums, and other difficult-to-navigate bureaucracies.

Dana Gerber can be reached at [email protected]. Follow her @danagerber6.