UnitedHealthcare-Affiliated Insurers Ordered to Pay $165 Million for Misleading Consumers
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Historic Ruling Against Deceptive Sales Practices
A Massachusetts Superior Court has ordered HealthMarkets Inc. and its subsidiaries, The Chesapeake Life Insurance Company and HealthMarkets Insurance Agency, to pay $165 million for engaging in what the court described as “egregious” and widespread deceptive practices. These companies, owned by UnitedHealth Group, have been found guilty of misleading thousands of Massachusetts consumers into purchasing supplemental health insurance policies they did not need or fully understand they were buying.
This judgment—comprising $50 million in refunds to affected consumers and $115 million in civil penalties—is the highest penalty ever imposed under the Massachusetts Consumer Protection Act. It serves as a potent reminder of the state’s robust stance against corporate misconduct, particularly involving vulnerable consumers.
Deceptive Practices Targeted Vulnerable Populations
The companies devised tactics to obscure the true cost and nature of supplemental insurance by “bundling” it with major medical insurance plans. This led many consumers to unknowingly purchase less comprehensive coverage, believing it provided broader protection than was actually the case. Additionally, the defendants targeted financially vulnerable individuals who could least afford these unnecessary expenses…