UnitedHealth Sued for Gouging Customers on Copay Costs

Action could involve tens of thousands of consumers

Minnesota-based UnitedHealth Group Inc. has been sued by three customers who accused America’s largest health insurer of charging copayments for drugs that were significantly higher than the prices it negotiated with pharmacies and pocketing the difference. The lawsuit, filed in federal court in Minnesota, could involve tens of thousands of people insured by UnitedHealth, according to recent reports.

The lawsuit claims, for example, that one customer paid a $50 copayment for Sprintec, a contraceptive, while UnitedHealth paid the pharmacy only $11.65. The pharmacy was then required to give the extra $38.85 to UnitedHealth under its agreement with the insurer.

The lawsuit claims that such a copayment “is not a ‘co’-payment for a prescription drug because the insurer is paying nothing,” but is instead “a hidden additional premium.”

The lawsuit says UnitedHealth has hidden this practice from its customers, forcing them to overpay for a wide variety of common, low-cost drugs.

It’s not the first time UnitedHealth has been accused of overcharging customers for prescription medications. The insurer was sued in 2000 for allegedly forcing consumers to hand over copayments that were higher than those specified by their plan contracts.

UnitedHealth agreed to pay approximately $10 million to resolve the overcharging claims, which spanned a three-year period starting in 1997. The insurer didn’t admit wrongdoing as part of the settlement, according to court filings.

Sources: Reuters; October 5, 2016; and Bloomberg; October 5, 2016.