High Drug Prices: UnitedHealth gouging patients
Why are prescription drugs so expensive? Somewant to blame insurance companies like UnitedHealth Group.
A group of patients says that the nation’s largest health care insurer has been charging co-payments for prescription drugs that are higher than the actual cost and United Health has been pocketing the difference.
“UnitedHealth has hidden this practice from its customers, forcing them to overpay for a wide variety of common, low-cost drugs,” the lawsuit claims, according to Reuters. “(S)uch a co-payment ‘is not a ‘co-‘ payment for a prescription drug because the insurer is paying nothing,’ but is instead ‘a hidden additional premium.”
Three Minnesota patients filed the lawsuit in federal court, but the lawsuit could ultimately add tens of thousands of patients. It is seeking to represent a nationwide class of patients that have been cheated by UnitedHealth.
The lawsuit goes as far as alleging that the insurance company has violated the federal Racketeer Influenced and Corrupt Organizations Act (RICO) — that’s the same law used to target the mob for illegal conspiracies.
Shockingly, United Health hasn’t denied the claims.
“Pharmacy benefits are administered in line with the coverage described in the plan documents,” UnitedHealth spokesman Tyler Mason said in a statement.
United Health’s Kickback Scheme: Patients pay $50 for $12 drug
UnitedHealth has been increasing the cost of prescription drugs by raising drug prices.
According to the lawsuit, the insurance company would charge patients as much as four times more than the actual cost of the drug.
“For example, the lawsuit claims, one class member paid a $50 co-payment for Sprintec, a contraceptive, while UnitedHealth paid the pharmacy only $11.65,” Reuters notes. “The pharmacy was then required to hand the extra $38.85 over to UnitedHealth under its agreement with the insurer, the lawsuit said.”
The practice, patients say, was routine.
“Patients with UnitedHealth Group insurance coverage would routinely pay more money for prescription drugs customers claim the health insurer defrauded them by setting up a system that secretly overcharged for prescription drugs,” the Chicago Tribune writes in its coverage of the lawsuit.
Bloomberg reports that this isn’t the first time that United Health has overcharged patients.
“The Minnetonka, Minnesota-based insurer was sued in 2000 for allegedly forcing consumers to hand over co-payments higher than specified by their plan contracts,” Bloomberg reports. “UnitedHealth agreed to pay about $10 million to resolve the over-charging claims spanning a three-year period starting in 1997. The insurer didn’t admit wrongdoing as part of the settlement, according to court filings.”
United Health’s track record of hurting patients
Last year, our policy director Jonathan Wilcox detailed the insurer’s routine practice of denying life-saving treatments as part of its “fail first” policies in a piece published at The Hill. Here are just three of the anti-patient policies employed by UnitedHealth:
Step Therapy: United Health requires patients to fail first by using medication after medication until their insurance company agrees to pay for the drug actually prescribed by their doctor. Not only is this practice unjust, multiple studies show it increases costs to the health care system – particularly for hospital and emergency-room care — while compromising patient treatment.
Specialty Tiers: United Health places newer medicines (especially biologics) into “specialty tiers” – another dressed-up code word for patients having to pay up to 50 percent of the total cost of these therapies. This can cause patients to spend thousands of dollars for a single drug that is medically necessary, opt for less effective drugs or choose not to fill their prescriptions at all.
Higher Co-Pays for Cancer Drugs: United Health charges patients more to receive cancer treatments orally than the same treatment provided intravenously. Learn more about why we need oral drug parity laws to stop this unfair practice.
Consumer group says insurance companies inflating premiums by blaming drug prices
United Health isn’t the only insurance company responsible for driving up the cost of prescription drugs.
Earlier this week, we covered the news that insurance companies in California have deceptively raised rates by blaming high drug prices.
Consumers Union, one of the country’s most reputable consumer advocacy groups, says that two of the largest insurance companies in California are “exploiting the outrage over high drug prices to artificially inflate their premiums for individual coverage under the Affordable Care Act.”
“The cost of prescription drugs is an issue. But pharmaceutical expenses may be the factor most open to exploitation by health plans searching for a Trojan horse with which to usher in excessively priced insurance rates,” said Dena Mendelsohn, a staff attorney at Consumers Union.