Justice Department looking at UnitedHealth Group for possible Medicare fraud

The US Department of Justice is conducting a criminal investigation into UnitedHealth Group, the largest health insurer in the US, for possible Medicare fraud, according to the Wall Street Journal.

The investigation focuses on UnitedHealth’s Medicare Advantage business practices. The probe has been active since at least last summer, and is being led by the DOJ’s healthcare fraud unit, according to the Wall Street Journal report, which cited unnamed sources.

UnitedHealth has a large footprint in Alaska, providing Medicare Advantage plans and other health insurance products. Alaska residents enrolled in these plans could be indirectly affected if the investigation leads to a settlement or changes in UnitedHealthcare’s billing practices or plan offerings.

The exact nature of the potential criminal allegations remains unclear, but the investigation follows a separate civil fraud probe launched earlier this year into whether UnitedHealth inflated diagnoses to trigger extra payments for its Medicare Advantage plans.

UnitedHealth has not been formally notified by the DOJ of the criminal investigation and called the WSJ’s reporting “deeply irresponsible.”

UnitedHealth’s stock plunging up to 18% on Thursday, hitting a five-year low and contributing to a 49% year-to-date decline.

This alleged investigation adds to other federal inquiries, including an antitrust case and shareholder lawsuits alleging the company downplayed risks.

The developments coincide with recent turmoil at UnitedHealth, including the abrupt resignation of CEO Andrew Witty and the high-profile assassination of its insurance division head, Brian Thompson, in December.

UnitedHealthcare has significantly gained market share after Obamacare (Affordable Care Act) passed in 2010. The ACA created health insurance marketplaces (exchanges) where individuals and families could purchase coverage, often with taxpayer-funded subsidies.

UnitedHealthcare expanded its presence in these marketplaces, growing from 11 states in 2021 to 30 states by 2025, covering over 1,250 counties. In 2024, 90% of UnitedHealthcare’s ACA marketplace plan members are on subsidies, with over half paying $0 monthly premiums, making these plans attractive and driving enrollment. The ACA business side is separate from the Medicare side of the business.

While UnitedHealthcare does not offer individual ACA marketplace plans in Alaska, it provides group-based plans for employers and unions.