Blue Cross Blue Shield of Michigan accused of ‘anticompetitive conduct’ as part of a ‘Blue Conspiracy’

Blue Cross Blue Shield of Michigan (BCBSM) is being accused by the state attorney general’s office (AG) of being an “illegal health insurance monopoly” operating as part of a “Blue Conspiracy” that violates antitrust laws. The company is now facing a lawsuit.

In a statement announcing its court filing, Michigan Attorney General Dana Nessel said BCBSM may be violating both state and federal laws, as its actions have “significantly contributed to, or caused, many of the rising costs and negative health outcomes” facing residents of the state.

According to Nessel’s office, the insurer controls 65% of all health insurance in the state. In the PPO market, that number rises to 79%. This alleged market dominance did not come from fair competition either, the AG said. Instead, regulators allege BCBSM has conspired “with the entire Blue Cross Blue Shield network,” which operates nationwide, to “eliminate competition for health insurance services.”

By being the dominant private payer in Michigan, BCBSM has been able to inflate insurance premiums and out-of-pocket expenses to the businesses it serves, which are then passed down to consumers, the state AG added.

Further, it’s alleged the insurer has been able to drive down its reimbursement rates to “near the lowest in the nation,” leaving some providers in the red, unable to recoup costs. The AG claims this has forced providers to reduce staffing and close facilities, leading to worsening healthcare infrastructure for everyone in the state.

“BCBSM, as a member of the ‘Blue Conspiracy,’ has built and operated an illegal monopoly on health insurance coverage in Michigan, and today we brought this lawsuit for the millions of Michigan households, patients, parents, providers, doctors, small business owners, large employers and taxpayers, and consumers everywhere that are paying the price for Blue Cross’s unchecked market power,” Nessel said in a statement. “BCBSM has implemented substantial premium increases and deep reimbursement cuts, unchecked by meaningful competition, to drive up our costs of care, drive down our quality of care, and turn our worsening medical outcomes into their increasing profits.”

“Today we’re taking a significant step toward ending the Blue Conspiracy and their illegal monopoly.”

BCBSM is accused of violating the Sherman Act, a federal antitrust law, as well as the Michigan Antitrust Reform Act. The insurer is also said by the AG to be liable as a public nuisance, one that engaged in unjust enrichment—both of which could be civil violations under state law.