Blue Cross Blue Shield Settles Antitrust Lawsuit for $2.7 Billion
Written by AskTheLawyers.com™
Written by AskTheLawyers.com™
Popular health insurance provider Blue Cross Blue Shield was accused of violating federal antitrust laws by entering into anticompetitive agreements. While the insurance provider never admitted to any wrongdoing, they agreed to settle the matter for $2.7 billion to avoid the cost of further litigation. This settlement also includes an agreement to adjust their current business practices and applies to anyone who purchased Blue Cross Blue Shield insurance from 2008-2020; the affected class is eligible to submit claims until November 5th, 2021.
Antitrust laws are designed to allow for fair competition between businesses, ensuring more choice for consumers.
When a company engages in anticompetitive behaviour, it can reduce the number of choices available to consumers by eliminating businesses that are simply unable to compete. This can lead to unhealthy monopolies and can even drive prices higher with no need to compete by offering lower prices.
The health insurance industry is not the only one to see antitrust lawsuits as of late; Facebook, Google, and other big-name corporations specifically in the tech industry have also been investigated for potential anticompetitive behavior that could be harming consumers and other businesses by eliminating the opportunity for growth and healthy competition.
The lawsuit alleged that Blue Cross Blue Shield entered into an illegal agreement with Settling Individual Blue Plans.
The contract between the various Blue insurance providers allegedly included agreements “not to compete with each other and to limit competition among themselves in selling health insurance and administrative services for health insurance,” according to the official settlement website where eligible class members can go to submit their claims. According to the class action complaint, the insurance providers engaged in illegal antitrust conduct, including: “The Market Allocation Conspiracy reduces the competition that each Blue faces and allows it to reduce the prices that it pays to healthcare providers. The Price Fixing and Boycott Conspiracy fixes those prices for all Blues, gives them the benefit of those reduced, fixed prices and further provides that the participating Blues will collectively boycott all Providers outside of their
Service Areas.” The lawsuit was originally filed by Lane Regional Medical Center in Baton Rouge, Louisiana.
These companies provide health insurance to approximately 100 million people in the U.S.
Blue Cross Blue Shield and its affiliates are among the largest insurance providers across the country. Not only do they provide health insurance to approximately 100 million people, but according to the complaint they are also responsible for “...more than 91% of professional providers and more than 96% of hospitals in the United States [that] contract directly with the Blues.”
While the Blue affiliate insurance providers named in this lawsuit did not admit to any of the allegations, they did agree to amend their business practices in addition to offering a $2.7 billion settlement to the affected class.
To learn more about the settlement and who is eligible to make a claim, visit the official settlement website.