By The Epoch Times | Created at 2026-10-09 21:46:51 | Updated at 2026-10-09 22:13:04
40 minutes ago
The state of Michigan sued Blue Cross Blue Shield of Michigan on Oct. 8, alleging a conspiracy among health plans to reduce competition, which harmed both health care providers and patients.
The state alleges that reduced competition has produced lower reimbursement rates for providers, which has led to hospital closures, the loss of labor and delivery units, and higher rates of infant mortality.
Attorney General Dana Nessel said the insurer had operated in concert with other Blue Cross Blue Shield plans to limit competition in the state. “Blue Cross Blue Shield of Michigan has implemented substantial premium increases and deep reimbursement cuts, unchecked by meaningful competition,” Nessel said in a press release.
Michigan uses Blue Cross Blue Shield of Michigan as a third-party administrator for its self-insured health plan, which covers tens of thousands of employees, according to the lawsuit. That includes access to the company’s provider networks and negotiated rates, claims adjudication, prior authorization services, and administrative services.
Nessel accused the insurer of intentionally driving up the cost of care to increase profit.
The company said it was blindsided by the announcement. In a statement emailed to The Epoch Times, the insurer declined to comment on the specific allegations because it had not yet been served with the lawsuit.
However, the company said it fundamentally disagreed with the attorney general’s characterization of the Michigan insurance market as a monopoly.
A monopoly exists, according to the U.S. Supreme Court, when a business has the power to control prices or keep out competitors. That is illegal only if the company holds that power through unfair practices rather than by having superior products or business practices.
The lawsuit contends that Blue Cross Blue Shield of Michigan has a monopoly on large group commercial health insurance services, citing the fact that the American Medical Association ranks the state fourth among least-competitive insurance markets.
Blue Cross Blue Shield of Michigan controls 65 percent of all health insurance products in the state. The company controls 69 percent of the large-group market, according to health care research group KFF.
The nearest competitors respectively hold 13 percent of the market for all health insurance and 21 percent of the large-group business.
Blue Cross Blue Shield of Michigan covers more than 4.7 million people in Michigan, plus out-of-state employees of Michigan-based companies, according to the company website. The population of Michigan is about 10.1 million.
The lawsuit claims the company engaged in a conspiracy with other Blue Cross and Blue Shield plans to divvy up customers and eliminate competition, making their dominant position illegal.
Blue Cross Blue Shield companies are independent corporations licensed by the Blue Cross Blue Shield Association to use the Blue Cross name within a geographic region.
Each of these companies agrees that it will not directly compete with the others, the lawsuit states, adding that without that agreement, these companies would be vying for the same customers, which would reduce prices.
Blue Cross Blue Shield of Michigan said it faces tough rivals throughout its region. “Competition exists everywhere in our state’s insurance markets, with strong local and national insurers competing with us every day,” the company told The Epoch Times.
The company added that its business record and the quality of its products and services are what make it successful.
In previous cases, Blue Cross companies have argued that the territories aren’t anti-competitive because they were based on business patterns that predate the association.
The suit asks for triple damages, restitution paid to consumers, and up to $50,000 in civil penalties for each contract renewal and premium payment received by the company.
