Blue Health Insurers Reach Tentative Antitrust Settlement For $2.7 Billion

A tentative settlement has been negotiated with The Blue Cross Blue Shield insurance group to end a sweeping antitrust suit filed on behalf of customers in a deal that would require a payout of around $2.7 billion and curtail practices that allegedly limited competition among its three dozen member-companies.

The settlement isn’t final – The Blue Cross Blue Shield Association has signed off on the agreement, but it hasn’t been approved by the boards of all 36 Blue Cross Blue Shield insurers. Nor has the settlement yet received approval from U.S. District Judge R. David Proctor, in Birmingham, Ala., who is presiding over the case.

The antitrust claims were first brought in 2012 as a proposed class action on behalf of employers and individual policyholders with Blue coverage. The suit attacked a setup that has endured for decades, under which companies typically hold exclusive rights to the Blue Cross and Blue Shield names within a certain territory.

The suit alleged that the insurers illegally conspired to divvy up markets and avoid competing against one another, driving up customers’ prices.

Under the tentative settlement, the Blue insurers would drop a rule that limits the share of each company’s total national revenue that can come from business that isn’t under Blue brands. That change could increase competition among the companies if they choose to expand their non-Blue lines of business in one another’s geographies, experts said.

The tentative settlement would also loosen a rule that had limited the Blue insurers’ ability to compete with one another for the business of large national employers.

To learn more about this case, contact us today!

Grabar Law

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