There seem to be a lot of antitrust issues with health insurers at the moment. Today’s tale involves a suit against Michigan Blues (the umbrella name for Blue Cross/Blue Shield and Blue Care Network of Michigan). More than a million plaintiffs in the suit claim to have been overcharged, due to the insurer having allegedly suppressed competition, allowing them to fix prices and drive up premiums.
After the logistics get sorted out, the Michigan claimants could split up to $125 million of a proposed $2.67 billion antitrust settlement agreement from the national Blue Cross association. This sounds like a lot of money, until you consider the testimony of experts who estimated that the lack of competition could have actually cost consumers tens of billions of dollars in inflated premiums over the past 10 years.
And there’s also the possibility that the Blues might not actually feel the sting of paying out these settlements. How is that possible? According to a healthcare attorney quoted in the article, some Blues companies will likely pass those costs right along to their members in the form of higher fees and premiums.
That’s the most outrageous part about all of this, to us: that this legal penalty for dishonest business practices could potentially be passed on to Blue Cross members, who are the very people wronged in the first place. The settlement isn’t a win for Michigan Blues, and it does set an important precedent of penalizing anticompetitive practices. But we wonder if it will be enough to change the behavior of the major health insurers.
