Attorney General Dana Nessel has filed an antitrust lawsuit against Blue Cross Blue Shield of Michigan Mutual Insurance Company, alleging the insurance giant created an illegal monopoly by conspiring to eliminate competition, driving up insurance premiums and causing health care providers to close or leave the state.
Blue Cross Blue Shield of Michigan worked with other Blue Cross Blue Shield entities to carve up territories and customers, which prevented competition and meant large employers were left with only Blue Cross as an option for providing coverage to their workers, Nessel alleges in the lawsuit filed on Oct. 8 in U.S. District Court for the Eastern District of Michigan.
“I think all of this was happening in plain sight to some degree,” Nessel said during an Oct. 8 press conference. “And the numbers don’t lie. We know what their percentage of the market share is. It’s astounding.”
“The practical result for Michigan families has been fewer insurance companies to choose from, fewer medical providers to see, higher costs for everyone, and it all ends today,” she added.
BCBSM has about 4.5 million customers in Michigan, dwarfing its competition. Nessel sued the company on behalf of the state government and the residents of Michigan, but said she did not consult Gov. Gretchen Whitmer.
The AG’s Office alleges the company has worked with other Blue Cross companies to reduce competition since the early 1980s. Whitmer’s late father, Richard Whitmer, was general counsel for BCBSM from 1977 to 1987, when he became president and CEO, a position he held for 19 years until his retirement. He died in January at age 85. The Governor’s Office did not immediately respond Oct. 8 to a request for comment.
Blue Cross was “blindsided” by news of the lawsuit and can not comment on the specific case because it has not yet been served, the company said in a statement.
“We fundamentally disagree with the Attorney General’s characterization of an uncompetitive insurance market in Michigan,” the company said. “Competition exists everywhere in our state’s insurance markets, with strong local and national insurers competing with us every day. For nearly 90 years, Blue Cross has provided coverage for citizens across Michigan, in every county, without exception. This heritage, and the quality of products and services we provide, is foundational to our success in Michigan.”
Rising premium prices show Blue Cross has gained monopoly power in Michigan, Nessel’s lawsuit states. Blue Cross filed annual increases of about 24 percent for individual plan members and 11.2 percent for small group markets this year.
BCBSM executives blame the price increases on the rapidly rising costs of prescription drugs and hospital care. The Detroit-based health insurer posted $1.44 billion in losses in 2024 and a combined $1.35 billion in losses over the previous three years.
Reporting by Carol Thompson, The Detroit News / The Detroit News
USA TODAY Network via Reuters Connect
