Across the United States, 37 independently owned companies carry the Blue Cross and Blue Shield name, but two antitrust lawsuits – one brought by small-business employers, the other by health care providers – claim that the companies and the Blue Cross Blue Shield Association conspire to divide up markets and prevent competition between them.
The Blue Cross Blue Shield Association licenses its brands to its member companies, which generally possess exclusive rights to the Blue Cross and Blue Shield names in defined territories. As reported in the Wall Street Journal, the plaintiffs in each case alleged that the member companies control the Association, using it to engage in “illegal market division.” Individually, the plaintiff-employers claim that the Association’s restrictions drive up customer prices and premiums, while the plaintiff-providers argue that decreased competition in the insurance marketplace results in lower payments for their services.
Just how much weight do Blue Cross and Blue Shield companies carry? Research by the Kaiser Family Foundation revealed that in some states, they held significant market share. For example, Blue Cross and Blue Shield of Alabama commands 91% of the individual business segment and 97% of the small-group market in the state.
The two lawsuits have been consolidated in an Alabama federal court, and the plaintiffs hope to obtain class-action status. Attorneys from Sommers Schwartz’s Complex Litigation Group presently sit on the Damages Committee for the combined Blue Cross and Blue Shield antitrust cases, drawing from their vast experience in class action and multidistrict litigation.
