BY: Sommers Schwartz | IN: Class Action & Commercial Litigation
According to Crain’s Detroit Business, Michigan’s commercial health insurance market is the third worst in the country when it comes to competition. That designation – by the American Medical Association – is due in large part to Blue Cross/Blue Shield of Michigan’s (BCBSM) 69% statewide market share (based on 2010 data).
Last month, attorneys at Sommers Schwartz filed a class action lawsuit against the provider and the Blue Cross Blue Shield Association on behalf of Michigan consumers who have been forced to pay higher healthcare costs as a result of the groups’ illegal activity. The lawsuit, filed by Jason Thompson and Lance Young, is part of a multi-state litigation effort with firms across the nation.
The complaint alleges that BCBSM’s massive market share is the direct result of illegal agreements between the Association and its members which includes dozens of the nation’s largest health insurance companies, including BCBSM. These agreements prevent competition between different states’ Blue Cross Blue Shield providers and, in turn, drive up prices for consumers.
According to BCBSM’s website, it processed 84 million claims in 2011 worth $18.2 billion. With 4.4 million subscribers, BCBSM enjoys unrivaled market dominance within the State of Michigan and it recently has been the subject of an antitrust enforcement action by U.S. Department of Justice related to its use of most-favored nations clauses in contracts with providers. BCBSM’s significant market share is the highest share of the small group insurance market achieved by any health insurance carrier in any state in the country.
On December 12, 2012, the case was transferred to Judge R. David Proctor in the federal court for the Northern District of Alabama along with other similar cases from around the country.
Our attorneys will remain active in the litigation and we are proud to be involved in this extremely worthwhile matter. Stay tuned for updates as the case progresses!
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