Federal Court Approves $2.67B Settlement of Antitrust Suit Against Blue Cross

U.S. District Judge R. David Proctor of Alabama has approved the settlement of antitrust litigation brought against Blue Cross Blue Shield Association by large employers and individuals served by one of the “Blue insurers.” The group of health insurance companies will establish a $2.67 billion settlement fund and change their allegedly anticompetitive ways.

The settlement will take effect in one month unless any of the plaintiffs appeal the judge’s approval. Judge Proctor said Blue Cross was agreeing to “significant structural changes” that will be closely monitored. According to the Wall Street Journal, plaintiff Home Depot Inc. had argued that the settlement didn’t do enough to promote competition.

Filed 10 years ago as a proposed class action, the plaintiffs maintain that the 34 companies that own Blue Cross Blue Shield – and therefore get exclusive rights to the well-known brand within specific territories – act as a cartel by carving up the nation’s health insurance market. Should the settlement take effect, according to the Wall Street Journal, “[T]he Blue insurers would drop the Blue Cross Blue Shield Association rule that limits the share of each company’s total national revenue that can come from business that isn’t under Blue brands.” A rule that limited the insurers’ ability to compete for big employers also would go away; certain employers will be able to ask for a bid from a second Blue insurer.

As explained on the website set up to administer the settlement, “Settling Defendants deny all allegations of wrongdoing and assert that their conduct results in lower healthcare costs and greater access to care for their customers.” The settlement was reached on Oct. 16, 2020 and approved by Judge Proctor on Aug. 9, 2022.

Separate antitrust claims by doctors and other healthcare providers are also pending in the consolidated action in Alabama before Judge Proctor. The providers maintain the Blue insurers conspired to reduce payments providers receive for medical services.

In re: Blue Cross Blue Shield Antitrust Litigation MDL 2406, N.D. Ala. Master File No. 2:13-cv-20000-RDP.

Edited by Tom Hagy for MoginRubin LLP.

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