By: Anna Wilde Mathews
The Wall Street Journal
May 27, 2015
Blue Cross and Blue Shield health insurers cover about a third of Americans, through a national network that dates back decades. Now, antitrust lawsuits advancing in a federal court in Alabama allege that the 37 independently owned companies are functioning as an illegal cartel.
A federal judicial panel has consolidated the claims against the insurers into two lawsuits that represent plaintiffs from around the country. One is on behalf of health-care providers and the other is for individual and small-employer customers.
The antitrust suits allege that the insurers are conspiring to divvy up markets and avoid competing against one another, driving up customers’ prices and pushing down the amounts paid to doctors and other health-care providers.
The suits, which name all of the Blue Cross and Blue Shield companies as defendants as well as the Blue Cross Blue Shield Association, have already survived the insurers’ first major legal challenge.
U.S. District Judge R. David Proctor last year declined to dismiss them, saying that the plaintiffs “have alleged a viable market-allocation scheme,” which, if proven, could be an antitrust violation. Judge Proctor also said certain federal antitrust exemptions for the insurance business didn’t appear to apply to the behavior at issue in the lawsuits. The suits have moved into the discovery phase; the plaintiffs are seeking class-action status.