Blue Cross and Subscribers Reach Tentative $2.7 Billion Settlement

BIRMINGHAM, Ala. – The Blue Cross Blue Shield insurance group has reached a tentative settlement in the antitrust lawsuit on behalf of subscribers. The proposed settlement assigns a payout of around $2.7 billion, along with demands for significant changes within Blue Cross Blue Shield’s business setup; however, the settlement has not yet been approval by U.S. District Judge R. David Proctor, in Birmingham, Ala., who is presiding over the case.

Under this tentative settlement, there are major changes that would increase competition among the Blue companies, such as: “dropping a rule that limits the share of each company’s total national revenue that can come from business that isn’t under Blue brands; loosening a rule that had limited the Blue insurers’ ability to compete with one another for the business of large national employers; drop a rule requiring two-thirds of each company’s national net revenue from health plans and related services to come from Blue-branded business; relax rules requiring a national employer seeking Blue Cross Blue Shield coverage to work through the Blue insurer that covers the location of its headquarters; and, certain national employers would be able to also request a bid from a second Blue insurer of their choice, setting up competition between the two Blues,” according to the Wall Street Journal report. As of now, the settlement has been approved by the Blue Cross Blue Shield Association but still requires approval by its three dozen member companies.

If this tentative settlement is approved by the Blues companies and the court, this would eradicate many of the anticompetitive practices that The Blues companies have been participating in for years by expanding competition within the health insurance market, which will subsequently lower prices for subscribers. Nonetheless, as this case is divided into two tracts for providers and subscribers, if this settlement is approved, the ongoing antitrust lawsuit on behalf of the healthcare providers against the Blue companies will continue to move forward.

Shelby Roden Partner, Robert Roden, is a member of the Litigation Committee on the Plaintiff’s Steering Committee for the healthcare provider track.