United States Sues Michigan Blue Cross Blue Shield

A lawsuit has been filed against Michigan Blue Cross Blue Shield by the US Justice Department. The suit claims the health insurance company is unfairly discouraging competition and raising hospital prices for Michigan residents. The target of the suit is the "most favored nation" clauses between the insurer and various health care providers and larger hospitals. In fact the Justice Department claims there are mfn clauses or similar contracts in over 70 hospitals in the state.

In case you were wondering what exactly a most favored nation clause is, it limits the competition by paying more for hospital services resulting in protection from competition by making the competition pay more than BCBS or the same price, much more than they should be paying. The government is accusing the health insurer of violating the Sherman Act and the Michigan Antitrust Reform Act.

I found a couple of statements from cbsnews.com where "Michigan Blue Cross Blue Shield said the lawsuit is seeking to restrict the nonprofit company's ability to provide the most deeply discounted rates from Michigan hospitals. The company said that negotiated hospital discounts are a tool that Blue Cross uses to protect the affordability of health insurance for millions of Michigan residents." What a joke! I don't believe this for a second.

The lawsuit itself claims "Blue Cross has not sought or used MFN's to lower its own cost of obtaining hospital services." Christine Varney, leading the Justice Department antitrust division was quoted saying "As a result, consumers in Michigan are paying more for their health care services and health insurance."

I could definitely be wrong, but when the Justice Department files a major lawsuit they probably have some correct information. That along with my own personal observations of BCBS dominating the health insurance market in Michigan with insanely high prices.

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