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Blue Cross Blue Shield conspired to fix prices for health insurance, Ford Motor Co. alleged in a lawsuit filed in federal court in Detroit on Wednesday
Ford claims in the suit that various Blue Cross insurers divided up territory and fixed prices in ways that reduced competition and violated antitrust laws, leading to "astronomical profits" and "extraordinary salaries" for its executives.
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Ford's allegations relate to a $2.7 billion antitrust settlement last year in U.S. District Court in Alabama between several companies and the Blue Cross Blue Shield Association and several Blues plans. The plaintiffs in the settlement, which include Home Depot, claimed the various Blue Cross insurers violated antitrust laws by agreeing to limit competition among themselves when selling full health insurance and administering self-insured plans. The defendants denied any wrongdoing and insisted their actions in fact lowered health care costs.
Ford opted out of that settlement to pursue its own litigation against the insurer. In the 40-page complaint, Ford said the alleged scheme to curb competition among Blue Cross Blue Shield organizations deprived the automaker of "the opportunity to purchase health insurance products and services from a lower-cost competitor and/or at a price set by the free market."
Related: The hospital bill was $674,856: Why did the state pay Blue Cross over $2 million?
The lawsuit seeks to bar Blue Cross Blue Shield's alleged anticompetitive conduct, as well as triple damages and other remedies. The lawsuit says Ford spent more than $500 million on full insurance premiums between 2009 and 2013 and more than $150 million in administration fees for self-insured plans since 2013.
A majority of Ford's health insurance has been self-insured since 2015, the lawsuit says. Businesses with self-insured plans pay most claims out-of-pocket, with insurers then responsible for administering the plans and processing claims in exchange for fees. Businesses buy separate stop loss coverage to protect against extraordinarily large claims.
Ford's lawsuit said Blue Cross Blue Shield of Michigan is the country's ninth-largest insurer based on its 4.5 million enrollees.
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Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
