Lawsuit: Blue Cross Stifles Competition
|By Ames Alexander and Joseph Neff, The Charlotte Observer|
|McClatchy-Tribune Information Services|
Blue Cross plans nationwide have driven up health care costs by colluding to carve up the nation's insurance market.
As the plaintiffs tell it, the arrangement works like this: 38
The plaintiffs -- three
More competition would mean lower prices, the lawsuit contends. Instead, the arrangement has allowed the insurers to dominate their markets and to charge inflated premiums.
The lawsuit argues that those clauses stifle competition by preventing other insurers from negotiating for lower costs. That, in turn, leads to higher premiums at the other insurance companies.
'We will vigorously defend'
In court filings,
The company said it is no longer including MFN clauses in new contracts and has recently removed them from old ones.
Among those representing the
"We will vigorously defend the
'Benefits of competition'
But some antitrust experts find the plaintiffs' arguments credible.
"We've always known that
Nationally, "Blue" plans cover about 100 million Americans.
The case could prove particularly significant for
"This would allow
"Let's imagine what (
Rivalries and animosities
There was a time when many of the nation's "Blue" plans vigorously competed, according to the lawsuit.
The Blue Cross plans started as prepaid hospital plans associated with the
In 1982, the two national associations merged to form the
Since then, the lawsuit alleges, the
'Ample case law'
According to the lawsuit,
As far back as 2004, some
The company argues in its court filings that "ample case law" has found that MFN provisions encourage competition and keep prices down.
"Plaintiffs have not alleged any facts showing any actual increases in provider prices, much less any increase resulting from an alleged MFN," the company wrote in a court brief.
Still, in 2012
Feldman, the health economist, said he suspects the pressure of a federal investigation brought an end to the practice. Given the insurance company's dominance in the
"It's anticompetitive," Feldman said. "They don't have a leg to stand on."
(c)2013 The Charlotte Observer (Charlotte, N.C.)
Visit The Charlotte Observer (Charlotte, N.C.) at www.charlotteobserver.com
Distributed by MCT Information Services