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A multi-billion-dollar federal class-action lawsuit against U.S. health insurance giant Blue Cross Blue Shield that began 13 years ago has ended and this week Michigan residents may start receiving their part of the payout.
This week, both the BCBS defendants and plaintiffs — customers who used BCBS health insurance and filed a claim in 2021 — agreed to an initial payout of $2.67 billion, totaling about $333 per claim to end the lawsuit filed in Alabama federal court.
In 2013, BCBS was sued for violating antitrust laws — which prohibits practices that deprive consumers the benefits of competition — because BCBS defendants agreed to not compete with each other, according to the settlement website.
Blue Cross and Blue Shield of Michigan Mutual Insurance Company was among the numerous health insurance companies named as a defendant in the lawsuit.
The lawsuit includes a Mackinac County, Michigan, man and two Michigan companies — Avantgarde Aviation and Hess, Hess & Daniel PC — among the named plaintiffs in the suit.
“Settling Defendants deny all allegations of wrongdoing and assert that their conduct results in lower health care costs and greater access to care for their customers. The Court has not decided who is right or wrong. Instead, Plaintiffs and Settling Defendants have agreed to a Settlement to avoid the risk and cost of further litigation,” the settlement website said.
Settlement notices have been sent and payments started being distributed to claimants at the beginning of May. The deadline to file a claim was Nov. 5, 2021.
It’s not clear how many people in Michigan are eligible for, or will receive, payments from the lawsuit. Blue Cross Blue Shield of Michigan is the largest health insurance provider in the state.
In addition to the payout, BCBS agreed to make changes to its business as part of the settlement, known as injunctive relief. For five years, a committee will monitor BCBS to ensure it adheres to best practices.
More on the BCBS settlement:
How many claims were filed against BCBS? How much money are they getting?
About 6 million plaintiffs filed claims by the November 2021 deadline, and are set to receive $333 per claim starting in May 2026.
The settlement’s total payout was $2.67 billion, however, that figure shrunk to approximately $1.9 billion after deducting attorney fees, administration expenses and other costs.
What does the lawsuit say about BCBS of Michigan?
As of 2010, at least 69% of the Michigan residents who subscribed to or were enrolled in full-service commercial health insurance (whether through group plans or through individual policies) were subscribers or enrollees of BCBS-MI, the complaint says — “Vastly more than are subscribers or enrollees of the next largest commercial insurer operating in Michigan, Priority Health, which carries only 9% of such subscribers or enrollees. The American Medical Association ranks Michigan as the third least competitive state for commercial coverage, as of 2010.”
“BCBS-MI has led the way in increasing premiums in Michigan. Premiums in the small group market grew by 9% and 13% in 2010 and 2011. BCBS-MI raised rates on individuals 22% in 2009 alone,” the suit says.
How do I know if I’m part of the settlement group?
If you were covered by certain Blue Cross Blue Shield health insurance or administrative services plans between February 2008 and October 2020, you may be a class member.
You may be eligible to receive payment if you are an Individual, Insured Group1 (and their employees) or Self-Funded Account2 (and their employees) that purchased or were enrolled in a Blue Cross or Blue Shield health insurance or administrative services plan during one of the two settlement class periods. Government accounts are excluded from the class, the settlement website says.
The settlement class period for individuals and insured groups is from Feb 7, 2008, through Oct. 16, 2020. The period for self-funded accounts is from Sept. 1, 2015, through Oct. 16, 2020. Dependents, beneficiaries (including minors), and non-employees are not eligible to receive payment.
If you are not sure if you are included in the classes, check the Long Form Notice, the Settlement Agreement and the Important Documents page on the website. You may also contact the claims administrator at info@BCBSsettlement.com or call 888-681-1142.
Medicare Advantage policies are not included in the settlement classes.
What are antitrust laws?
Contact Sarah Moore @ smoore@lsj.com
