The various Blue Cross and Blue Shield affiliates around the country are illegally driving up costs for consumers by blocking competition in the health-insurance industry, according to a lawsuit filed in the Northern District of Alabama.
The case is called Fred R. Richards, et al v. Blue Cross and Blue Shield of Alabama, et al, and the lead plaintiff in the antitrust case is Richards and Sons Construction Co., a small Bessemer-based firm and Blue Cross customer.
Does this lawsuit have the potential to change the landscape of the health-insurance industry, even as the U.S. Supreme Court considers the fate of Obamacare? Here is how The Birmingham News reports it:
According to the lawsuit filed this week in the U.S. District Court for the Northern District of Alabama, the 38 member companies in the national Blue Cross and Blue Shield Association are granted service territories outside of which they are restricted from conducting business.
Such agreements are a violation of federal anti-trust law and "have resulted in fewer health insurance choices for Alabama residents and increased premiums ..." the lawsuit alleges. "This reduced competition and inflated premiums would not be possible without defendants' illegal agreements to eliminate competition and divide markets."
A Blue Cross spokesperson says the lawsuit has no merit, saying the insurer has the fifth-lowest family premiums in the country among all employers.
The company's response, however, does not seem to address the issue raised by the lawsuit: Is Blue Cross and Blue Shield using anti-competition tactics to artificially keep premiums higher than they would be in an open market?