In September, a tentative $2.7 billion settlement was reached with BlueCross BlueShield (BCBS) in an antitrust action brought on behalf of over one million individual and corporate policyholders. BCBS plans cover 109 million, or almost one-third of Americans. Under long-standing rules governing BCBS Association members, insurance purchasers could only transact insurance business with the plan located in the state where their headquarters were based – unless the home-state plan granted permission to obtain a proposal from a BCBS plan based in another state. This was true even if the employer had offices or employees in multiple states.

Viewpoints from Craig Hasday

The settlement agreement allows plans, regardless of situs, to compete for business that is spread out over multiple states and also allows BCBS plans to operate in other states, as long as they don’t use the “Blues” brand name.

The settlement also reduces the barriers for Blues plans to merge, acquire, or be acquired by other non-BCBS plans – including the largest commercial plans: Aetna, Cigna, UnitedHealthcare and Humana.

The implications may change the landscape for BCBS plans, which have dominated their domicile states.

This is especially true for smaller state plans, which may now be more likely to agree to combinations with larger insurers. But while these mergers may reduce the number of insurers, there is little doubt that competition in those smaller states will increase significantly.

The 36 BCBS plan member firms must still ratify the agreement.

So, there may be some modifications to the settlement, but this will lead to more competition and hopefully lower costs. We are hoping for this winning outcome.


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EPIC offers these opinions for general information only. EPIC does not intend this material to be, nor may any person receiving this information construe or rely on this material as, tax or legal advice. The matters addressed in this article and any related discussions or correspondence should be reviewed and discussed with legal counsel prior to acting or relying on these materials.


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Craig Hasday

President, National Employee Benefits Practice