Blue Cross Plans Announce Settlement in Antitrust LawsuitIt was announced on September 24, 2020, that the nation’s Blue Cross plans have reached a tentative $2.7 billion settlement in a federal lawsuit filed by their customers that accuses the group of engaging in a conspiracy to thwart competition among the individual companies, according to two people with knowledge of the discussions.The settlement, which was first reported by The Wall Street Journal, would need to be agreed to by each of the three dozen Blue Cross insurers that make up the trade group, the Blue Cross Blue Shield Association. Judge R. David Proctor of the U.S. District Court for the Northern District of Alabama, who is overseeing the case in that state, also still needs to approve the proposed settlement.Under the proposed terms, the Blue Cross plans, which operate independently, would no longer have to adhere to some of the rules established by the association that the plaintiffs said prevent the companies from engaging in head-to-head competition.One in three Americans is covered by a Blue Cross plan, and these plans are often the largest health insurer in their respective state or region. The plans include those operated by the for-profit giant Anthem in states like California and New York. Another large operator is Health Care Service Corp., which runs nonprofit Blue Cross plans in five states, including Illinois and Texas.The association said it could not comment on ongoing litigation but said, “Blue Cross and Blue Shield companies will remain committed to improving the health of our members and our local communities.”The dominance of these plans in markets with only a handful of major competitors has long raised concerns about a dearth of competition that can lead to higher prices for both employers and individuals. While federal officials have blocked megamergers between for-profit giants like Anthem with Cigna and Aetna with Humana, the Blue Cross plans adhere to the association guidelines on how they can use the powerful Blue Cross trademark and are accused of engaging in anti-competitive behavior by essentially dividing the health insurance market among themselves.Under the proposed settlement, the plans would compete for business from national employers, which purchase health insurance for their workers that often spans several states. The Blue Cross plans would also be able to compete more aggressively in areas where they do not use the Blue Cross name. A plan therefore could offer a health plan under a different name in a state where it is not headquartered.While the proposed settlement would bring an end to litigation that started in 2012, the association also faces a separate legal challenge, from hospitals and doctors, that is unaffected. “We are proceeding with the litigation,” said Joe R. Whatley, an attorney who is heading the case involving providers.