Ford suing Blue Cross Blue Shield, alleging a price-fixing conspiracy
Ford Motor Co. is suing Blue Cross Blue Shield in federal court, alleging a price-fixing conspiracy that it says resulted in the automaker being overcharged for health insurance in Michigan and other states.
The lawsuit was filed Wednesday in U.S. District Court in Detroit against the Blue Cross Blue Shield Association as well as Blue Cross Blue Shield of Michigan.
Ford claims in the suit that various Blue Cross insurers divided up territory and fixed prices in ways that reduced competition and violated antitrust laws, leading to "astronomical profits" and "extraordinary salaries" for Blues executives.
The automaker's claims relate to a $2.7 billion antitrust settlement last year in U.S. District Court in Alabama between several companies and the Blue Cross Blue Shield Association and several Blues plans.
Ford opted out of that settlement to pursue its own litigation against Blue Cross.
The plaintiffs in the settlement, which include Home Depot, claimed the various Blue Cross insurers violated antitrust laws by agreeing to limit competition amongst themselves when selling full health insurance and administering self-insured plans.
The Blue Cross defendants in the settlement denied any wrongdoing and insisted their actions in fact lowered health care costs.
Ford's lawsuit accuses Blue Cross of creating "exclusive service areas" or geographic territories in which the various Blue Cross plans wouldn't compete. This arrangement restrained competition and reduced the number of insurers in any one region, the lawsuit alleges.
Ford is seeking treble damages for the alleged antitrust violations, although its lawsuit doesn't specify an amount.
The lawsuit does say Ford spent more than $500 million on full insurance premiums between 2009 and 2013 and over $150 million in administration fees for self-insured plans since 2013.
A majority of Ford's health insurance has been self-insured since 2015, the lawsuit says. Businesses with self-insured plans pay most claims out-of-pocket, with insurers then responsible for administering the plans and processing claims in exchange for fees. Businesses buy separate "stop loss" coverage to protect against extraordinarily large claims.
Ford has full insurance health plans for some plants and regions.
Representatives for Blue Cross Blue Shield of Michigan and Ford declined comment for this article.
Contact JC Reindl: 313-378-5460 or jcreindl@freepress.com. Follow him on Twitter @jcreindl.
This article originally appeared on Detroit Free Press: Ford sues Blue Cross, alleging price fixing conspiracy
