By Bill Britt
Alabama Political Reporter
MONTGOMERY—A Federal class-action/anti-trust suit against Blue Cross BlueShield of Alabama and 37 others is being heard in Birmingham. The suit alleges that “The Individual Blue Plans’ anticompetitive conduct has also resulted in higher premiums for their enrollees for over a decade,” and this has led to, “inflated premiums (that) would not be possible if the market for health insurance in these Individual Blue Plans’ Service Areas were truly competitive.”
Subscribers’ attorneys say this has resulted in the people of Alabama paying higher rates for health insurance. Co-lead attorney Michael Hausfeld, in a phone interview with The Alabama Political Reporter said, “Restrictions by the Blues to prevent certain competition from coming into Alabama and offering more coverage or better coverage at a lower cost,” has been responsible for subscribers paying more for policies.
At issue, according to Hausfeld, is whether the insurance subscriber’s rates were higher in Alabama than they should have been because of competitive restrictions.
“They are charging rates in Alabama, according to our complaint, higher than subscribers would be able to achieve if there were greater competition,” said Hausfeld.
According to Hausfeld, because of agreements between BCBS of Alabama and other Blues, an individual cannot cross state lines to purchase insurance from another Blue that offers the same coverage at lower rates. In Alabama, BCBSAL holds approximately a 90 percent markets share in health care insurance.
The lawsuit claims that “38 Blue Cross Blue Shields along with the Blue Cross Blue Shield Association (BCBSA) entered into agreements to not to compete with one another in their respective territories in violation of federal and state laws.”
BCBSAL is currently seeking a 36 percent average rate increase on individual plans offered through the Affordable Care Act (ACA) market place, and a 26 to 41 percent hike on other plans for those who do not qualify for ACA.
Humana and UnitedHealthcare are exiting Alabama’s ACA marketplace, leaving BCBS of Alabama as the sole provider.
The suit asserts that “over the past decade, BCBSAL generally raised individual and small group premiums by amounts greater than the national average.” Citing 2010, for example, the suit attests, “BCBSAL raised individual premiums more than 17 percent in some instances.”
BCBS says it has complied fully with the laws governing its products and has done nothing wrong.
The case has been consolidated in the US District Court for the Northern District of Alabama under District Judge R. David Procter.