On Wednesday, Ford Motor Company (NYSE: F) took legal action against Blue Cross Blue Shield Association in a U.S. court. The lawsuit accuses the insurer of engaging in a price-fixing conspiracy, which resulted in inflated costs for health insurance products for Ford’s employees.
The lawsuit was filed in Detroit federal court. It claims that Blue Cross Blue Shield Association and its regional Michigan branch unlawfully divided up different parts of the country. This alleged scheme aimed to reduce competition between the organizations, allowing them to drive up profits to astronomical levels.
The allegations made by Ford are linked to a $2.7 billion settlement reached by Blue Cross Blue Shield Association and its member companies in 2020. This settlement, made with corporate and individual policyholders in Alabama federal court, is currently being appealed at the 11th U.S. Circuit Court of Appeals in Atlanta. However, Ford chose not to be part of this settlement and instead pursued its own legal claims. The appeals court has agreed to expedite the consideration of the settlement.
Both Blue Cross Blue Shield Association and Blue Cross Blue Shield of Michigan declined to comment on the ongoing litigation. Ford and its legal representatives also refrained from providing immediate comments.
In the lawsuit, spanning 40 pages, Ford alleges that the alleged anti-competitive actions of Blue Cross Blue Shield organizations deprived the automaker of the opportunity to acquire health insurance products and services. Ford claims that this occurred either from more affordable competitors or at market-driven prices.
The lawsuit aims to put an end to Blue Cross Blue Shield’s purported anticompetitive conduct. In addition, it seeks to pursue triple damages and other remedies in order to address the alleged wrongdoing.
Ford revealed that it has spent more than $500 million on premiums for “fully insured” products since 2009. These expenditures were specifically made for employees in designated areas of Michigan.
Blue Cross Blue Shield of Michigan, with 4.5 million enrollees, ranks as the ninth-largest insurer in the country, as stated in Ford’s lawsuit.
The case is currently being heard in the U.S. District Court for the Eastern District of Michigan under the name Ford Motor Co v. Blue Cross Blue Shield of Michigan Mutual Insurance Company and Blue Cross Blue Shield Association, with case number 2:23-cv-11286-LVP-EAS.