Nessel Files Federal Antitrust Lawsuit Against Blue Cross Blue Shield Of Michigan

Michigan Advance

October 8, 2026

Michigan Attorney General Dana Nessel filed an antitrust lawsuit against Blue Cross Blue Shield of Michigan Mutual Insurance Company Thursday, alleging that the company has violated both state and federal law through agreements with other Blue Cross Blue Shield entities to “eliminate competition for health insurance services to large employers like the State.”

The lawsuit, filed in federal district court in the Eastern District of Michigan, alleges that the actions of Blue Cross Blue Shield of Michigan have caused two types of harm in Michigan.

First, the suit alleges a conspiracy among Blue Cross Blue Shield entities to “allocate customers and territories, to restrict output, and to eliminate competition for health insurance services,” which the lawsuit says prevents competition for the contract for state employee medical insurance plans, which the lawsuit says “has allowed Blue Cross to overcharge the State for administering the State employee plans for years.”

Insurance prices for non-state employees insured by Blue Cross Blue Shield of Michigan have also increased — in 2026, Blue Cross filed 23.3% to 24% annual increases for individual plan members, and 11.2% increases for small group markets, according to the Michigan Department of Insurance and Financial Services.

Second, the lawsuit claims that due to the company’s dominant market position in the state, it pays healthcare providers lower rates compared to national rates, at times “well below the providers’ cost to provide necessary care,” at which point, the suit says, “Unable to obtain appropriate, market payments from Blue Cross, Michigan providers have been forced to reduce services, cut staff, close facilities, or exit the Michigan market entirely.”

Blue Cross controls 65% of all health insurance products and 79% of the PPO market, according to an American Medical Association report cited by the state’s lawyers, making it one of the least competitive markets in the nation.

Nessel said in a press release that the lawsuit seeks to rein in “Blue Cross’s unchecked market power.”

“Blue Cross Blue Shield of Michigan has implemented substantial premium increases and deep reimbursement cuts, unchecked by meaningful competition, to drive up our costs of care, drive down our quality of care, and turn our worsening medical outcomes into their increasing profits,” Nessel said. “Today we’re taking a significant step toward ending the Blue Conspiracy and their illegal monopoly.”

Blue Cross Blue Shield of Michigan said in a statement that it was “blindsided” by the announcement from Nessel, and that as it has not yet been served with the lawsuit, it could not comment on the specifics of the case.

“We fundamentally disagree with the Attorney General’s characterization of an uncompetitive insurance market in Michigan. Competition exists everywhere in our state’s insurance markets, with strong local and national insurers competing with us every day,” Blue Cross Blue Shield of Michigan’s statement continued. “For nearly 90 years, Blue Cross has provided coverage for citizens across Michigan, in every county, without exception. This heritage, and the quality of products and services we provide, is foundational to our success in Michigan.”

The lawsuit requests a jury trial in the case, and asks the court to “permanently enjoin BCBSM from continuing their anticompetitive conduct in Michigan’s healthcare markets, and award the State all available damages, disgorgement, and civil monetary penalties.”

Representatives from the Michiganders for Money Out of Politics ballot measure campaign celebrated Nessel for the lawsuit.

“No corporation should be too powerful to evade accountability. We applaud Attorney General Nessel for making Blue Cross Blue Shield answer for their illegal monopoly that has taken money out of Michiganders’ wallets time and again, while reducing their access to quality affordable healthcare at the same time,” Christy McGillivray, a member of the group’s steering committee, said in a statement.

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