Conyers and Johnson Applaud DOJ's Push to Stop Blue Cross Blue Shield from Monopolizing Health Insurance in Michigan

(Washington) – House Judiciary Committee Chairman John Conyers, Jr. (D-Mich.), and the chairman of the Subcommittee on Courts and Competition Policy, Henry C. "Hank" Johnson, Jr. (D-Ga.), today commended the Department of Justice’s (DOJ) decision to take enforcement action against apparent monopolistic practices that are blocking competition in Michigan’s health insurance industry. The DOJ today announced that they have filed a civil antitrust lawsuit against Blue Cross Blue Shield of Michigan (BCBSM) for imposing agreements on hospitals that have prevented other insurance companies from entering the marketplace and blocked discounts for consumers. The practices involve so-called "most favored nation" clauses which prevent hospitals from offering discounts on the price of services charged to any of the BCBSM’s competitors, and in some cases require that competitors be charged 30-40% more.

"I am pleased that the Department of Justice is challenging pricing arrangements by Blue Cross and Blue Shield in the state of Michigan (BCBSM)," said Conyers. "BCBSM, which is the largest provider of commercial health insurance in Michigan, is charged with using its market power to require hospitals to charge the same or higher prices to its competitors for medical services provided. According to the DOJ’s complaint, on no occasion have these provisions resulted in BCBSM paying less for hospital services. Instead, these "most favored nation" clauses have made it more difficult for smaller, more innovative competitors to compete with BCBSM. Rather than compete, and bring down prices for consumers, BCBSM is said to have simply driven up its rivals’ costs."

"When I co-sponsored legislation last year to remove the antitrust exemption for insurance companies, my concern was the same," said Johnson. "Namely, that the health insurance industry is growing profitable at the expense of competition. Whether it’s a group of insurance companies keeping prices high together, or a single insurance company using its market power to keep competition out, the result is the same – higher prices for American families. My subcommittee intends to closely follow the developments in Michigan as they unfold."

"While the lawsuit is a helpful step forward, in the long run, I also believe the insurance industry needs to be fully subject to the antitrust laws as other industries are," concluded Conyers. "That is why I have long supported repealing the McCarran-Ferguson Act that shields many insurance practices from the antitrust laws. Legislation to remove that exemption as it applies to health insurance passed the House overwhelmingly this year by a vote of 406 to 19."