Nessel accuses Blue Cross Blue Shield of running an illegal monopoly

Carol Thompson, The Detroit News on Oct 8, 2026

By clicking submit, I authorize Arcamax and its affiliates to: (1) use, sell, and share my information for marketing purposes, including cross-context behavioral advertising, as described in our Privacy Policy , (2) add to information that I provide with other information like interests inferred from web page views, or data lawfully obtained from data brokers, such as past purchase or location data, or publicly available data, (3) contact me or enable others to contact me by email or other means with offers for different types of goods and services, and (4) retain my information while I am engaging with marketing messages that I receive and for a reasonable amount of time thereafter. I understand I can opt out at any time through an email that I receive, or by clicking here

LANSING, Mich. — Michigan Attorney General Dana Nessel has filed an antitrust lawsuit against Blue Cross Blue Shield of Michigan Mutual Insurance Company, alleging the insurance giant created an illegal monopoly by conspiring to eliminate competition, driving up insurance premiums and causing health care providers to close or leave the state.

Blue Cross Blue Shield of Michigan conspired with other Blue Cross Blue Shield entities to carve up territories and customers, which prevented competition for the contract to administer state employees' medical benefit plan and allowed it to overcharge the state for years, Nessel said in the lawsuit filed Oct. 8 in U.S. District Court of the Eastern District of Michigan.

Nessel sued Michigan's largest health insurer on behalf of the state government and the residents of Michigan. BCBSM has about 4.5 million customers in Michigan, dwarfing its competition.

"The same conspiracy has also harmed the People of Michigan... by depriving them of the choice and quality that a competitive market would provide, and by forcing Michigan employers and consumers to pay inflated premiums and higher out-of-pocket costs," the lawsuit states.

A spokesperson for BCBSM did not immediately respond Oct. 8 to a request for comment.

In the lawsuit, Nessel pointed to an American Medical Association report that ranked Michigan's as one of the least competitive insurance marketplaces in the U.S. and to rising prices as proof the company has gained monopoly power over the market.

Blue Cross controlled 65% of all health insurance products and 79% of the PPO market, the association’s 2025 report states. This year,Blue Cross filed annual increases of about 24% for individual plan members and 11.2% increases for small group markets, the lawsuit states.

"Blue Cross is aware of its outsized market power, and used it to turn a profit at the expense of enrollees, stating 'we're the only carrier offering plans in all 83 counties,' while attempting to justify this historic hike in premiums," the lawsuit states.

Blue Cross of Michigan abuses its dominant market position to reduce its payments to health care providers, sometimes to rates "well below the providers' cost to provide necessary care." That leads health care providers to reduce service, cut staff, close facilities or leave Michigan.

The lawsuit points to hospitals closing their labor and delivery units and rising infant mortality rates as consequences of declining reimbursement rates.

Nessel pointed to Michigan's ranking, with one of the least competitive health insurance marketplaces in the U.S., and to rising prices as proof the company has gained monopoly power over the market. Blue Cross filed annual increases of about 24% for individual plan members and 11.2% for small group markets this year.

BCBSM executives have blamed the price increases on the rapidly increasing cost of prescription drugs and hospital care.

The Detroit-based health insurer posted $1.44 billion in losses in 2024 and a combined $1.35 billion in losses over the previous three years.

Nessel hopes to recover damages for the state for the difference between the anti-competitive prices it paid for its employees' health plan and the lower prices it would have paid in a more competitive market, as well as damages for state residents for the differences between the prices they have paid and what they would have paid in a more competitive market. She also asked the court to levy civil penalties against the company and prevent it from taking anti-competitive actions.