Customers who purchased health insurance from Blue Cross Blue Shield Association may soon begin receiving payments from a $2.6 billion antitrust settlement resolving claims that the insurer restricted competition and drove up premiums.
Who is eligible?
Individuals and businesses that bought certain BCBS health insurance or administrative service plans between 2008 and 2020 may qualify. That includes people who bought coverage directly, through an employer, or via group plans, depending on the type of policy.
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Dependents and beneficiaries, including minors and nonemployees, are not eligible for payouts. Medicare Advantage policies are also not included in the settlement class; however, Medicare supplemental policies are if they meet the dates of coverage and other criteria.
The deadline to file a claim was in November 2021, and according to the BCBS settlement website, payments are slated to go out in May.
Eligible recipients will be notified and paid via the method they selected when filing claims, such as direct deposit or check.
How much will people receive?
Payouts will vary widely. Settlement administrators say payments depend on several factors, such as how long a claimant was enrolled, the premiums paid, and the number of valid claims filed.
Many individuals are expected to receive modest amounts, while larger employers could see more significant payments.
Individuals who submit valid claims will receive cash payments from the net settlement fund, estimated to hold $1.9 billion. The fund amount is lower than the total settlement amount because attorneys’ fees and administrative expenses were deducted.
The net settlement fund will be split into two separate settlement funds. A $1.78 billion fund will be created for individuals, insured groups, and their employees. A $120 million fund will be created for self-funded accounts and their employees.
What was the lawsuit about?
The class-action lawsuit accused BCBS insurers of dividing markets and agreeing not to compete with each other, which plaintiffs argued led to higher insurance prices and fewer choices for consumers.
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BCBS denied wrongdoing but agreed to the settlement in 2020 to avoid prolonged litigation. The deal also included changes to business practices intended to increase competition, such as allowing insurers to expand beyond traditional geographic service areas under certain conditions.
The settlement is one of the largest antitrust agreements in the U.S. healthcare industry and affects millions of policyholders nationwide. While individual payouts may be relatively small, the case has drawn attention to how insurer market structures can influence pricing and competition.
