By John Tozzi and Leah Nylen | Updated on Oct 08, 2026 at 05:40 PM
The Michigan attorney general is suing the state’s Blue Cross Blue Shield insurance plan for alleged monopolization, opening a new front in a long-running legal fight over the structure of Blue Cross plans.
The federal court complaint says the company conspired with other Blue Cross plans to carve up territory and reduce competition, raising costs for state workers, Michigan consumers and businesses.
Michigan Attorney General Dana Nessel said at a news conference that the lawsuit alleged an “illegal health insurance monopoly in Michigan” that violated federal and state antitrust laws. The state also alleges the company used its market power to push payment rates to Michigan medical providers to some of the lowest in the US.
Nessel said she expected the state to recover “hundreds of millions of dollars” for customers.
Blue Cross Blue Shield of Michigan said it was “blindsided” by the announcement and hasn’t been served with the complaint yet.
“We fundamentally disagree with the attorney general’s characterization of an uncompetitive insurance market in Michigan,” the company said in an email statement. “Competition exists everywhere in our state’s insurance markets, with strong local and national insurers competing with us every day.”
Blue Cross Blue Shield insurers license the brand from a national association and operate plans independently, with agreements to limit doing business in different geographic areas. The complaint doesn’t name other companies as defendants, but it refers to other Blue-branded plans as “co-conspirator insurance companies,” including Elevance Health Inc., which operates BCBS plans in 14 states.
Representatives for the Blue Cross Blue Shield Association and Elevance didn’t immediately respond to requests for comment.
In 2020, all 35 Blue Cross Blue Shield plans agreed to pay billions in settlements to resolve allegations they illegally divided up geographic markets across the country.
But the association’s rules still prohibit competition for the largest health insurance customers, called national accounts, according to the complaint. That covers large employers with thousands of workers, including the state government.
The new complaint alleges the earlier BCBS settlements haven’t changed Michigan’s practices despite findings that the insurers’ geographic market divisions were illegal, Nessel said.
Michigan state employees who use BCBS paid an additional $7,000 a year for premiums over the past two years, she said.
Blue Cross has been among the major companies in Michigan that Abdul El-Sayed, the Democratic nominee for the US Senate, has used as a campaign foil in his race against Republican Mike Rogers.
El-Sayed, who’s running against corporate interests and in favor of a Medicare-for-all national health plan, criticized Blue Cross during a televised debate the insurer sponsored in July. After winning the nomination in August, he portrayed Rogers as “a guy who will do anything Blue Cross Blue Shield wants him to do, including raise your rates.”
BCBS Michigan has faced antitrust scrutiny before as part of a 2010 lawsuit by the Justice Department and the state over contracts that barred hospitals throughout the state from offering rival insurers better terms. The insurer ultimately settled, and Michigan changed its laws to ban health insurers from adopting those types of clauses in future contracts.
The case is the state of Michigan v. Blue Cross Blue Shield of Michigan Mutual Insurance Company, 26-cv-13834, in the Eastern District of Michigan.