Michigan: Atty General Nessel sues Blue Cross, alleging illegal monopoly

Whoa. This is a very big deal here in the Wolverine State for a lot of reasons, both economic and political. Via the Detroit Free Press:

For years, Blue Cross and Blue Shield of Michigan operated an illegal monopoly, violating state and federal antitrust and consumer protection laws to drive up health insurance premiums while limiting reimbursements to medical providers and making it more difficult for Michiganders to access quality health care, state Attorney General Dana Nessel alleges in a new, landmark lawsuit.

Calling it "arguably the most consequential antitrust case ever filed by a state against a health insurance company," Nessel sued Michigan's largest insurer Thursday, Oct. 8, in U.S. District Court in Detroit.

"Blue Cross of Michigan did everything they could to hide some of the alleged misconduct from the public," Nessel told the Detroit Free Press, "so, it took a lot of work to uncover some of the actions that were happening in our health insurance markets and their impact. ... I believe we are the first state to bring these particular claims."

Court documents lay out a complex scheme that Nessel alleges Blue Cross Blue Shield of Michigan Mutual Insurance Co. used to amass 65% of Michigan's overall commercial health insurance market – and 79% of the preferred provider organization (PPO) health insurance plans – placing Michigan fourth nationally among states with the least competitive markets.

...The company, she alleges, also abused its market dominance "to drive the rates it pays health care providers to near the lowest in the nation – sometimes even below the medical providers' own costs to provide care" while at the same time charging consumers more.

For state of Michigan employees with Blue Cross health plans, she said, the cost to cover a family went up $86 per paycheck in 2025 and another $179 per paycheck in 2026.

"That's nearly $7,000 more out of their paychecks in just 24 months," Nessel said.

...Michiganders are facing "historic" rises in health insurance premiums, court documents allege. Blue Cross filed for annual increases of 23.3%-24% in 2026 for individual plan members, and 11.2% for small group markets.

And yes, this last part is accurate, as I laid out in my 2026 rate filing analysis.

Speaking of which, they're raising 2027 rates by an additional 11.9 - 12.8% for individual market enrollees and by another 7.0 - 10.7% for small group market enrollees.

Politically speaking, this is a hell of a bombshell for several reasons:

• First, because BCBSM is one of the largest & most powerful companies in Michigan.

• Second, because of the timing of the announcement: Just 25 days before the 2026 midterm election.

• Third, because AG Nessel is leaving office at the end of this year--she's term limited and isn't running for any other office, which presumably also frees her up from having to worry about any political consequences for herself.

• Fourth, related to the above, because it just dumped a massive lawsuit in the lap of whoever replaces her in a few months: I'm sure both Democratic AG nominee Elis Savit and Republican nominee Doug Lloyd are already scrambling to figure out how to handle this news

• Fifth, every other Michigan candidate from gubernatorial nominees Jocelyn Benson & John James down to all ~300 state legislative candidates are no doubt putting together a response...and it's also going to have an impact on every federal candidate as well since it's moving healthcare costs front & center in the final days of the campaign. The U.S. Senate race in particular will be fascinating to watch given how much Democratic nominee Abdul El-Sayed has made his push for "Medicare for All" a major part of his message.

Stay tuned, this could get very interesting...