Michigan Attorney General Dana Nessel sued the state’s biggest health insurance company in federal court Thursday. She accused Blue Cross Blue Shield of Michigan of forming an illegal monopoly
The lawsuit argues BCBSM worked with Blue Cross Blue Shield Association companies in other states to keep competition out. The complaint cites license agreements and territorial rights deals as ways BCBSM built influence.
Nessel said that’s illegal under state and federal antitrust laws.
“Competition is good, not just for the quality of care but of course to bring down prices. And that’s the purpose of the antitrust laws in the first place, that it allows us to break up these big monopolies that are so harmful,” Nessel told reporters during a press conference in Lansing Thursday morning.
While the lawsuit names several Blue-branded companies in other states as coconspirators, only BCBSM is listed as a defendant. The attorney general is suing in her capacity as both a representative of the state government and of Michigan residents.
Blue Cross Blue Shield of Michigan serves state employees. Assistant Attorney General Jonathan Comish said the company’s size and power made it the only realistic option for the state to contract with.
“They’re able to charge us, what we would call in the antitrust world, as supracompetitive fee. That is an unlawfully large amount of money per employee, per head, and with the size of the state workforce, that adds up to a real drain on the state’s resources,” Comish said.
A 2025 American Medical Association study found BCBSM controlled around 65% of the state’s healthcare insurance market. That was among the highest market concentrations in the country.
When asked for a comment on the lawsuit Thursday afternoon, BCBSM said it hadn’t yet been served and could not comment on the “specific merits” of the case. In a written statement, the company sided it was “blindsided.”
“We fundamentally disagree with the Attorney General’s characterization of an uncompetitive insurance market in Michigan. Competition exists everywhere in our state’s insurance markets, with strong local and national insurers competing with us every day. For nearly 90 years, Blue Cross has provided coverage for citizens across Michigan, in every county, without exception. This heritage, and the quality of products and services we provide, is foundational to our success in Michigan,” the company said.
The state alleges BCBSM used its power to negotiate unsustainably low reimbursement rates for care providers. Earlier this year, the company went to battle with Michigan Medicine over those concerns.
The health insurer and the University of Michigan’s health system eventually worked out a deal. But southeast Michigan father Andrew Bashi said the dispute put critical care for his infant son at risk.
“When one company holds all that power, it doesn’t have to worry about what happens to us in a negotiation, we have nowhere else to go, and they know it. Patients stop being customers. We become leverage,” Bashi said.
The lawsuit was filed in District Court for the Eastern District of Michigan. Federal cases often take months or years to play out.
Nessel, who is term-limited, is leaving office after December. She said she hopes her successor decides to keep pursuing the matter.
Keith Schipper is a campaign spokesperson for Republican Attorney General nominee Doug Lloyd. He said Lloyd would consider it.
"Since the case was just filed, Doug hasn't been privy to all the facts and evidence, but he is committed to protecting Michigan consumers, just as he protected Eaton County consumers as its prosecutor," Schipper said in a statement.
"Under Doug's leadership, the Eaton County Prosecutor's Office started the Eaton County Economic Crimes Unit to go after fraud and other illegal business practices that hurt Eaton County residents. When Doug is Attorney General, he will review this case to understand all the facts and evidence and make a determination,” said Schipper.
Naina Agrawal-Hardin is with Democratic nominee Eli Savit.
“Eli has not yet had an opportunity to review the case or the evidence, but as with any matter he will inherit, he will make a determination based on the facts, the law, and the best interest of the people of Michigan. More broadly, Eli is committed to using every available tool to lower costs for Michiganders who are struggling, just as he has done throughout his career,” Agrawal-Hardin said in an email.
The attorney general's court filing demands a trial by jury. The state is seeking monetary damages and an end to what it described as Blue Cross Blue Shield of Michigan's monopoly on the market.
