Michigan Attorney General Dana Nessel has filed suit against Blue Cross Blue Shield of Michigan, alleging that the insurer operated in a monopoly in the state.

Nessel's office said in an announcement that the alleged monopoly violates both state and federal antitrust laws and "has significantly contributed to, or caused, many of the rising costs and negative health outcomes facing Michigan residents." BCBSM controls 65% of Michigan's insurance market, and 79% of its PPO market, according to the suit.

Nessel argues that this monopoly was accomplished through collusion with other Blue Cross Blue Shield plans to divvy up regions and restrict product offerings, thus decreasing competition. She called it a "Blue Conspiracy."

"Blue Cross Blue Shield of Michigan has implemented substantial premium increases and deep reimbursement cuts, unchecked by meaningful competition, to drive up our costs of care, drive down our quality of care and turn our worsening medical outcomes into their increasing profits," Nessel said in the announcement. "Today we’re taking a significant step toward ending the Blue Conspiracy and their illegal monopoly."

BCBSM said in a statement to Fierce Healthcare that it was "blindsided by this announcement" and had not yet been served.

"We fundamentally disagree with the Attorney General’s characterization of an uncompetitive insurance market in Michigan," the company said. "Competition exists everywhere in our state’s insurance markets, with strong local and national insurers competing with us every day."

That Blues plans worked together to avoid competition is not a new allegation. Blue Cross Blue Shield Association affiliate plans agreed to settle class action suits from both customers and providers that argued these insurers worked together to avoid competing directly.

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