AG Sues Blue Cross, Alleges Anti-Competitive Practices Increased Costs
(Source: MIRS.news, Published 10/08/2026) Attorney General Dana Nessel today filed a lawsuit alleging Blue Cross Blue Shield of Michigan (BCBSM) created an illegal monopoly and used its dominance to charge employers more and pay health care providers less.
Caught in the crosshairs are families like that of Andrew Bashi, a Detroit attorney who shared his family’s fear that a contract negotiation between the health insurance giant and Michigan Medicine would result in no care for their son’s rare heart condition, leading to multiple surgeries before the infant’s first birthday.
“We were a contract dispute away from insurmountable debt,” said Bashi. “In the end, the two sides reached a deal. We were lucky, but luck is not a health care system.”
In her press conference, Nessel announced the federal antitrust lawsuit, which alleges Blue Cross, who has 4.5 million Michigan customers, used its dominant position to suppress competition in selling health insurance administration to large employers, including the state, as well as purchasing health care services.
Nessel said when the state tried to negotiate its own health care coverage, Blue Cross refused to allow competition, leading to the state lacking the leverage to negotiate better rates.
In a statement, Blue Cross said it was “blindsided” by Nessel’s lawsuit, which has not yet been served on the company.
“We fundamentally disagree with the Attorney General’s characterization of an uncompetitive insurance market in Michigan,” Blue Cross’ statement reads. “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 statement noted.
The lawsuit, filed in U.S. District Court, alleged that dominance gives Blue Cross what economists call monopsony power — the ability of a dominant buyer to control prices paid to sellers.
Nessel said that power has allowed BCBSM to work with other Blue Cross companies to reduce competition since the early 1980s and to suppress payments to providers, contributing to staff reductions, service cuts and facility closures.
Gov. Gretchen Whitmer’s father, the late Richard WHITMER, served as general counsel for BCBSM from 1977 to 1987, when he was named president and CEO.
Nessel said she didn’t speak to the Governor about the lawsuit, as the Governor is her client, not her boss.
Nessel said Blue Cross controls about 65% of Michigan’s health insurance market and 79% of the state’s PPO market.
Its power, she said, is illustrative in the contract dispute between BCBSM and Michigan Medicine, during which Blue Cross proposed an “unsustainable 30% reduction in reimbursement rates,” disrupting nearly 300,000 patients scrambling to find new health care providers.
Nessel said the insurance giant’s power is also shown in the state’s experience trying to insure an estimated 50,000 employees.
Assistant Attorney General Jonathan Comish said Blue Cross is a third-party administrator for the state’s self-funded plans, in which the cost of employees’ care is paid from state coffers and not from premiums.
BCBSM is the only insurance company in the state that is large enough to handle the size of the state’s account because it has restricted competition, Comish noted.
“With the size of the state workforce, that adds up to a real drain on the state’s resources,” he added.
The suit alleges violations of Michigan’s antitrust laws and includes claims of public nuisance and unjust enrichment. The suit seeks an injunction barring the alleged anticompetitive practices as well as damages, disgorgement of profits and civil monetary penalties.
Nessel said state law allows penalties of up to $50,000 per violation, which could amount to “hundreds of millions of dollars.”
During the press conference, Nessel acknowledged that her term ends Jan. 1, and she said she hopes her successor continues the lawsuit.
“I’ve heard both individuals that are running to succeed me … talk about caring about consumer protection and talk about affordability-related issues,” she said. “And if they mean it, then they’re going to want this lawsuit to succeed, and they’re going to make sure that this moves forward, and that they pursue it as aggressively as possible.”
Washtenaw County Prosecutor Eli Savit, a Democrat, and Republican Eaton County Prosecutor Doug Lloyd are running to replace Nessel.
Christy McGillivray, Michiganders for Money Out of Politics Steering Committee, today praised Nessel’s announcement, saying, “No corporation should be too powerful to evade accountability.”
