Approximately six million Americans are set to receive significant cash payouts as part of Blue Cross Blue Shield's (BCBS) $2.67 billion class action settlement. The long-running lawsuit, initially filed in 2013, accused the health insurance giant of anticompetitive practices that led to higher premiums and reduced choices for consumers.
Settlement Details
Blue Cross Blue Shield has denied any wrongdoing but agreed to settle to avoid the uncertainties of continued litigation. Under the terms, $2.67 billion will be distributed to affected policyholders and businesses. After deducting attorneys' fees and other costs, an estimated $1.9 billion will go directly to customers who overpaid for coverage.
Claims were submitted by the November 5, 2021 deadline, with approximately six million claims received. The average payout is expected to be around $333 per claimant, though the exact amount varies based on the duration and type of coverage each individual or business held.
Eligibility and Payouts
Payments are scheduled to begin rolling out this month, with qualifying Americans receiving notifications about their payout status. The settlement covers two primary groups: individuals and insured groups with BCBS coverage between February 7, 2008, and October 16, 2020, as well as self-funded accounts with coverage from September 1, 2015, to October 16, 2020. Those who missed the claim deadline will not receive any payment.
The case centered on allegations that BCBS's internal business practices stifled competition among its member companies, driving up costs for customers while limiting insurance options. Despite the settlement, BCBS continues to deny any legal violations. The settlement website states: 'Settling defendants deny all allegations of wrongdoing and assert that their conduct results in lower health care costs and greater access to care for their customers.' It further notes that the court has not determined fault, but both parties agreed to settle to avoid further litigation risks and costs.
Historical Context
This settlement resolves one of the largest health insurance antitrust cases in U.S. history. BCBS faced a similar lawsuit in 2010, when an antitrust suit alleged that its Michigan branch drove up healthcare costs through hospital deals. That case ended in a $2.8 billion settlement, with funds distributed to hospitals and healthcare providers.
Recent class action settlements have also affected other companies. Last month, Trader Joe's announced payouts of approximately $102 per person over a lawsuit about displaying too many credit card digits on receipts. Additionally, millions of Capital One customers are expected to receive payouts from a $425 million class action settlement with the bank.
