Judge dismisses Oscar's suit against Florida Blue over broker deals

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Oscar's suit against Florida Blue has been dismissed. (Pixabay)

A judge has dismissed the ongoing case between Oscar Health and Blue Cross Blue Shield of Florida over broker arrangements.

Oscar filed the suit in November, alleging that Florida Blue’s relationship with brokers was preventing it from growing its customer base in the state’s Affordable Care Act market and thus violated antitrust laws. 

Oscar said that Florida Blue strong-armed brokers into offering its exchange plans because Oscar’s alternative options were cheaper—and thus likely to attract consumers. More than 190 brokers in Florida have backed out of deals with Oscar under pressure from Florida Blue, according to the insurer. 

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Judge Paul Byron of the Middle District of Florida previously denied Oscar an injunction that would block Florida Blue from reaching exclusive agreements with insurance brokers, saying the startup insurer had failed to prove that the Blues plans' relationships with brokers were truly preventing it from growing its business.

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Byron echoed those comments in his ruling Friday.

"Florida Blue’s contract with its brokers requiring them to sell insurance only for Florida Blue at the risk of losing access to all of Florida Blue’s product lines is lawful, and Florida Blue has the right to enforce the agreement," he wrote. "Florida Blue’s efforts at enforcing a lawful contract are not coercive, regardless of the tone or tenor of the language employed by Florida Blue."

The Department of Justice previously weighed in on the case, siding with Oscar.

The DOJ (DOJ) wrote in a statement that the McCarran-Ferguson Act, a long-standing statute that exempts insurers from many federal regulations, doesn’t offer a strong enough legal foundation to dismiss Oscar’s claims. Florida Blue’s exclusive broker policy is not central to the relationship it has with its members and thus wouldn’t fall within the antitrust exemptions within McCarran-Ferguson, the DOJ said. 

“The Supreme Court has stressed that the exemption is for the ‘business of insurance,’ not the ‘business of insurers,’” the DOJ wrote. 

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