Highmark is facing a lawsuit claiming it violated federal antitrust laws by conspiring with two other insurers to not compete against each other and increase premiums in the Western Pennsylvania market.
The lawsuit, filed Wednesday in U.S. District Court for the Western District of Pennsylvania, alleges that Highmark, the Blue Cross Blue Shield Association, Independence Blue Cross and Blue Cross of Northeastern Pennsylvania "have explicitly agreed not to compete with one another." It also claims the insurers have tried to "entrench and perpetuate" each of their dominating market positions, reported the Pittsburgh Post-Gazette.
Because of this agreement, Highmark doesn't compete in IBC's Philadelphia region or Blue Cross of Northeastern Pennsylvania's market area; however, this so-called "illegal conspiracy" has allowed Highmark to artificially inflate premiums with its dominant market position, controlling up to 80 percent of the Western Pennsylvania area, the Pittsburgh Tribune-Review reported.
The case is similar to multiple antitrust lawsuits filed against 45 Blue Cross Blue Shield plans nationwide, which have been consolidated into one case in Birmingham federal court. BCBSA, however, said agreements among its plans work well and keep costs down. "We believe this litigation is without merit, and we will vigorously defend our system and the benefits it provides to customers," said BCBSA Spokesman Tilden Katz.