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Antitrust: U.S. Vs. Michigan Blue Cross Blue Shield
By: John R. Graham
10.19.2010
Today's news of the overreaching federal state brings reports of antitrust action by the US Department of Justice against Blue Cross and Blue Shield of Michigan. The purported violation? As Michigan's largest health plan, BCBS was able to persuade hospitals not to charge lower fees to any other carrier. According to the story, other health plans paid hospitals 25 percent more than BCBS. I don't want to wade to deeply how Michigan BCBS has maintained such a dominant position. A credible argument is that the tax breaks it enjoys for being the insurer of "last resort" give it an advantage (and cause political conflict with other insurers in the state).
Nevertheless, this case demonstrates the absurdity of federal antitrust: The law proposes to punish one competitor for having the most market share.
Read more here.
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