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Civil Plaintiff

Anthem Agrees to Pay $594M to Settle Antitrust Litigation

Even for a company as big as Anthem Inc., the nation’s largest marketer of Blue Cross Blue Shield insurance, paying a half-billion-dollar settlement might seem like a painful way to resolve litigation.

But some investment analysts and health care observers say changes to Blue Cross Blue Shield rules that are stipulated in the settlement are so favorable to Indianapolis-based Anthem’s growth prospects that they view the deal as a huge win for the company.

The settlement, struck last fall and awaiting final approval in an Alabama federal court, resolves lawsuits filed in 2012 by insurance customers alleging the Chicago-based Blue Cross Blue Shield Association and the nation’s 36 Blue Cross and Blue Shield insurers violated antitrust laws through practices that limited competition and caused higher prices. The total settlement is $2.7 billion, with Anthem shouldering $594 million.

Anthem, the exclusive Blue Cross Blue Shield licensee in Indiana and 13 other states, already is by far the largest Blues insurer, with triple the revenue of the No. 2 player, Chicago-based Health Care Service Corp., and it is the only multistate Blue that’s publicly traded — giving it easy access to capital that other Blues insurers, many of which are not-for-profit or owned by policyholders, don’t enjoy.

That strong footing should come in handy after the settlement does away with protections that bar Blues insurers from invading one another’s territories. The deal also eliminates a cap preventing Blues insurers from generating more than one-third of their revenue from the non-Blues business. In addition, it clears the way for national employers to request bids from more than one Blues insurer. Currently, only the Blues insurer for the employer’s headquarters state can compete.

Read the source article at Indiana Legal News

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