LANSING, Mich. — Attorney General Dana Nessel sued Blue Cross Blue Shield of Michigan on Thursday in federal court, accusing the insurer of building and running an illegal health insurance monopoly that raises costs and squeezes care across the state.
The complaint in the U.S. District Court for the Eastern District of Michigan says Blue Cross controls 65% of the market for health insurance products in Michigan and 79% of the PPO market. Nessel argues that dominance came through illegal, anti-competitive agreements with the broader Blue Cross Blue Shield network that allocate customers and territories, restrict product offerings, and eliminate competition.
Prosecutors say the company used that power to inflate premiums and out-of-pocket costs for businesses and consumers while driving provider reimbursements toward some of the lowest rates in the nation. Medical professionals, the suit claims, have cut services, shifted staff into administrative roles, closed facilities, or left Michigan entirely.
Nessel office cited surveys showing more than 40% of Michigan small business owners say rising health costs are pushing them to a breaking point, and over 68% of adults surveyed in 2025 skipped or delayed care because of cost. The filing also points to hospital and maternity-unit closures, including the June shutdown of Sturgis Hospital in St. Joseph County, and rising infant mortality between 2018 and 2022.
Blue Cross said it was blindsided by this announcement, has not yet been served, and fundamentally disagrees that Michigan insurance market is uncompetitive, noting nearly 90 years of coverage in every county. The suit seeks civil penalties, restitution, and findings under the Sherman Act and the Michigan Antitrust Reform Act as the court considers relief.
