Insurance companies make hospitals charge smaller insurers more.
According to officials, Blue Cross required hospitals to charge other insurers a specified percentage more than they charge Blue Cross. How much? According to a lawsuit filed, it is as much as 30% to 40% more.
As one of the most dominant health insurers in a lot of states, member plans of the Blue Cross and Blue Shield Association use their clout to negotiate hospital contracts that guarantee them better rates than other insurers, according to a civil lawsuit filed by the U.S. Department of Justice against Blue Cross Blue Shield of Michigan.
So what does this mean for you? If you’re not a Blue Cross customer, you are going to get a raw deal. You’ll end up paying more in premiums because your insurer failed to negotiate such a lucrative deal first. U.S. Assistant Attorney General Christine Varney has called it “pernicious.”