Blue on Blue Competition or Cooperation?

Highmark Health, the BCBS non profit based in western Pennsylvania, has affiliated with two more Blues plans, this time from New York. The long running antitrust Multi District Litigation against the Blue Cross Blue Shield was recently settled with injunctive relief, curtailing the previous limitations on geographic reach and freeing Blues plans to start competing with each other more than they had previously. It is a matter of significant speculation in the health plan industry on how the individual Blues companies will react to the changing competitive landscape, and this is one answer.

Highmark has similar affiliation agreements with the Blues plans in West Virginia, Delaware and Northeastern Pennsylvania. The enhanced scale of the organization will drive efficiencies and hopefully lower costs for beneficiaries. Before the MDL settlement the antitrust review would be cursory, at best, since the Blues territories were not overlapping and they therefore did not compete for employer or individual insurance business. In light of the settlement I wonder if the Antitrust Division may ask whether such an affiliation agreement is designed to avoid competition as well as create efficiencies. It would be a tough case, especially if the companies are well counseled about avoiding bad deal documents. 

This will be interesting ...