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Plaintiffs want to withdraw proposed settlement in lawsuit against insurers

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Saturday, Jan. 19, 2013, 12:01 a.m.

A proposed settlement in a federal anti-trust lawsuit has no value to insurance premium payers, the plaintiffs said Friday in a motion seeking to withdraw the proposed settlement.

Royal Mile Co., a Whitehall property management company, Cole's Wexford Hotel Inc. in Pine and an individual premium payer contend in the lawsuit that Highmark Inc. and UPMC have conspired to keep other health insurers out of Western Pennsylvania so that Highmark can charge higher premiums.

Highmark Inc. was already committed to reintroducing a lower-cost insurance plan called Community Blue insurance plan, so the settlement will not benefit them, the plaintiffs said. The proposed settlement wouldn't reduce premiums or provide refunds.

U.S. District Judge Joy Flowers Conti on Friday gave Highmark 10 days to respond.

Highmark spokesman Aaron Billger said the company will do so. “We do stand behind our offer and do believe their interpretation is flawed and inaccurate,” he said.

In addition to reintroducing the lower-cost insurance plan, Highmark agreed to help the plaintiffs pursue their claims against UPMC and set aside $4.5 million to pay for the settlement plus $300,000 to advertise it.

In court documents filed this week, UPMC argued that the settlement was a sham with no value to premium payers. The agreement would allow Highmark to avoid paying damages for its “unilateral” anti-trust behavior while using the lawsuit to pursue a grudge against UPMC.

The plaintiffs, in their motion to drop the proposed settlement, say that one of the documents UPMC filed under seal makes it clear that Highmark, before the settlement, had already committed to bringing Community Blue back. They also say the insurer hasn't provided the help it was supposed to under the settlement.

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