State Initiatives

Minnesota Blues To Keep Proceeds From Tobacco Suit

The only health plan in the country to recover damages from tobacco companies has fought off a court challenge that sought to distribute proceeds from the tobacco settlement directly to policyholders.

Blue Cross and Blue Shield of Minnesota reached a settlement with tobacco companies in May. It calls for the insurer to receive $469 million to cover its costs of treating smoking-related illnesses over the years.

Seventeen law firms sued BCBS shortly afterward, in an effort to force the Blues to repay the money to subscribers.

Instead, BCBS intends to use the tobacco settlement proceeds to reduce tobacco use and other health risks among its members. Minnesota's Commerce Department, which oversees health plans, must approve the insurer's plan for spending settlement money.

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