Blue Cross Blue Shield Association

Blue Cross Blue Shield Association

Type	Independent
Industry	Health insurance
Founded	1929
Headquarters	Michigan Plaza Chicago, Illinois
Key people	Scott Serota, President and CEO[1]
Products	PPOs, HMOs
Website	bcbs.com

The Blue Cross Blue Shield Association (BCBSA) is a federation of 36 separate United States health insurance organizations and companies, providing health insurance to more than 106^[2] million Americans.^[3] Blue Cross was founded in 1929, and became the Blue Cross Association in 1960, while Blue Shield emerged in 1939 and the Blue Shield Association was created in 1948. The two organizations merged in 1982.

History

Health care in the United States
Government Health Programs
Federal Employees Health Benefits Program Indian Health Service Veterans Health Administration Military Health System / TRICARE Medicare Medicaid / State Health Insurance Assistance Program (SHIP) State Children's Health Insurance Program (CHIP) Program of All-Inclusive Care for the Elderly (PACE) Prescription Assistance (SPAP)
Private health coverage
Health insurance in the United States Consumer-driven health care Flexible spending account (FSA) Health Reimbursement Account Health savings account (HSA) High-deductible health plan (HDHP) Medical savings account (MSA) Private Fee-For-Service (PFFS) Managed care (CCP) Health maintenance organization (HMO) Preferred provider organization (PPO) Exclusive provider organization (EPO) Medical underwriting
Health care reform law
Emergency Medical Treatment and Active Labor Act (1986) Health Insurance Portability and Accountability Act (1996) Medicare Prescription Drug, Improvement, and Modernization Act (2003) Patient Safety and Quality Improvement Act (2005) Health Information Technology for Economic and Clinical Health Act (2009) Patient Protection and Affordable Care Act (2010)
State level reform
Massachusetts health care reform Oregon Health Plan Vermont health care reform SustiNet (Connecticut) Dirigo Health (Maine)
Municipal health coverage
Fair Share Health Care Act (Maryland) Healthy Howard (Howard Co., Maryland) Healthy San Francisco My Health LA Healthy Way LA

Blue Cross and Blue Shield developed separately, with Blue Cross plans providing coverage for hospital services and Blue Shield covering physicians' services.^[4]

Blue Cross is a name used by an association of health insurance plans throughout the United States. Its predecessor was developed by Justin Ford Kimball in 1929, while he was vice president of Baylor University's health care facilities in Dallas, Texas.^[5] The first plan guaranteed teachers 21 days of hospital care for $6 a year, was later extended to other employee groups in Dallas, and then nationally.^[5] The American Hospital Association (AHA) adopted the Blue Cross symbol in 1939 as the emblem for plans meeting certain standards. In 1960, the AHA commission was superseded by the Blue Cross Association. Blue Cross severed its ties with the AHA in 1972.

Blue Shield was developed by employers in lumber and mining camps of the Pacific Northwest to provide medical care by paying monthly fees to medical service bureaus composed of groups of physicians.^[6] In 1939, the first official Blue Shield plan was founded in California. In 1948, the symbol was informally adopted by nine plans called the Associated Medical Care Plan, and was later renamed the National Association of Blue Shield Plans.

In the 1960s the US government chose to partner with Blue Cross and Blue Shield companies to administer Medicare.^[6]

In 1982, Blue Shield merged with The Blue Cross Association to form the Blue Cross and Blue Shield Association (BCBS).^[7]

Prior to 1986, organizations administering BCBS were tax exempt under 501(c)(4) as social welfare plans. However, the Tax Reform Act of 1986 revoked the exemption, because the plans sold commercial-type insurance. They became 501(m) organizations, subject to federal taxation, but entitled to "special tax benefits"^[8] under IRC 833.^[9]

In 1994, BCBS changed to allow its licensees to be for-profit corporations.^[4] During 2010, Health Care Service Corporation, the parent company of BCBS in Texas, Oklahoma, New Mexico, Montana and Illinois, nearly doubled its income to $1.09 billion in 2010, and began four years of billion-dollar profits.^[10] In the final spending bill for FY 2015 after much lobbying since 2010, nonprofit Blue Cross and Blue Shield plans continue to have special tax breaks that were understood to be threatened by the Affordable Care Act of 2010.^[11]

Current organization

Blue Cross and Blue Shield insurance companies are licensees, independent of the association and traditionally of each other, offering insurance plans within defined regions under one or both of the association's brands. Blue Cross Blue Shield insurers offer some form of health insurance coverage in every U.S. state. They also act as administrators of Medicare in many states or regions of the US^[12] and provide coverage to state government employees as well as to the federal government employees under a nationwide option of the Federal Employees Health Benefit Plan.^[13]

The 14-state Anthem Inc is the largest Blue Cross Blue Shield plan, and is a publicly traded company. Other multi-state organizations include CareFirst in the Mid-Atlantic, The Regence Group in the Pacific Northwest, and Highmark which serves Pennsylvania, Delaware, and West Virginia. The largest non-investor-owned member is Health Care Service Corporation, which operates five Blue Cross and Blue Shield Plans in the Midwest and Southwest (Illinois, Oklahoma, Texas, Montana, and New Mexico). License includes Anthem Blue Cross & Blue Shield of Uruguay.

The association has its headquarters in the Michigan Plaza complex in the Chicago Loop area of Chicago, Illinois.^[14]

Member companies

Publicly traded companies Anthem Inc Anthem BlueCross and BlueShield[15] Colorado Connecticut Indiana Kentucky Maine Missouri Nevada New Hampshire Ohio Parts of Virginia[16] Wisconsin Anthem Blue Cross (California)[15] Blue Cross Blue Shield of Georgia[15] Empire BlueCross BlueShield (New York)[15] Triple-S Management Corporation (BlueCross & BlueShield Puerto Rico) Multi-state private companies CareFirst District of Columbia Maryland Parts of Virginia Health Care Service Corporation BlueCross BlueShield of Illinois BlueShield of New Mexico Blue Cross Blue Shield of Montana BlueCross BlueShield of Oklahoma BlueCross BlueShield of Texas Highmark Highmark BlueCross BlueShield (Western Pennsylvania) Highmark BlueShield (Northeastern, Eastern & Central Pennsylvania) Highmark BlueCross Blue Shield Delaware (Delaware) Highmark BlueCross BlueShield West Virginia (formerly Mountain State Blue Cross Blue Shield) (West Virginia) Premera Premera BlueCross BlueShield of Alaska Premera BlueCross (Washington) Cambia Health Solutions Regence BlueShield of Idaho Regence Blue Cross Blue Shield of Oregon Regence BlueCross BlueShield of Utah Regence BlueShield (Washington) Wellmark Blue Cross Blue Shield Iowa South Dakota

Single-state or regional companies Blue Cross and Blue Shield of Alabama BlueCross BlueShield of Arizona Arkansas BlueCross BlueShield Blue Shield of California BlueCross BlueShield of Florida (branded as Florida Blue)[17] Hawaii Medical Service Association BlueCross of Idaho BlueCross BlueShield of Kansas BlueCross BlueShield of Louisiana Blue Cross Blue Shield of Massachusetts Blue Cross Blue Shield of Michigan Blue Cross Blue Shield of Minnesota Blue Cross Blue Shield of Mississippi Blue Cross and Blue Shield of Kansas City Blue Cross Blue Shield of Nebraska Horizon Blue Cross Blue Shield of New Jersey Excellus BlueCross BlueShield (Central New York, Rochester and Utica/Watertown) BlueShield of Northeastern New York (A division of HealthNow New York Inc.) BlueCross BlueShield of Western New York (A division of HealthNow New York Inc.) Blue Cross Blue Shield of North Carolina Blue Cross Blue Shield of North Dakota Blue Cross of Northeastern Pennsylvania Capital Blue Cross (Central Pennsylvania) Independence Blue Cross (Philadelphia, Southeastern Pennsylvania) Blue Cross Blue Shield of Rhode Island Blue Cross Blue Shield of South Carolina BlueCross BlueShield of Tennessee BlueCross BlueShield of the U.S. Virgin Islands BlueCross BlueShield of Vermont BlueCross BlueShield of Wyoming Companies outside of the United States BlueCross BlueShield of Costa Rica BlueCross BlueShield of Panama BlueCross BlueShield of Uruguay

Details on specific organizations

Idaho

BlueCross of Idaho and Regence^[18] BlueShield of Idaho are separate companies and compete head to head throughout the state.

Pennsylvania

Though historically "Blue Cross" was used for hospital coverage while "Blue Shield" was used for medical coverage, today that split only exists for traditional health insurance plans in eastern Pennsylvania, where Independence Blue Cross (Philadelphia) and Blue Cross of Northeastern Pennsylvania each have joint marketing agreements with Highmark Blue Shield (Pittsburgh) for their separate hospital and medical plans. However, Independence Blue Cross, like most of its sister Blue Cross-Blue Shield companies, cover most of their customers under managed care plans such as HMOs and PPOs which provide hospital and medical care in one policy.

Criticism and controversy

The Seattle Times published an article on February 9, 2012, alleging non-profit insurance organizations, including Premera Blue Cross, Regence BlueShield, and Group Health Cooperative, were stockpiling billions of dollars in reserves while increasing their rates at the same time.^[19] Insurance companies do have statutory reserve requirements set by the states in which they operate, but The Seattle Times article cites Washington state insurance Commissioner Mike Kreidler arguing that these companies have in excess of $1 billion more than needed to cover claims and disaster contingencies.

See also

• Blue Cross Canada
• For-profit corporation

References

1. BCBSA (n.d.). "Scott P. Serota. President and Chief Executive Office". BCBS.
2. "Blue Cross Blue Shield Association - Supporting the 36 Independent, Locally Operated Blue Cross and Blue Shield Companies - BCBS.com". bcbs.com.
3. "Blue Cross Blue Shield Association - Supporting the 36 Independent, Locally Operated Blue Cross and Blue Shield Companies - BCBS.com". bcbs.com.
4. Coordinated Issue Paper – Blue Cross Blue Shield/Health Insurance; Life Insurance: Conversion of nonprofit corporations. 4 June 2008) Archived May 6, 2009, at the Wayback Machine.
5. Justin Ford Kimball from the Handbook of Texas Online. Retrieved August 31, 2009.
6. Marc Lichtenstein (n.d.). "Health Insurance From Invention to Innovation: A History of the Blue Cross and Blue Shield Companies". Blue Cross and Blue Shield Association.
7. "History of Blue Cross and Blue Shield Association – 1980s". Blue Cross and Blue Shield Association. Archived from the original on September 26, 2009.
8. "Nonprofit Health Inc.: Overview of issues in the protection of nonprofit assets - Blue Cross: 501(m)". Consumers Union. 1 January 2008. Retrieved 18 December 2014. As of January 1, 1987, the federal government removed the full tax-exempt status of BCBS plans and instead created a special tax class for BCBS organizations, Internal Revenue Code ("I.R.C.") 5833. That I.R.C. category subjected BCBS plans to federal taxation but recognized the unique role BCBS plans play, unlike commercial for-profit insurers, and entitled it to special tax benefits.
9. 26 USC § 833 – Treatment of Blue Cross and Blue Shield organizations, etc. | Title 26 – Internal Revenue Code | U.S. Code | LII / Legal Information Institute law.cornell.edu. Retrieved on 2013-09-05.
10. "Blue Cross parent boosts profit in second quarter". Crain's Chicago Business. Crain Communication, Inc. 3 September 2013. Retrieved 18 December 2014.
11. Robert Pear (14 December 2014). New York Times "In Final Spending Bill, Salty Food and Belching Cows Are Winners" Check |url= value (help). NY times. Retrieved 18 December 2014.
12. Health Insurance Facts | Smarter Consumers of Healthcare. Health Harbor. Retrieved on 2013-09-05.
13. "Insurance Programs". United States Office of Personal Management.
14. "Contact Us." Blue Cross and Blue Shield Association. Retrieved on December 23, 2009.
15. "Contact Us". anthem.com. Retrieved 10 February 2015.
16. "Anthem Health Insurance, Medicare, and Group Health Plans". anthem.com. Very bottom of page. Retrieved 10 February 2015.
17. "Florida Blue – New Name of BlueCross and BlueShield of Florida" (Press release). PRNewswire. April 2, 2012. Retrieved April 27, 2012.
18. The Regence Group
19. Ostrom, Carol M. (February 8, 2012). "3 Big Health Insurers Stockpile $2.4 Billion as Rates Keep Rising". The Seattle Times.

Further reading

• Goodman, John C. (2008). "Health Insurance". In David R. Henderson (ed.). Concise Encyclopedia of Economics (2nd ed.). Indianapolis: Library of Economics and Liberty. ISBN 978-0865976658. OCLC 237794267.

External links

• Blue Cross Blue Shield of California official website
• Blue Cross Blue Shield Of Texas
• Voices of Oklahoma interview with Blue Cross Blue Shield. First person interview conducted on February 26, 2013 with Ron King and Ralph Rhodes. Original audio and transcript archived with Voices of Oklahoma oral history project.