Blue Cross and Blue Shield is the oldest payer group in the U.S., consisting of 36 independent, locally operated franchises that collectively make up the Blue Cross Blue Shield Association.
Here are 25 things to know about BCBS.
1. Blue Cross was founded in 1929 as a way to provide prepaid hospital care. A decade later, Blue Shield was founded to provide reimbursement for physician services. The Blue Cross Association and National Association of Blue Shield Plans merged in 1982 to form the Blue Cross and Blue Shield Association.
2. Scott Serota leads BCBSA as president and CEO. He has held this position since 2000, following time spent as COO, senior executive and executive vice president for system development. He previously served as president and CEO of Chicago-based Rush Prudential Health Plans, which was sold to WellPoint Health Networks in 2000.
3. The BCBS system offers a full spectrum of healthcare coverage, including coverage for large employer groups, small businesses and individuals, as well as Medicaid and Medicare plans.
4. Nearly one in three Americans — about 107 million — are BCBS beneficiaries. BCBS companies also hold the largest privately underwritten health insurance contract in the world through the Federal Employee Program, or the Federal Employees Health Benefits Program, which insures more than half — 5.3 million — of federal government employees, dependents and retirees, according to the payer. BCBS provides 52 million Medicaid and 42 million Medicare beneficiaries with healthcare coverage as well.
5. BCBS companies operate in every U.S. state, the District of Columbia and Puerto Rico.
6. The Blues are entirely independent and license one or both of Blue Cross and Blue Shield's brands to operate in distinct markets across the country. Of the 36 BCBS companies, the largest is the publicly-traded Anthem, which stretches across 14 states, and includes: Rocky Mountain Hospital and Medical Service (Colorado and Nevada), Anthem Health Plans (Connecticut), BCBS of Georgia, BCBS Healthcare Plan of Georgia, Anthem Insurance Companies (Indiana), Anthem Health Plans of Kentucky, Anthem Health Plans of Maine, RightCHOICE Managed Care (Missouri), Healthy Alliance Life Insurance Co. (Missouri), HMO Missouri, Anthem Health Plans of New Hampshire, Community Insurance Co. (Ohio), Anthem Health Plans of Virginia and BCBS of Wisconsin.
Health Care Service Corp., CareFirst, The Regence Group and Highmark also serve multiple states. Health Care Service Corp. operates the following plans: BCBS of Illinois, BCBS of Montana, BCBS of New Mexico, BCBS of Oklahoma and BCBS of Texas. CareFirst includes CareFirst of Maryland and Group Hospitalization and Medical Services, with affiliates CareFirst BlueChoice and FirstCare. The Regence Group includes Regence BlueShield of Idaho, Regence BCBS of Oregon, Regence BCBS of Utah and Regence BlueShield (Washington). Highmark includes Highmark BCBS (Pennsylvania), Highmark Blue Shield (Pennsylvania), Highmark BCBS West Virginia and Highmark BCBS Delaware.
Finances
7. Chicago-based Health Care Service Corp., a BCBS licensee and the largest customer-owned health insurer in the country, reported a net loss of $65.9 million in 2015 compared to a loss of $281.9 million in 2014. The health insurer narrowed the losses from the financial hit it took on the ACA exchanges a few years ago.
8. In February 2016, HCSC laid off an undisclosed amount of employees after it posted $176.1 million in losses for the first three quarters of 2015, citing increased costs associated with paying for less healthy customers under the ACA.
9. Then later in September, HCSC notified employees it planned to lay off 70 percent of its IT infrastructure staff and outsource system maintenance jobs to a foreign country. The cuts could have affected about 540 employees. The company offered early buyouts to employees older than age 50 prior to the announcement.
10. In the third quarter of 2016, Anthem reported a 7.5 percent increase in revenue from the same period in 2015 to a total of $21.4 billion. The insurer saw a 5.7 percent year-over-year drop in net income to $617.8 million. Through the first three quarters of 2016, Anthem reported net income of $2.1 billion.
11. Many health insurers, including BCBS plans, were approved double-digit rate increases for individual plans sold on 2017 ACA exchanges. BCBS of New Mexico and BCBS of Oklahoma were approved some of the highest increases for individual plans, averaging 91.8 percent and 76 percent, respectively. Blue plans in Illinois, Montana and Tennessee were approved average rate hikes of more than 50 percent for individual plans on the public exchanges, and Blues in Alabama and Delaware increased individual coverage rates by more than 30 percent this year for on-exchange plans.
Value-based programs
BCBS spokesperson Eric Lail confirmed these are the most recent figures available.
12. The Blues collectively boosted value-based care spending to $71 billion in 2014, reflecting a 9 percent increase in claims tied to value-based programs since 2013.
13. Patient-centered BCBS programs generated $1 billion in savings in 2013, according to BCBSA. The portfolio includes ACOs, patient-centered medical homes and other programs for a total of 570 patient-centered care programs for more than 25 million customers and 228,000 physicians.
14. BCBS has launched 450 ACOs across 32 states with more than 111,000 physicians.
15. The Blues host 69 PCMHs in 43 states and Washington, D.C. More than 56,000 physicians participate in the payer's PCMH models.
The Anthem-Cigna antitrust lawsuit
16. On July 24, 2015, Anthem entered into a definitive agreement to acquire rival Bloomfield, Conn.-based health insurer Cigna in a cash and stock transaction valued at $54.2 billion.
17. Nearly a year later, the U.S. Department of Justice and attorneys general from several states filed lawsuits against Anthem and Cigna out of concern their proposed transaction would impede health insurance competition in certain markets. Specifically, the DOJ argued competition between insurers like Anthem and Cigna ensures employers and individuals can purchase high-quality policies at affordable prices. However, the DOJ argued"competition is now at risk," as the payers are competitors in 35 markets, and represent the only competitive insurers in some markets.
18. Anthem had argued its acquisition of Cigna would allow the resulting entity to lower healthcare provider payments and allocate those savings to employers.
19. The antitrust trial began Nov. 21, 2016, in Washington D.C., with U.S. District Judge Amy Berman Jackson overseeing proceedings. Throughout the trial, relations between the two payers were questioned, as both accused each other in September of breaching their merger agreement. Anthem officials also attempted to push the deal forward unilaterally, as Cigna stopped working with Anthem on issues related to the proposed deal.
20. In mid-January, Anthem extended the completion deadline of its proposed acquisition of Cigna from Jan. 31 to April 30. Shortly after the deadline was extended, it was reported Judge Jackson is expected to block the deal.
21. If the deal does not close, Anthem owes Cigna a $1.85 billion breakup fee under the insurers' merger agreement.
Rankings, contract disputes and other recent news
22. According to athenahealth's annual PayerView report, the Blues have the strongest presence in the Top 10 Performers, with Capital Blue Cross Pennsylvania, Anthem BCBS in Maine, BCBS of North Carolina Blue Medicare, BCBS of Massachusetts and CareFirst BCBS holding five of the top 10 spots among health plans. Payers were ranked based on metrics such as days in accounts receivable, claim resolution rate, denial rate and more.
23. BCBS plans were rated No.1 overall for member satisfaction for the East South Central region (Alabama, Kentucky, Louisiana, Mississippi and Tennessee), the Heartland region (Arkansas, Iowa, Kansas, Missouri, Nebraska and Oklahoma), the New England region (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont) and the Illinois-Indiana and Texas regions, according to the annual J.D. Power Member Health Plan Study. The study is based on consumer responses in six categories: coverage and benefits, provider choice, information and communication, claims processing, cost and customer service.
24. Richardson-based BCBS of Texas and Arlington-based Texas Health Resources disputed over their contract and prepared to go out of network as their Dec. 31, 2016, deadline approached. At the center of the impasse was THR's request for a 5 percent reimbursement increase. BCBS refused, purporting the increase would add up to $57 million a year and members would ultimately bear the burden. BCBS of Texas and THR eventually renewed a contract Dec. 29, keeping 150,000 policyholders from going out of network with the provider.
25. At the beginning of January 2016, Chapel Hill-based BCBS of North Carolina was under fire for technical problems that resulted in approximately 25,000 customers — or 7 percent of all individual customers — across the state accidentally being placed in the wrong plans. Some company executives dubbed the billing and enrollment errors the most serious system failure in recent decades. In September 2016, the North Carolina Department of Insurance issued a $3.6 million fine against BCBS of North Carolina for the chronic IT malfunctions.
Blue Cross plans, state by state
- Alabama: Blue Cross and Blue Shield of Alabama
- Alaska: Premera Blue Cross and Blue Shield of Alaska
- Arizona: Blue Cross Blue Shield of Arizona
- Arkansas: Arkansas Blue Cross and Blue Shield
- California: Anthem Blue Cross; Blue Shield of California
- Colorado: Anthem Blue Cross and Blue Shield
- Connecticut: Anthem Blue Cross and Blue Shield
- Delaware: Highmark Blue Cross Blue Shield
- District of Columbia: BlueCross BlueShield
- Florida: Florida Blue
- Georgia: Blue Cross Blue Shield of Georgia
- Hawaii: Blue Cross and Blue Shield of Hawaii
- Idaho: Blue Cross of Idaho; Regence BlueShield of Idaho
- Illinois: Blue Cross and Blue Shield of Illinois
- Indiana: Anthem Blue Cross and Blue Shield
- Iowa: Wellmark Blue Cross and Blue Shield
- Kansas: Blue Cross and Blue Shield of Kansas
- Kentucky: Anthem Blue Cross and Blue Shield
- Louisiana: Blue Cross and Blue Shield of Louisiana
- Maine: Anthem Blue Cross and Blue Shield
- Maryland: CareFirst BlueCross BlueShield
- Massachusetts: Blue Cross and Blue Shield of Massachusetts
- Michigan: Blue Cross Blue Shield of Michigan
- Minnesota: Blue Cross and Blue Shield of Minnesota
- Mississippi: Blue Cross & Blue Shield of Mississippi
- Missouri: Anthem Blue Cross and Blue Shield; Blue Cross and Blue Shield of Kansas City
- Montana: Blue Cross and Blue Shield of Montana
- Nebraska: Blue Cross and Blue Shield of Nebraska
- Nevada: Anthem Blue Cross and Blue Shield
- New Hampshire: Anthem Blue Cross and Blue Shield
- New Jersey: Horizon Blue Cross and Blue Shield of New Jersey
- New Mexico: Blue Cross and Blue Shield of New Mexico
- New York: Empire Blue Cross Blue Shield; BlueCross BlueShield of Western New York; BlueShield of Northeastern New York; Excellus BlueCross BlueShield
- North Carolina: Blue Cross and Blue Shield of North Carolina
- North Dakota: Blue Cross Blue Shield of North Dakota
- Ohio: Anthem Blue Cross and Blue Shield
- Oklahoma: Blue Cross and Blue Shield of Oklahoma
- Oregon: Regence BlueCross BlueShield
- Pennsylvania: Capital BlueCross; Highmark Blue Shield; Highmark Blue Cross Blue Shield; Independence Blue Cross
- Puerto Rico: BlueCross BlueShield of Puerto Rico
- Rhode Island: Blue Cross & Blue Shield of Rhode Island
- South Carolina: Blue Cross and Blue Shield of South Carolina
- South Dakota: Wellmark Blue Cross and Blue Shield
- Tennessee: BlueCross BlueShield of Tennessee
- Texas: Blue Cross and Blue Shield of Texas
- Utah: Regence BlueCross BlueShield
- Vermont: Blue Cross and Blue Shield of Vermont
- Virginia: Anthem Blue Cross and Blue Shield; CareFirst BlueCross BlueShield
- Washington: Premera Blue Cross; Regence BlueShield
- West Virginia: Highmark Blue Cross Blue Shield
- Wisconsin: Anthem Blue Cross and Blue Shield
- Wyoming: Blue Cross Blue Shield of Wyoming