Blue Cross and Blue Shield of Vermont aim to join Blue Cross Blue Shield of Michigan through a cashless exchange in an agreement the nonprofits say will improve care and reduce costs. fee.
Under the proposed deal, the Michigan insurer would acquire the Vermont corporate Blue Cross and Blue Shield licenses, said Lynda Rossi, executive vice president of strategy, innovation and public relations at Blue Cross Blue Shield of Michigan said. “You’re going to see further consolidation in the market,” Rossi said. “The model that we build together with the Vermont plan will be very attractive in the Blues system.”
Operationally, the deal is the same as an acquisition except that no funds have changed hands. The Michigan and Vermont operations will maintain separate headquarters, boards of directors, and workforces, along with their legal entities in the two states. The companies’ boards of directors approved the deal.
Rossi said the parties aim to finalize the deal by October 1. Together, the companies will have about 5.4 million members. Linking requires approval from Michigan and Vermont regulators.
In exchange for the license, Blue Cross and Blue Shield of Vermont intend to use the Michigan company’s technology and operations services to develop a smartphone app for members that will enable online bill payments. online and create digital wellness programs, among other things, said President and CEO Don George.
“There’s a lot that can be delivered through healthcare technology and it’s really evolving,” says George. “But it requires investment, and it requires expertise that is extremely expensive to do on a small and small scale. For us, it makes perfect sense.”
Blue Cross Blue Shield of Michigan has the largest market share in its home state and covers approximately 5.2 million individual members, Medicaid, Medicare and employers. The company controls 68% of Michigan’s commercial market and 49% of the Medicare Advantage market by 2021, according to the most recent American Medical Association report on health insurance competition.
Blue Cross and Blue Shield of Vermont is the state’s sole nonprofit service provider and has approximately 225,000 commercial and Medicare members. According to the AMA, the company holds 53% of the state’s commercial market share in 2021, excluding the insurer’s Medicare Advantage market share in its report. The company launched a joint-branded Medicare Advantage product with Blue Cross Blue Shield of Michigan in 2021 and used the company’s Michigan claims processing system.
Non-profit health insurers like these face stiff competition from major domestic players such as UnitedHealth Group, CVS Health and Humana, and some are looking to gain an edge through through partnerships.
Kaiser Permanente’s Kaiser Foundation Hospitals and Geisinger Health plan to partner through Risant Health, a new entity that integrates health systems announced Wednesday. In February, nonprofit insurers Health Alliance Plan and CareSource formed a joint venture to provide new Medicaid and exchange services in Michigan. SCAN Health Plan intends to acquire nonprofit provider CareOregon to form a $6.8 billion company called HealthRight Group, which will focus on government health programs , the company announced in December.
