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For-Profit Conversions and Merger Trends Among Blue Cross Blue Shield Health Plans

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Publication Date: January 2004

Publisher(s): Center for Studying Health System Change

Author(s): Joy M. Grossman; Bradley C. Strunk

Series: Issue Brief No. 76

Topic: Health (Health care financing)

Type: Brief

Abstract:

Blue Cross and Blue Shield (BCBS) health plans, which insure nearly one in three Americans, historically have operated as local, nonprofit or mutual organizations. However, since the mid-1990s, BCBS plans increasingly have converted to for-profit companies and merged with Blue plans in other states. State insurance regulators, charged with weighing the costs and benefits of conversions and mergers to consumers, often wrestle with the legal complexities of these deals, according to Center for Studying Health System Change (HSC) site visits to 12 nationally representative communities. Although state regulatory scrutiny has slowed the pace of conversions recently, conversion activity is likely to accelerate again as the political and regulatory landscapes shift and plans adapt conversion strategies. The limited evidence available from HSC site visits and conversion proceedings suggests that conversions and mergers have had neither significant negative nor positive effects on consumers.