Answering Your Questions as We Pioneer a New Way for Blue Plans to Work Together
by Blues Perspectives
| 6 min read
Our plans are pioneering a new model for how nonprofit Blue plans can work together. This affiliation between two mission-driven organizations puts high-quality care first while sustaining the unique local character and commitments of each company.
As we work together to launch a new way for Blues Plans to work together, we recognize there will be questions from our members, customers, providers, and the community. By partnering, sharing resources, expertise and technology, we can bring best practices and innovative solutions to those we serve.
When was Blue Cross Blue Shield of Michigan founded?
Founded in 1939, BCBSM is the oldest and largest health insurer in Michigan. As a nonprofit mutual insurance company, Blue Cross is a diversified, multi-company enterprise of national scale. This includes companies providing Medicaid coverage, workers’ compensation, accident and disability and other forms of non-health insurance benefits, as well as administrative services supporting companies and providers in the growing Medicare Advantage market.
Where is Blue Cross Blue Shield of Michigan located?
BCBSM is headquartered in Detroit, MI with locations in core cities throughout the state, including Grand Rapids, Traverse City, Lansing, Marquette, Southfield and New Hudson.
Who does Blue Cross Blue Shield of Michigan serve (what types of business/members)?
BCBSM offers health insurance plans for every sector of the health insurance marketplace.
Where is Blue Cross Blue Shield of Michigan’s members located?
BCBSM is a single-state plan uniquely serving members in all 50 states. BCBSM members live in Michigan or are employees and retirees of Michigan-headquartered companies residing outside the state.
Partnership
What is an affiliate agreement?
Under the affiliation agreement, Blue Cross and Blue Shield of Vermont will become a subsidiary of Blue Cross Blue Shield of Michigan. Our model is distinct from traditional subsidiaries. We will be partnering in a way that is built on collaboration and retention of local governance and decision making. Unlike a merger, this new model of collaboration preserves strong, local and committed health plans in our respective states. Blue Cross VT headquarters will continue to be based in Berlin, Vermont with a Vermont-based workforce. Blue Cross VT will remain a nonprofit health plan operating under the same trusted brand Vermonters have relied on for decades. This approach to partnering leverages our combined scale to enable our two single state nonprofit Blue Plans to remain dedicated to our members.
Why are you pursuing an affiliation?
Our vision for the partnership is to bring together two like-minded nonprofit Blue Plans to deliver innovative and affordable products in the Vermont market, create a differentiated health care experience, and strengthen Blue Cross VT’s competitive position in a rapidly evolving and increasingly competitive landscape. This is particularly important as we find ourselves competing with well-funded, for-profit regional and national competitors, regional integrated delivery networks and the need to continue to invest in information technology.
How will the affiliation work?
Under the affiliation, Blue Cross and Blue Shield of Vermont becomes part of the Blue Cross Blue Shield of Michigan enterprise family of companies. The agreement, approved by the respective plans’ boards of directors, maintains a Vermont organization with governance, operational and policy decisions made locally. Blue Cross VT will continue under the same name, with the executive leadership team and workforce based in Berlin, VT as they are today. The majority of the re-configured, 12 member Vermont board of directors will be Blue Cross VT subscribers. There will be no changes to Blue Cross Blue Shield of Michigan’s existing headquarters, board of directors or leadership team. This is an affiliation, not an acquisition, which means there is no financial exchange between the organizations. As is the case today, premiums generated from each health plan will stay in the respective states and will wholly be used to pay claims, administer plan operations, and maintain reserves. Each organization will continue to operate financially as a single state plan. Both organizations will be meeting with state officials and regulators to advance final approval and satisfy other closing conditions.
Why is Blue Cross VT/BCBSM a good candidate for this partnership?
BCBSM is an industry leader in developing new technologies and innovative products that directly benefit customers and members. Members in Vermont can benefit from the technologies and expertise offered by BCBSM. Our two organizations also have a history of collaboration. As Blue Plans, we have long shared industry, process, and regulatory knowledge. We share a claims operating platform, several vendor relationships and have been working together to bring innovative solutions to our communities. We established a partnership to launch Vermont Blue Advantage products in 2021.
Will there be any impact to the nonprofit status of Blue Cross VT/BCBSM?
No. Both plans will continue as nonprofit health plans.
What will happen to the Blue Cross VT/BCBSM brand/company name?
There will be no change to any of the branding or naming of either company.
Will Blue Cross VT/BCBSM continue to invest in local communities in their states?
Yes. Both BCBSM and Blue Cross VT are deeply rooted in the local communities in our respective states. We fully expect that these community-based efforts will continue into the future.
Are you seeking other affiliation with other Blue Plans?
Our approach to affiliation and partnership is distinct. It reflects our companies’ shared beliefs that the best health care is delivered and administered locally – and it preserves the ability of local health plans to make decisions aligned to our local communities’ needs. This model preserves our community commitments in Michigan and Vermont. It preserves the Blue Cross VT brand and allows for the majority of its board to be comprised of Blue Cross VT subscribers. It also furthers opportunities to share resources and technology, increase scale and most importantly, promote access to affordable coverage for the people we serve. We are excited for the possibilities this model holds for the future. Our new model signals opportunities for other nonprofit Blue Plans to partner with us in new and unique ways.
Did the pandemic impact this decision?
No. While COVID-19 has unalterably changed the health care landscape, the strategic reasons for seeking this partnership are unrelated to the impact of the pandemic.
Members, Customers & Communities
How will this impact BCBSM members and group customers?
This affiliation will not have any impact on Michigan members or group customers. The services and products we offer today will not change because of this partnership. Blue Cross Blue Shield of Michigan and Blue Cross and Blue Shield of Vermont are already working together. As Blue Plans, we have long shared industry, process, and regulatory knowledge. We share a claims operating platform and have been working together to bring innovative solutions to our communities. This affiliation formalizes our partnership and offers an opportunity for BCBSM to extend many of the programs and services that have had such a positive impact on our Michigan members to the Vermont community.
How will this impact BCBSM members and group customers?
This affiliation will not have any impact on Michigan members or group customers. The services and products we offer today will not change because of this partnership. Blue Cross Blue Shield of Michigan and Blue Cross and Blue Shield of Vermont are already working together. As Blue Plans, we have long shared industry, process, and regulatory knowledge. We share a claims operating platform and have been working together to bring innovative solutions to our communities. This affiliation formalizes our partnership and offers an opportunity for BCBSM to extend many of the programs and services that have had such a positive impact on our Michigan members to the Vermont community.
How will this affiliation impact BCBSM employees?
The majority of BCBSM employees will not see any changes to their day-to-day activity. We expect some functions to be more integrated in the future to formalize collaboration and sharing of best practices across the organizations.
Will Michigan providers experience any changes with this partnership?
No. There will be no changes.
