Exploring the History of the Blue Cross Blue Shield Association

What is BCBSA?

The Blue Cross Blue Shield Association (BCBSA) is a national association of 34 independent, locally operated Blue Cross Blue Shield companies. The Association owns and manages Blue Cross and Blue Shield trademarked plans in over 170 countries and grants licenses to independent companies to use the names in exclusive geographic areas.

BCBSA companies provide health insurance to over 115 million people in the United States. More than 15 Blue Cross Blue Shield plans placed in the top 50 largest health insurance companies of 2023, according to Forbes.

Blue Cross and Blue Shield began as two separate companies.

Blue Cross was founded in 1929 by Justin Ford Kimball, vice president of Baylor University’s healthcare facilities. The nonprofit plan provided hospital coverage for Dallas public school teachers, offering them 21 days of hospital care for $6 per year.

After its success, the plan expanded and started enrolling employees in other professions across the city. Blue Cross became the Blue Cross Association in 1960.

Blue Shield began in 1939 and covered physician services. The company was developed by lumber and mining camp employers in the Pacific Northwest facing illnesses and occupational hazards. The employers organized plans to provide essential medical services through individual practitioners or physician groups for a monthly fee.

In 1948, nine plans adopted the Blue Shield symbol, which was later renamed the National Association of Blue Shield Plans.

Congress created the Federal Employee Health Benefits Program (FEHBP) in 1959, which would grow to be the largest employer-sponsored group health insurance program in the world, providing coverage to over 9 million federal employees, retirees, and family members. Under the FEHBP, employees could enroll in Blue Cross or Blue Shield health plans.

Similarly, in the 1960s, the federal government selected Blue Cross and Blue Shield companies to administer Medicare plans.

The two companies consolidated staff and operations in 1978 and merged to form the Blue Cross Blue Shield Association in 1982.

BCBSA’s position in the industry

Blue Cross Blue Shield companies offer commercial, Medicare Advantage, Medicaid managed care, Medigap, Medicare Part D, and individual exchange plans.

According to a 2022 fact sheet, the payer covers 11.9 million people through Medicaid programs, 4.3 million through Medicare Advantage, 6.9 million on the individual market, and 6.9 million through small business employers. BCBS plans and its affiliates accounted for 14 percent of Medicare Advantage enrollment in 2023, according to KFF.

BCBSA plans are also committed to moving away from fee-for-service models, with over 67 million members having access to value-based care from more than 580,000 providers as of 2022, the fact sheet shared.

Since the COVID-19 pandemic hit, BCBSA has invested more than $12.8 billion in COVID-19 initiatives and contributed more than $315 million to community-based nonprofit organizations to address social issues exacerbated by the pandemic, according to the 2022 data from the organization. In addition, the payer has helped vaccinate more than 2 million seniors in 100 days through its Vaccine Community Connectors Program.

The payer’s National Health Equity Strategy prioritizes data collection to measure disparities, collaborations with providers to improve outcomes, address unconscious bias, and address maternal health disparities in local communities.

Notable BCBSA companies

Some BCBSA-affiliated companies go by different names, so it is not always obvious which plans have ties to the organization.

Elevance Health

Elevance Health, formerly known as Anthem, is the largest for-profit managed healthcare company in BCBSA. The payer offers health plans under the Anthem Blue Cross and Blue Shield brand in 14 states: Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri, Nevada, New Hampshire, Ohio, Virginia, Wisconsin, California, and New York.

Additionally, Elevance announced plans to acquire Blue Cross and Blue Shield of Louisiana in January 2023.

Between December 2021 and December 2022, enrollment in Elevance plans grew by 2.2 million, or 4.8 percent, to 47.5 million people. The company’s 2022 net revenue reached $156 billion.

Highmark

Highmark Inc. is the fourth-largest Blue Cross and Blue Shield-affiliated organization in the country. The company and its affiliates operate plans in Pennsylvania, Delaware, New York, and West Virginia, serving more than 4.4 million members.

For example, Highmark Blue Cross Blue Shield serves around 2.5 million members and employs nearly 4,000 people in western, north central, and northeastern Pennsylvania. Meanwhile, Highmark Blue Shield serves 1.2 million people and employs 3,500 staff members in central Pennsylvania and the Lehigh Valley.

Highmark’s year-end 2022 consolidated revenues were $26 billion.

CareFirst

CareFirst BlueCross BlueShield offers individual health plans for medical, dental, and vision insurance in Maryland, Washington, DC, and Northern Virginia. The nonprofit organization serves 3.5 million members.

Health Care Service Corporation                 

Health Care Service Corporation (HCSC) is the largest member-owned insurer in the country. The company is the licensee of BCBSA for five states: Illinois, Montana, New Mexico, Oklahoma, and Texas. HCSC serves more than 17 million members across these states, offering commercial, Medicare, and Medicaid plans.

The payer also has a network of affiliates and subsidiaries that provide dental, health technology, and pharmacy solutions.