What Is the Blue Cross?
Blue Cross Blue Shield Association (BCBSA) is an organization which offers medical insurance plans across the United States under the Blue Shield brand. The Blue Cross company amalgamated with Blue Shield in 1982 to form one association. The Blue Cross Blue Shield Association is an alliance of thirty-six separate medical insurance companies and organizations which provide insurance to over 109 million Americans. Blue Cross emerged in 1929, and was renamed the Blue Cross Association in 1960. Blue Shield was formed in 1939, and became the Blue Shield Association in 1948. The two health insurance associations merged in 1982. The BCSCA headquarters is located in Michigan-Plaza complex in Chicago, Illinois.
When was Blue Cross Formed?
The Blue Cross organization provides numerous medical insurance plans. Blue Cross was founded in 1929 by Justin Kimball, who was vce-president of Baylor University's medical facilities in Texas. The first health plan Kimball introduced guaranteed all teachers in Dallas 21 days of health care annually at the cost of $6, which was later extended to many other groups of employees in Texas, and eventually across the entire country. In 1939, the American-Hospital-Association (AHA) implemented the Blue Cross emblem as their symbol for the health plans which met certain standards. The Blue Cross organization superseded the American Hospital Association commission, but severed their ties with the AHA in 1972.
When was Blue Shield Formed?
The Blue Shield company was created in the Pacific Northwest by owners of lumber and mining camps who paid monthly fees to health service bureaus of physicians to provide medical care for their employees. In 1939 Blue Shield established its first official health plan in California. By 1948, nine plans existed, called the Medical Care Associated Plan, which later became the National Association of Blue Shield Plans.
When Did the Two Companies Merge?
The government of the United States partnered with Blue Shield and Blue Cross in the 1960s to help administer Medicare, and this eventually resulted in the merger of the two associations in 1982, creating the Blue Cross Blue Shield Association. Before 1986, all organizations associated with the BCBSA were given tax exemptions as a social welfare plan. However, this exemption was revoked by the Tax Reform Act of 1986, because the corporations also sold commercial-type plans and therefore became subject to federal taxes, but entitled to numerous special tax benefits. The association changed its licensees to include for-profit corporations in 1994, and this resulted in the parent company almost doubling its profits to $1.09 billion in 2010
BCBSA offers different types of health insurance coverage throughout the United States. The company also acts as the administrator of Medicare in numerous regions of the country, while providing health insurance to the all employees of state and federal government under the Federal Employees Health Benefits Program. Although Blue Shield previously focused on medical insurance and Blue Cross focused on hospital insurance, they merged under one umbrella, with the exception of Pennsylvania. Two separate firms operate in Pennsylvania: Independence Blue Cross in Philadelphia, and Highmark Blue Shield in Pittsburgh.
