Insurers invest a majority stake in Minneapolis-based Bloom Health to expand choice and flexibility of employers' and employees' insurance options
MINNEAPOLIS, Sept. 20, 2011 /PRNewswire/ -- Health Care Service Corporation (HCSC), WellPoint, Inc. (NYSE: WLP), and Blue Cross Blue Shield of Michigan (BCBSM) announced today a joint effort to offer a nationwide private exchange and defined contribution solution for employers to use in managing their health benefit offerings.
The three independent health insurers have invested equal stakes in Minneapolis-based Bloom Health, giving them majority ownership of the company. This is the first investment in Bloom by HCSC and WellPoint, while BCBSM is increasing its existing stake in the company. Each insurer will serve on Bloom Health's Board of Directors, with Bloom remaining a separate company.
Bloom Health, established in 2009, provides employers and employees greater flexibility, access and choice of health care services by simplifying how they select and pay for health insurance. Through its platform, Bloom Health helps employers define and better manage their health benefits spending through a defined contribution model. The employer contributes a defined amount per employee toward the cost of employee health care benefits. Employees and individuals are presented with a wide selection of benefit plans through an online "marketplace" to best fit their individual needs.
"Currently, rising health care costs are top of mind for organizations of all sizes," said Abir Sen, chief executive officer, Bloom Health. "Bloom Health is an important option that assists companies in responsibly managing the rising costs of health care, while at the same time making it simple, engaging and valuable to its employees."
"HCSC is committed to making health care more accessible and affordable to all consumers. Adding a private exchange to our strong portfolio of health benefit options is essential to providing a broad array of solutions to meet consumer needs in this evolving marketplace," said Marty Foster, executive vice president and president of plan operations, HCSC.
"We believe private exchanges will be an important solution as the rising costs of health care leave employers searching for more predictability in their health care spend," said Ken Goulet, executive vice president, and president and CEO of WellPoint's Commercial Business Unit. "The combined leadership, technological capabilities, brand reputation and market presence make this a natural strategic fit to providing our customer base with the best value and their employees with convenience and choice."
"By leveraging Bloom Health's consumer expertise and leading-edge technology, we can offer employers a way to better manage risk all while preserving choice for their employees," said Ken Dallafior, senior vice president of Group Business and Corporate Marketing, BCBSM. The company was the first to work with Bloom Health earlier this year to pilot a defined contribution health benefit solution to some Michigan employers during 2011, with an expanded rollout in 2012.
The Bloom solution will begin offering limited enrollment for groups renewing in 2012 and will be fully operational for all markets by 2013. For more information, visit www.gobloomhealth.com.
About Bloom Health
Bloom Health is a leader in the defined contribution health benefits marketplace, committed to assisting employers of all sizes move toward an employer-sponsored system that has effective cost predictability for employers and increased choice and personalization for employees. Bloom Health was founded in 2009 and is headquartered in Minneapolis. For more information, visit www.gobloomhealth.com.
About Health Care Service Corporation
Health Care Service Corporation is the country's largest customer-owned health insurer and fourth largest health insurer overall, with more than 13 million members in its Blue Cross and Blue Shield plans in Illinois, New Mexico, Oklahoma and Texas. A Mutual Legal Reserve Company, HCSC is an independent licensee of the Blue Cross and Blue Shield Association. HCSC has a rating of AA- (Very Strong) from Standard and Poor's, A1 (Good) from Moody's and A+ (Superior) from A.M. Best Company. For more information, please visit www.HCSC.com or follow us at www.twitter.com/HCSC.
About Blue Cross Blue Shield of Michigan
Blue Cross Blue Shield of Michigan, a nonprofit organization, provides and administers health benefits to more than 4.3 million members residing in Michigan, in addition to members of Michigan-headquartered groups who reside outside the state. Blue Cross Blue Shield of Michigan and Blue Care Network are nonprofit corporations and independent licensees of the Blue Cross and Blue Shield Association. For more company information, visit bcbsm.com.
About WellPoint, Inc.
WellPoint works to simplify the connection between Health, Care and Value. We help to improve the health of our members and our communities, and provide greater value to our customers and shareholders. WellPoint is the nation's largest health benefits company in terms of medical membership, with 34 million members in its affiliated health plans, and a total of more than 69 million individuals served through its subsidiaries. As an independent licensee of the Blue Cross and Blue Shield Association, WellPoint serves members as the Blue Cross licensee for California; the Blue Cross and Blue Shield licensee for Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri (excluding 30 counties in the Kansas City area), Nevada, New Hampshire, New York (as the Blue Cross Blue Shield licensee in 10 New York City metropolitan and surrounding counties and as the Blue Cross or Blue Cross Blue Shield licensee in selected upstate counties only), Ohio, Virginia (excluding the Northern Virginia suburbs of Washington, D.C.), and Wisconsin. In a majority of these service areas, WellPoint's plans do business as Anthem Blue Cross, Anthem Blue Cross and Blue Shield, Blue Cross and Blue Shield of Georgia, Empire Blue Cross Blue Shield, or Empire Blue Cross (in the New York service areas). WellPoint also serves customers throughout the country as UniCare. Additional information about WellPoint is available at http://www.wellpoint.com/.
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WellPoint and its representatives may from time to time make written and oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"), including statements in this press release, in presentations, in filings with the Securities and Exchange Commission, or SEC, in reports to shareholders and in meetings with analysts and investors. The projections referenced in this press release are forward-looking and they are intended to be covered by the safe harbor for "forward-looking statements" provided by PSLRA. Words such as "expect(s)", "feel(s)", "believe(s)", "will", "may", "anticipate(s)", "intend", "estimate", "project" and similar expressions are intended to identify forward-looking statements, which generally are not historical in nature. These statements include, but are not limited to, financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include: those discussed and identified in our public filings with the SEC; increased government participation in, or regulation or taxation of health benefits and managed care operations, including, but not limited to, the impact of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010; trends in health care costs and utilization rates; our ability to secure sufficient premium rates including regulatory approval for and implementation of such rates; our ability to contract with providers consistent with past practice; competitor pricing below market trends of increasing costs; reduced enrollment, as well as a negative change in our health care product mix; risks and uncertainties regarding Medicare and Medicaid programs, including those related to non-compliance with the complex regulations imposed thereon and funding risks with respect to revenue received from participation therein; a downgrade in our financial strength ratings; litigation and investigations targeted at health benefits companies and our ability to resolve litigation and investigations within estimates; our ability to repurchase shares of our common stock and pay dividends on our common stock due to the adequacy of our cash flow and earnings and other considerations; non-compliance with the Express Scripts, Inc. pharmacy benefit management services agreement, which could result in financial penalties and our inability to meet customer demands; events that result in negative publicity for us or the health benefits industry; failure to effectively maintain and modernize our information systems and ebusiness organization and to maintain good relationships with third party vendors for information system resources; events that may negatively affect our license with the Blue Cross and Blue Shield Association; possible impairment of the value of our intangible assets if future results do not adequately support goodwill and other intangible assets; intense competition to attract and retain employees; unauthorized disclosure of member sensitive or confidential information; changes in the economic and market conditions, as well as regulations that may negatively affect our investment portfolios and liquidity; possible restrictions in the payment of dividends by our subsidiaries and increases in required minimum levels of capital and the potential negative effect from our substantial amount of outstanding indebtedness; general risks associated with mergers and acquisitions; various laws and our governing documents may prevent or discourage takeovers and business combinations; future public health epidemics and catastrophes; and general economic downturns. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. Except to the extent otherwise required by federal securities law, we do not undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers are also urged to carefully review and consider the various disclosures in our SEC reports.
SOURCE WellPoint, Inc.