Blue Cross Blue Shield of Michigan (BCBSM) and Blue Cross Blue Shield of Vermont (BCBSVT) have closed their merger deal after securing the OK from regulators in the Green Mountain State.
The health plans agreed in May to join forces, and the Vermont Department of Financial Regulation’s approval was the last hurdle to closing the deal.
"We are pleased to partner with Blue Cross Blue Shield of Vermont to launch this pioneering approach to collaboration between nonprofit Blue companies," said Daniel Loepp, president and CEO of BCBSM, in a press release. "Our affiliation enables us to leverage our combined resources and expertise to improve the services we provide, while maintaining the local operations in each of our respective states that are key to delivering high-value, convenient and accessible care to our members.”
Officials at the plans said the partnership will allow the Vermont insurer to gain access to better technology and other innovations without losing its appeal as a local health insurance company.
Don George, president and CEO of BCBSVT, said in the press release that “this affiliation enables us, as a Vermont-based health plan, to continue serving the needs of Vermonters in the decades to come. Sharing expertise and technology with Blue Cross Blue Shield of Michigan, we will improve solutions for our members, customers, provider partners and communities here in Vermont.”
He also noted that for more than 40 years, BCBSVT has been a trusted, mission-driven not-for-profit organization.
The official approval order (PDF) states that during public comment about the deal, regulators received letters of concern about BCBSM being so much bigger than BCBSVT—that this wasn’t a merger of equals. BCBSM has about 4.5 million members (PDF), while BCBSVT has about 240,000, or about one-third of Vermont’s residents.
During public comments about the deal, George pointed out that large for-profit health plans with millions of members can make significant technological upgrades and added that some large Blues plans possess the same sort of leverage, including BCBSM.
“But alone, as Blue Cross of Vermont, with Vermont’s small population, we simply do not have the scalability, the number of members in order to make those investments,” George said.
Andrew Garland, BCBSVT’s vice president of client relations and external affairs, said during the public hearing that “claims, enrollment, billing, communications, care management support and engagement, none of that is disrupted by this work. Our members will continue to interact with us here in Vermont as they do today. When they call someone on the phone, they will be speaking to our team.”
The state regulators made that one of the bullet points in their approval, ordering that “BCBSVT’s benefits, coverage decisions, and other matters that affect the quality of care for BCBSVT subscribers; its local medical provider network; and other market facing matters which benefit from local knowledge and presence will remain locally managed.”
The order also states that BCBSVT has to file quarterly updates to the Vermont Department of Financial Regulation.
“The information included in such integration plan updates shall be confidential and exempt from public disclosure as provided by Vermont law,” the order said.