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Is Blue Cross Blue Shield health insurance the same everywhere?

Keep in mind...
  • Blue Cross was established in 1929
  • Blue Cross Blue Shield is comprised of 39 individual health insurance entities
  • Each entity functions as a franchise

Although Blue Cross Blue Shield (BCBS) is a household name in health insurance, it is not necessarily the same all across the country.

That’s because Blue Cross Blue Shield is not a single company in the same vein as United Health Care or Humana. Rather, it is an association of member companies spread throughout the country.

The Blue Cross Blue Shield name legally belongs to the Blue Cross Blue Shield Association (BCBSA) headquartered in Chicago, Illinois. It is an association made up of 39 individual health insurance entities in America.

Each entity is almost like a franchise of sorts, operating independently as long as each one stays within certain parameters required to use the association’s name. All combined the 39 insurance entities cover more than 100 million subscribers.

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History of Blue Cross Blue Shield

adobestock_101522098-1600x1600The history of Blue Cross Blue Shield dates back to the early 1900s when both were established as completely separate companies. Blue Cross was first, being established in 1929.

It was the brainchild of Baylor University’s Justin Kimball, who wanted to provide hospitalization insurance for the university’s employees. His company’s first policy provided three weeks of hospitalization at the cost of $6 annually.

Kimball’s plan proved so successful that he extended it to other employers in the greater Dallas area and then eventually the rest of the country.

In 1939, Blue Cross received an endorsement of sorts from the American Hospital Association when they agreed to use the Blue Cross moniker as a seal of approval for health insurance plans that meant certain AMA criteria. That relationship eventually went sour, and the two organizations parted ways in the 1970s.

As for Blue Shield, it got its start in the mining and lumber industries. Companies operating camps in the Pacific Northwest wanted to offer group medical care to workers because their jobs were so dangerous.

The creators of Blue Shield came up with the idea of reducing health care costs by pooling the resources of a group of physicians and healthcare facilities.

By 1940, the idea began to catch on to the extent that Blue Shield became a nationwide organization.

In 1982, the two organizations merged to create the BCBS Association as a tax-exempt entity to benefit the collective health of Americans.

Since then the association has been through a number of legal reorganizations in an attendant to define its purpose in relation to its tax-exempt status.

As a final resolution to their tax problems, the association changed its bylaws in the early 1990s to allow member companies to be established on a for-profit basis.

Blue Cross Blue Shield Today

Today’s Blue cross Blue Shield is made up of both non-profit and for-profit entities. Some of them are single state entities; some are multi-state regional companies; some are privately owned; others are publicly traded.

Truth be known, there is no single business organizational method common to all of them. Therefore, the types of plans they offer, and the way they are administered, will vary from one organization to the next.

The only a binding factor is that all healthcare plans under the BCBS name must meet minimum standards. This is an important factor to note because you might experience two different types of HMO plans if you move from one organizational territory to another.

For example, an HMO plan you had through Blue Cross Blue Shield of Western New York might provide for a $500 deductible and $25 co-pays for routine doctor visits.

However, if you move out to Wyoming, the plan you receive from Blue Cross Blue Shield of Wyoming might have a slightly higher deductible and lower co-pays.

Universal Recognition

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Despite the differences in available health care plans and the legal organization of the individual entities, one of the main benefits of having Blue Cross Blue Shield is its nearly universal acceptance everywhere in America.

Hardly a hospital, clinic, or private practice exists that does not accept their insurance. Even if you require care outside of the region your particular Blue Cross Blue Shield covers, that won’t change the parameters of your plan, or how it’s administered.

Furthermore, that universal recognition gives Blue Cross Blue Shield a very loud voice when it comes to lobbying at both the state and federal levels.

Despite the fact the association is made up of 39 individual companies, it still represents 100 million individuals, many of whom are eligible to vote — that puts Blue Cross Blue Shield in the same league as larger insurance companies when it comes to making their voices heard.

Blue Cross Blue Shield Outside the United States

Blue Cross Blue Shield does have representation in Puerto Rico and Uruguay, as well as a partnership with Blue Cross Canada. How tightly the American Association regulates its relationship with these three entities is unclear.

At least in the case of the Canadian Blue Cross entity, it’s probably safe to assume their relationship is not as restrictive as the relationship between the association and its American entities.

Blue Cross Canada is likely free to operate in an entirely different manner because Canada’s health care system is so completely different.

If you’re a Blue Cross Blue Shield member, you can take comfort in knowing that you are part of one of the largest health care associations in the country.

Collectively the association has more than 80 years experience providing health insurance for its customers.

They have weathered all sorts of economic conditions through the years, as well as constantly changing state and federal regulations. Through it all, they had been one of the most consistent health insurance providers in the market.

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