Blue Cross Blue Shield of Michigan (BCBSM) covers Michigan residents from one great lake to another. The company is the state's leading health benefits organization, serving some 4.5 million members residing in the state or employed by companies headquartered there, and 1.3 million more members in other states. The not-for-profit company's insurance offerings include traditional indemnity, PPO, and POS plans, in addition to its Blue Care Network HMO plans. It also provides consumer-directed Flexible Blue plans paired with health savings accounts (HSAs), as well as options for individual buyers and Medicare beneficiaries. The organization is an independent licensee of the Blue Cross and Blue Shield Association.
Change in Company Type
In early 2014, BCBSM converted to a not-for-profit mutual insurance company through its merger with Blue Cross Blue Shield of Michigan Mutual Insurance Company. As part of the transition, the company will contribute $1.6 billion over a period of nearly 20 years to the independent Michigan Health Endowment.
BCBSM has the largest network of doctors and hospitals in Michigan: 158 hospitals and nearly 30,000 doctors.
Along with its traditional health coverage options, BCBSM provides prescription drug plans to seniors through Medicare Part D, as well as a range of other senior care programs including HMO, PPO, and gap plans. The company also offers Blue Dental and Blue Vision plans, and its BCN Service subsidiary provides third-party administration of self-funded employer health plans. Its LifeSecure unit provides long-term care insurance throughout most of the country. In addition, BCBSM partners with the State of Michigan to provide children's insurance through the MIChild program.
In addition to its ownership in Blue Care Network, the BCBSM Foundation, Accident Fund Holdings, and LifeSecure Insurance, BCBSM holds a minority stake in Pennsylvania-based managed care firm AmeriHealth Caritas and Minnesota-based Bloom Health (a developer of private exchange products for employers).
BCBSM operates across Michigan with its headquarters and major locations in Detroit, Blue Care Network's headquarters in Southfield, and other offices in Grand Rapids and Lansing.
Sales and Marketing
The mutual company markets its insurance products through more than 2,000 Blue Cross-contracted agents; it has a particular focus on companies in the auto manufacturing industry.
The company's revenues increased by 3% to $11 billion in fiscal 2013, due to growth in underwritten premiums earned, strong investment returns, and cost-management efforts. Net income also grew that year, rising 34% to $340 million. The growth was largely due to rising revenue as well as a decrease in expenses related to defined benefit pension plans.
Cash flow from operations fell 89% in 2013 to $57 million, primarily due to an increase in liabilities for unpaid claims and claims adjustment expenses.
Like most US health plans, BCBSM has combated the rise of health care costs with a combination of rate hikes, new product offerings that shift the burden of cost to members, and programs that encourage healthy lifestyles and the use of lower-cost alternatives such as generic drugs.
In a proactive approach to try to fight off losses and gain more members, the company is also constantly evaluating its products to try to find ways to customize them to plan members' needs. The company studies data on plan usage from employer organizations and creates new programs based on that data. Through its minority stake in the AmericGroup Mercy Family of Companies, it plans to extend its Medicaid operations. In 2014 BCBSM and the Blue Care Network created additional plan options and provider partnerships to meet customer demand in Medicare-eligible seniors and persons with disabilities. (Medicaid enrollment levels are expected to grow under new health reform laws.)
Also in 2014, the company partnered with Assurity Life Insurance and its LifeSecure Insurance unit to create a portfolio of individual supplemental insurance products. In 2015 BCBSM entered into an agreement to market Dearborn National Insurance group products alongside its own medical, dental, and vision offerings.
The not-for-profit health care organization was founded in 1939.