HELENA, Mont. – Insurance Commissioner Monica J. Lindeen approved on Thursday the acquisition of Montana’s Blue Cross Blue Shield by Illinois-based Health Care Services Corporation after both insurance companies agreed to a long list of requirements – including that HCSC maintain its 450-person Montana workforce, create 100 new jobs in Montana, and keep its administrative costs below Blue Cross Blue Shield’s levels.
Lindeen’s office had been working on the requirements for months. Lindeen said she was initially skeptical of the acquisition. However, after negotiating with both companies and extracting guarantees that HCSC will keep its overhead low, not lay off any of its Montana workforce, and hire an additional 100 Montanans, Lindeen said she thought HCSC would be a better deal to Montanans than a standalone Blue Cross Blue Shield. Blue Cross Blue Shield had steep underwriting losses for several years and would need to increase premiums much faster and outsource jobs if the acquisition did not go through.
“We worked hard to make sure Montanans weren’t left out of this deal” said Lindeen Thursday.“To do nothing would have been worse for the state.”
Among other things, Lindeen also required HCSC to operate a free, mobile childhood immunization van for underserved parts of the state. A survey released last year ranked Montana 50th in the nation for immunization rates for children ages 19 to 35 months old.
Blue Cross Blue Shield is a nonprofit health service corporation under Montana law. In 2012, Health Care Service Corporation (HCSC) sought to buy Blue Cross. Because HCSC is not a nonprofit under Montana law, the proposed acquisition triggered a Montana law that requires the approval of the state’s attorney general and insurance commissioner before it can proceed. Under the law, all of Blue Cross Blue Shield’s current assets, including its financial reserves, and the purchase price paid by HCSC must be used to fund an independent foundation to promote public health.