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Blue Cross Blue Shield Association

Blue Cross Blue Shield Association
Independent
Industry Health insurance
Founded 1929
Headquarters Michigan Plaza
Chicago, Illinois
Key people
Scott Serota (CEO)
Products PPOs, HMOs
Website www.bcbs.com
Health care in the United States
Government Health Programs

Private health coverage

Health care reform law

State level reform
Municipal health coverage


The Blue Cross Blue Shield Association (BCBSA) is a federation of 36 separate United States health insurance organizations and companies, providing health insurance to more than 106 million Americans. Blue Cross was founded in 1929, and became the Blue Cross Association in 1960, while Blue Shield emerged in 1939 and the Blue Shield Association was created in 1948. The two organizations merged in 1982.

Blue Cross and Blue Shield developed separately, with Blue Cross plans providing coverage for hospital services and Blue Shield covering physicians' services.

Blue Cross is a name used by an association of health insurance plans throughout the United States. Its predecessor was developed by Justin Ford Kimball in 1929, while he was vice president of Baylor University's health care facilities in Dallas, Texas. The first plan guaranteed teachers 21 days of hospital care for $6 a year, was later extended to other employee groups in Dallas, and then nationally. The American Hospital Association (AHA) adopted the Blue Cross symbol in 1939 as the emblem for plans meeting certain standards. In 1960, the AHA commission was superseded by the Blue Cross Association. Blue Cross severed its ties with the AHA in 1972.

Blue Shield was developed by employers in lumber and mining camps of the Pacific Northwest to provide medical care by paying monthly fees to medical service bureaus composed of groups of physicians. In 1939, the first official Blue Shield plan was founded in California. In 1948, the symbol was informally adopted by nine plans called the Associated Medical Care Plan, and was later renamed the National Association of Blue Shield Plans.

In the 1960s the US government chose to partner with Blue Cross and Blue Shield companies to administer Medicare.

In 1982, Blue Shield merged with The Blue Cross Association to form the Blue Cross and Blue Shield Association (BCBS).

Prior to 1986, organizations administering BCBS were tax exempt under 501(c)(4) as social welfare plans. However, the Tax Reform Act of 1986 revoked the exemption, because the plans sold commercial-type insurance. They became 501(m) organizations, subject to federal taxation, but entitled to "special tax benefits" under IRC 833.


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