Creation of Blue Cross Blue Shield in 1929 - the Impact on Healthcare, Access, Technology, and Reimbursement
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Paul, MN, Washington, DC, and Cleveland were created soon afterwards. The Blue Cross emblem, first used by the St. Paul plan, was widely adopted by other prepaid hospital benefit plans adhering to American Hospital Association (AHA) guidelines.
Because Blue Cross plans are the largest health insurer in almost every state (or substate region where they operate), these conversions could remake the corporate landscape of health care finance. Although BC plans no longer hold the overwhelming market share they enjoyed 50 years ago (when they commanded more than two-thirds of the commercial market; see Blackstone and Fuhr 1998), their share still is considerable. Blue Cross controls at least half the individual market in 33 states and more than a third of the group market in 29 states (Chollet, Kirk, and Chow 2000; McCann 2003).
The commercial plans also benefited from a legal advantage: as non-profit entities, the Blues had to "community rate" their policyholders, while the for-profit commercial plans (strictly regulated insurance companies) were free to engage in experience rating
Blackstone EA, Fuhr JP. Blue Cross: Health Insurance. In: Rosenbaum DI, editor. Market Dominance. Westport, Conn: Praeger; 1998. pp. 175–93. [Google Scholar]
Chollet DJ, Kirk AM, Chow ME. Mapping State Health Insurance Markets. Washington, D.C.: AcademyHealth; 2000. [Google Scholar]