Independence Blue Cross and Blue Cross Blue Shield of Michigan finalize arrangement to expand services to Medicaid beneficiaries nationally through AmeriHealth® Mercy

IBC holds majority of the Medicaid company; BCBSM gains minority interest

December 1, 2011

PHILADELPHIA — Two of the nation’s largest Blue health insurers, Independence Blue Cross and Blue Cross Blue Shield of Michigan, announced today they have closed their transaction and finalized their arrangement to expand services to Medicaid beneficiaries nationally through the AmeriHealth Mercy Family of Companies, a top-tier, best-in-class Medicaid managed care organization headquartered in Philadelphia.

“We’re excited to move forward in this progressive partnership with Blue Cross Blue Shield of Michigan to pioneer new health care solutions in the Medicaid market nationwide,” said Daniel J. Hilferty, IBC’s president and CEO. “Through this arrangement, AmeriHealth Mercy and its expert, experienced professionals are poised to provide industry-leading Medicaid managed care services to states, Blue plans, and others, and widen access to quality care in communities across America.”

Under the transaction, IBC receives majority interest in AmeriHealth Mercy, while BCBSM receives minority interest. Previously, IBC shared ownership of AmeriHealth Mercy with Mercy Health Plan, a subsidiary of Mercy Health System.

With premier operational and health care capabilities, AmeriHealth Mercy is one of the country’s largest Medicaid companies, serving almost 800,000 members in Medicaid managed care plans in three states. AmeriHealth Mercy also offers other services such as pharmacy benefits management, behavioral health care, and management of medical care to an additional 3.2 million Medicaid, Medicare, and SCHIP beneficiaries in 12 states. In addition, the company provides expertise in customer service, informatics, information systems, claims management, enrollment, and 24/7 nurse triage support.

“AmeriHealth Mercy is a highly regarded organization with an innovative approach to delivering Medicaid services on a national level,” said Daniel J. Loepp, president and CEO of Blue Cross Blue Shield of Michigan. “This strategic investment enables us to quickly gain expertise and bring that value to Medicaid consumers in Michigan.”

With the additional resources this transaction will bring from the two Blue health insurers, AmeriHealth Mercy is now better positioned to offer turnkey, cost-effective, comprehensive Medicaid managed care coverage and services to Medicaid consumers nationwide and to the increasingly, financially strapped state governments that provide Medicaid coverage. In 2014, the Patient Protection and Affordable Care Act expands Medicaid eligibility across the United States, and this change will increase the number of people covered by Medicaid to 16 million by 2019, according to the Kaiser Family Foundation.

The new arrangement between IBC and BCBSM also provides an opportunity for Blue health plans nationwide to expand into the Medicaid market today and to take advantage of the enormous growth expected in Medicaid over the next few years. The 39 independent Blue health insurance companies in the United States serve all 50 states and cover one in three Americans, but are not widely active in the Medicaid market. Two-thirds of Blue health plans do not currently serve Medicaid consumers.

Independence Blue Cross is a leading health insurer in Southeastern Pennsylvania. The not-for-profit company and its affiliates provide coverage to nearly 3.1 million people. For 73 years, Independence Blue Cross has offered high-quality health care coverage tailored to meet the changing needs of members, employers, and health care professionals. Independence Blue Cross is an independent licensee of the Blue Cross Blue Shield Association, an association of independent Blue Cross and Blue Shield plans.

Blue Cross Blue Shield of Michigan, a nonprofit corporation, provides and administers health care benefits to more than 4.3 million members residing in Michigan in addition to members of Michigan headquartered groups who reside outside the state. The company is committed to delivering affordable health care products tailored to lifestyles and specific health goals through a broad variety of plans for businesses, individuals, and seniors. Beyond health care coverage, the company provides impactful community initiatives and leadership in improving health care. It has fulfilled its unique nonprofit mission for more than 70 years. Blue Cross Blue Shield of Michigan is a nonprofit corporation and an independent licensee of the Blue Cross and Blue Shield Association.

©1996-2014 Blue Cross Blue Shield of Michigan and Blue Care Network are nonprofit corporations and independent licensees of the Blue Cross and Blue Shield Association. We provide health insurance in Michigan.

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