Out of the Blue
When you think of the 1920s, flappers and Prohibition probably come to mind. But another important thing happened then. People started going to hospitals more often because medical care got better. That made the price go up. When an administrator at Baylor University in Texas noticed teachers couldn’t afford their hospital bills, he came up with a plan.
More than 1,000 teachers paid $6 a year to get 21 days of hospital care. In 1934, the plan got a name and a logo: Blue Cross. A similar plan started for doctors’ services in the lumber and mining camps out west. It became known as Blue Shield.
Few commercial companies offered health insurance then. They were afraid they wouldn’t make enough money. Just like now, Blue Cross and Blue Shield put people before profits.
The beginning of Blue Cross in Michigan
These affordable, prepaid insurance plans quickly became popular around the country. They came to Michigan starting in 1938, when the Michigan Society for Group Hospitalization formed. A plan for doctors’ services was also in the works. It would be called the Michigan Medical Service.
The two worked together in 1939 on bills to regulate prepaid health care plans and make them nonprofit, like community-based hospitals. In the Detroit Times, Governor Luren Dickinson said, "I signed these bills with much satisfaction because they form the foundation of a new service which will afford to families of moderate income the assurance of adequate medical attention and hospitalization."
By 1940, the Michigan Medical Service was open for business. The Michigan Society for Group Hospitalization already had more than 175,000 customers from 350 employers. Not long after, the Society and the Service changed their names. These might sound more familiar: Michigan Blue Cross and Michigan Blue Shield.
Over the next two decades, Michigan Blue Cross and Michigan Blue Shield made health insurance accessible to more and more people, like individuals and older adults without group coverage. In 1966, the U.S. turned to Michigan Blue Cross and Michigan Blue Shield to administer Medicare in the state.
Michigan Blue Cross and Michigan Blue Shield became more accessible to customers too. When we finally merged to become Blue Cross Blue Shield of Michigan in 1975, we changed our board of directors so that customers made up the majority of the board. It’s still that way today.
In 1978, at the request of state officials, we purchased a struggling health maintenance organization (HMO). By the 1990s, Blue Care Network was:
- The largest HMO in the state
- The first HMO in Michigan and the U.S. to earn accreditation from the National Committee for Quality Assurance
- Recognized as one of America’s top HMOs
In the late 1990s and 2000s, we set new standards for programs that carry out our mission. They have made our members and Michigan communities healthier, improved the quality of health care and lowered health care costs for everyone. Here are some examples.
Blue today and tomorrow
We started this decade with a big change. In 2011, 3,000 employees relocated from our Southfield location to downtown Detroit’s GM Renaissance Center. We’ve been gearing up for more change: health care reform.
In 2014, we became a nonprofit mutual company. Our members have a stronger voice now. We believe this will help guide us toward a healthier future for our state.
As you can tell from our history, addressing the changing needs of health care is nothing new. Neither is our commitment to our members and Michigan.