A public hearing will be held in the House Financial Services Committee on Wednesday, allowing Blue Cross and Blue Shield of Alabama to create a holding company.
The bill by State Sen. Andrew Jones (R-Centre) would authorize a health care service corporation to reorganize under the ultimate control of a nonprofit holding corporation. The bill passed the Senate unanimously last week.
“This bill is simply about keeping 4,000 jobs in Alabama. In 1990, there were more than 70 Blue Cross plans around the United States. Today, there are 33. Health care is consolidating across state lines. We can either put Alabama and Blue Cross in a position to acquire, or we can be acquired. Do we really want Alabama's Blue Cross owned by Mississippi or another state? The Senate version of the bill prohibits acquisition of a hospital by the holding company,” Jones told 1819 News on Tuesday. “Blue Cross, as a nonprofit, is organized under Title 10A. Every other insurer in Alabama under Title 27 can already do this, and the bill places more restrictions on Blue Cross than those under Title 27.”
Sophie Martin, a Blue Cross spokeswoman, told 1819 News, “SB 247 simply allows Blue Cross and Blue Shield of Alabama to create a holding company – something other insurers already have the right to do and something many of them have already done. Legislation is needed because – even though the Insurance Holding Company Act (27-29-1, et seq.) is applied to BCBS, Title 10A doesn’t give us the authority to create a holding company. This gives us that authority.”
“We are seeing significant consolidation among Blue Cross plans around the country. In that environment, the ability to create this holding company puts us in the best position to remain independent and potentially acquire another Blue Plan if that is the path we need to go down - rather than being put in a position where we might be acquired. Our goal is only to remain a strong, Alabama-based company, and this gives us more options to ensure we can do that,” she added. “This legislation will not change anything whatsoever about the operation of the health plan. It will not impact premiums, benefits, or our contracts with either our customers or our health care providers. It doesn’t change how we are regulated by the Department of Insurance, the Legislature, or our tax liability. It doesn’t add to or subtract from the types of products we can offer. Blue Cross is already permitted to own subsidiaries, including those that provide health care through the health plan itself. In fact, we already own several health care-related subsidiaries. From the subsidiary perspective, this legislation doesn’t change anything.”
Martin continued, “This is an opportunity to modernize the corporate structure to better align with emerging growth initiatives and capital priorities while ensuring the protection and long‑term stewardship of Alabama‑based interests. Our only intent is to be in a position to partner with other Blue Plans in other states while remaining an Alabama-based not-for-profit company. We do not have any intention of using the holding company for anything else.”
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