Blue Access for Employers

BCBSTX Announces New Private Exchange

Health Care Service Corporation (HCSC), which operates Blue Cross and Blue Shield of Texas (BCBSTX), announced today an agreement that will establish a nationwide private exchange for employers to use in managing their health benefit offerings.

HCSC has joined WellPoint, Inc. and Blue Cross and Blue Shield of Michigan (BCBSM) in purchasing equal stakes in Minneapolis-based Bloom Health, an emerging leader in the defined contribution health benefits marketplace. The Bloom private exchange brings an innovative solution and cutting edge technology for the defined contribution model on a national level. With new offerings such as this private exchange, BCBSTX will be well positioned to help employers navigate the changing health care market.

With this purchase, we will immediately cover 19 states, with the goal of developing this into a 50-state solution in the near future.

BCBSTX will begin offering limited enrollment for groups renewing in the first quarter of 2012 and will be fully operational for all markets by 2013. We welcome clients to explore this option in addition to BCBSTX's traditional offerings.

We are constantly assessing ways to prepare for the future and we're sure our competitors are doing the same. It is important that we take a leadership position in proactively developing a private exchange solution now, to remain ahead of our competitors.

In our case, purchasing Bloom Health will allow us to further expand our ability to compete in an ever-changing marketplace. We will continue improving access, choice and flexibility and positively impact the evolving generations of solutions to manage health care costs. The use of other defined-contribution, consumer-directed health plans have been growing for years, including Health Reimbursement Accounts, Health Savings Accounts and the like.

Through its private exchange platform, Bloom Health helps employers define and manage their health benefits spending through a defined contribution model. The employer contributes a defined amount per employee toward the cost of employee health care benefits. Employees and individuals are presented with a wide selection of benefit plans through an online "marketplace" to best fit their needs.

The concept of an exchange model began a little over five years ago in the group retiree market as a way to facilitate the transition of group retirees into the open retail market, which offers Medicare Supplement, Medicare Advantage and Part D Prescription Drug program options. Some companies maintained retiree coverage by instituting caps on employer costs and shifting liability for future increases to retirees. As retiree contributions escalated, the market responded by offering private exchanges to Medicare-eligible employees, providing a mechanism for employers to subsidize coverage while lowering administrative costs. The marketplace is now evolving beyond just retirees into actives and COBRA participants.

Our health care system can and must work better, be more efficient and truly provide for all people. BCBSTX is at a stage where our contributions are meaningful, our capabilities are growing in a fashion that can advance innovation, and our results continue to demonstrate the value of our services to a diverse and large group of constituents.

Your BCBSTX account representative can address questions you have about this new acquisition. For more information on Bloom Health and to watch a demonstration of their defined contribution model platform, go to