Blue Cross Blue Shield Association

Blue Cross and Blue Shield developed separately. Blue Cross provided coverage for hospital services, and Blue Shield covered physicians' services.

Blue Cross is a name used by an association of health insurance plans throughout the United States. Its predecessor was developed by Justin Ford Kimball in 1929, while he was vice president of Baylor University's health care facilities in Dallas, Texas. The first plan guaranteed teachers 21 days of hospital care for $6 a year, and was later extended to other employee groups in Dallas, and then nationally. The American Hospital Association (AHA) adopted the Blue Cross symbol in 1939 as the emblem for plans meeting certain standards. In 1960, the AHA commission was superseded by the Blue Cross Association. Blue Cross severed its ties with the AHA in 1972.

Blue Shield was developed by employers in lumber and mining camps of the Pacific Northwest to provide medical care by paying monthly fees to medical service bureaus composed of groups of physicians. In 1939, the first official Blue Shield plan was founded in California. In 1948, the symbol was informally adopted by nine plans called the Associated Medical Care Plan, and was later renamed the National Association of Blue Shield Plans.

In the 1960s, the U.S. government chose to partner with Blue Cross and Blue Shield companies to administer Medicare.

In 1982, Blue Shield merged with The Blue Cross Association to form the Blue Cross and Blue Shield Association (BCBS).

Prior to 1986, organizations administering BCBS were tax exempt under 501(c)(4) as social welfare plans. However, the Tax Reform Act of 1986 revoked the exemption because the plans sold commercial-type insurance. They became 501(m) organizations, subject to federal taxation, but entitled to "special tax benefits" under IRC 833.

In 1994, BCBS changed to allow its licensees to be for-profit corporations. During 2010, Health Care Service Corporation, the parent company of BCBS in Texas, Oklahoma, New Mexico, Montana and Illinois, nearly doubled its income to $1.09 billion in 2010, and began four years of billion-dollar profits. In the final spending bill for FY 2015, after much lobbying since 2010, nonprofit Blue Cross and Blue Shield plans continue to have special tax breaks that were understood to be threatened by the Affordable Care Act of 2010.

Antitrust settlements

In 2022, the group of 34 companies that make up the BCBS Association settled an antitrust investigation by allowing competition among member companies under non-Blue names while retaining regional exclusivity for regional licenses.

In October 2024, BCBS settled a class-action antitrust lawsuit first brought in 2012 by physicians, hospital systems, and other providers who alleged that they had been underpaid for insurance reimbursements, with BCBS agreeing to pay $2.8 billion to resolve the claims, in the largest healthcare antitrust settlement to date.

Claim denial controversies

Robert Salim throat cancer treatment denial

In 2018, Louisiana attorney Robert Salim was diagnosed with stage 4 throat cancer, however, the proton therapy ordered by his doctor was denied by Blue Cross Blue Shield. Salim sued. In July 2022 the United States District Court, Western District of Louisiana ruled that "Because Salim showed that PBT was a nationally accepted standard of care for advanced head and neck cancer in 2018, BCBSLA abused its discretion in finding Salim's PBT treatment was not medically necessary." A ProPublica investigation found that Blue Cross and Blue Shield of Louisiana used guidelines from an outside company called AIM Specialty Health to reject appeals for denial, and that this practice was widespread.

Surgical anesthesia denial

In August 2024, BCBS of Illinois, Texas, New Mexico, Montana, and Oklahoma changed their surgical anesthesia reimbursement policy to remove additional payments for medically complex patients, a move which the company said would streamline costs. This move was strongly denounced by the American Society of Anesthesiologists.

In November 2024, it was announced that BCBS of New York, Connecticut, and Missouri would cease to cover the cost of anesthesia for surgeries which exceeded a time limit based on data from the Centers for Medicare and Medicaid Services, regardless of the time actually required for the surgery. Anthem argued that there was evidence of overbilling fraud by anesthesiologists, patients wouldn't have to pay if their operations went overtime, and that anesthesiologists could appeal for payment in the event that their operation went over the limit for out of medical necessity. The American Society of Anesthesiologists decried this move, calling it a “money grab” and “commercial health insurers looking to drive their profits up at the expense of patients”. This move was later canceled the day after the assassination of UnitedHealthcare CEO Brian Thompson which caused the policy to receive renewed backlash online, though there is no direct evidence linking either event to the cancelation due to backlash existing before the shooting.

A week after the shooting, a woman in Lakeland, Florida was arrested and charged after allegedly saying "Delay, deny, depose, you people are next" to a line representative after her claim was denied. The judge set her bail at $100,000, citing "the status of our country at this point".