Blue Shield: Current Issues and Future Direction

Abstract

Although Blue Cross plans receive the floodlight of public attention more commonly than Blue Shield plans, the latter plans are no less deserving of public and scholarly interest. In spite of early contributions and accomplishments, the times have not been entirely kind to Blue Shield. The total number of individuals insured under the plans has continued to increase, but the growth rate has slowed considerably in recent years as may be seen in Table 1. More significantly, the proportion of the United States' population protected by Blue Shield plans has remained virtually constant for six years at 26 to 27 per cent. A minor reason for some of the enrollment changes in recent years has been an increase in the number of approved plans, as may also be seen in Table 1. The reasons underlying the standstill in percentage of population covered have been discussed elsewhere, with particular attention being paid to the competitive advantage insurance companies have had through the use of experience rating techniques.2 This paper will suggest other operational and competitive factors that influence the vibrance of Blue Shield plans in the modern era of health economics.