HELENA – Blue Cross and Blue Shield of Montana and Health Care Service Corp. of Chicago formally completed their merger Thursday.
The companies in late June had received the necessary regulatory approval from state Auditor Monica Lindeen, the state’s insurance commissioner, and Attorney General Tim Fox.
Health Care Service Corp., the fourth largest health insurance firm in the country, agreed to pay $40 million for Blue Cross and Blue Shield of Montana. That money will go to a new foundation, which will spend it to benefit the public interest in Montana.
HCSC, which owns Blue Cross companies in Illinois, New Mexico, Oklahoma and Texas, had about 13.2 million customers. The merger will add about 250,000 Blue Cross customers in Montana.
Blue Cross and Blue Shield of Montana will become one of the five Blue Cross and Blue Shield operating divisions of HCSC, which is a mutual legal reserve company that has operated as a not-for-profit for 75 years.
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As in the case in the other states, Blue Cross and Blue Shield of Montana will retain its name and continue to have strong local leadership and employee presence, a news release from the two companies said. Mike Frank will continue to serve as Blue Cross and Blue Shield of Montana’s plan president. Employees of the Montana company became employees of HCSC on Thursday.
The companies said the merger gives Blue Cross and Blue Shield of Montana access to enhanced technology, cutting-edge customer service systems, important economies of scale and additional jobs in the state.
“Our focus now is on enhancing our great customer service systems and continuing to collaborate with our network of doctors, hospitals and other health care professionals to expand access to quality, cost-effective health care in Montana,” the companies said in a joint statement.
Lindeen and Fox imposed conditions on the sale. They include requirements that Health Care Service Corp. create 100 new jobs in Montana by 2016, freeze administrative fees on policies for three years and publicly report the salaries of its top Montana executives.
Fox has announced plans for the creation of Montana Healthcare Foundation to administer and distribute the assets.