Arkansas Blue Cross and Blue Shield, the state’s largest health insurer, will join with Oregon-based nonprofit health insurance company Cambia Health Solutions in a strategic affiliation agreement, the insurer said Thursday, ending months long discussion between the two health care companies amid rising financial challenges for Blue Cross.
Blue Cross will continue to operate as an Arkansas-based mutual health insurance company and members will retain their current coverage, according to a news release. The deal, subject to regulatory approval, is expected to close in 2026.
If approved, the two companies will operate under the same management and administrative structure with a joint management team, with current Blue Cross President and Chief Executive Officer Curtis Barnett remaining in his leadership role, according to Blue Cross spokesperson Kerri Nettles.
Blue Cross has over 2 million members, 800,000 of whom reside in the Natural State. It has approximately 3,200 employees, all of whom will become Cambia employees if the deal is approved.
“To ensure we continue to be well position to serve our members now and into the future we must evolve in completely new ways … We will continue to support members with local expertise and ensure every health care dollar is spent wisely,” Barnett said in a statement.
Blue Cross’ board will oversee the company, including local budgets, while Cambia’s board will oversee shared services and an enterprise-wide strategy, according to Nettles. She said Blue Cross will have representation on the board but did not elaborate.
When asked why Blue Cross chose Cambia as a partner, Nettles said the deal will “enhance and expand capabilities and offerings for members and customers.” The company will invest in new programs, including those related to maternal and family health, according to a news release.
Strategic affiliation agreements are not new for Cambia, a group of health companies formed in 1996. It’s affiliated health plans include four Blue Cross licensees in the Western United States.
In August, the company announced a strategic affiliation agreement with Blue Cross Blue Shield of North Dakota, subject to regulatory approval. Under the agreement, expected to close next year, Blue Cross of North Dakota will be managed and operated by Cambia — along with Blue Cross’ employees in that state — but will maintain its local plan name and board of directors.
Cambia covers around 3.6 million members and employs 4,600 people, according to a company fact sheet.
Arkansas Blue Cross’ discussions come as Blue Cross Blue Shield companies across the country look to scale up to compete with for-profit health care companies.
Discussions involving Cambia were first reported by Arkansas Business in January. That same month, the Arkansas Blue Cross eliminated 75 jobs — 2% of its workforce — amid rising costs, declining membership and rising demand for services.
Last year, most Blue Cross Blue Shield companies lost money amid rising Medicaid and Medicare costs, according to a report from Modern Healthcare.
One in three Americans are covered by the Blue Cross Blue Shield Association’s 33 affiliate providers.
Asked if any Blue Cross employees were facing job losses, Nettles said in a statement that “any labor adjustments at this time would be due to changes in membership for certain product lines.”
“After regulatory approval of the affiliation and as we go through the integration process, both organizations will share services and resources over time, which means some roles will likely evolve,” Nettles said.
Blue Cross submitted a proposed rate increase to the Arkansas Insurance Department earlier this year that would raise premiums for individual health insurance plans by 25.5% — a proposition Gov. Sarah Huckabee Sanders called “insane” in a statement in August.
Blue Cross said the premium increases it is proposing are “consistent with what other insurers are requesting.”
Lucas Dufalla is a Report for America Corps member. Financial support for this coverage came from the Community Journalism Project.
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