Blue Cross:
“Profitization”—A National Trend

Jun 17, 2002

The efforts in Michigan by politicians to convert Blue Cross Blue Shield of Michigan to “for-profit” status are just part of a trend that’s been occurring all over the country. There has been at least some action taken on changing the status of the Blues in at least 31 states, plus the District of Columbia and Puerto Rico. The Blues have gone “for-profit” in at least 19 states. Two companies, Anthem Insurance Companies, Inc. and WellPoint Health Networks have between themselves bought up Blues plans in eleven states and are looking to buy more soon.

We can see from the experience in other states what the conversion to for-profit means. In a number of states, consumer groups have had to fight to stop company executives from being paid high bonuses by companies acquiring the Blues. In several states, Anthem and WellPoint have been accused of selling coverage with very high deductibles, making health care unaffordable for many people.

The profits of these two companies are increasing greatly. For both companies, profits are up at least 40% over a year ago, and that’s on top of 30 to 50% increases last year. The profits for these two companies are likely to be around a billion dollars.

The conversion of the Blues to for-profit just makes more obvious the kinds of profits that are to be had in a profit-making health care system. Even while Blue Cross was “non-profit” they had their own for-profit subsidiaries. And Blue Cross has always been a conduit, channeling enormous sums of money into “for-profit” hospitals, pharmaceutical and medical supply companies, and other insurance companies for many decades. And that doesn’t even take into account other industries, like construction and banking that have provided services to the medical industry.

Paying for health care in a profit-making system has catastrophic results for human health.