Blue Cross and Blue Shield

Blue Cross and Blue Shield consist of 39 separate organizations that provide health insurance through a variety of companies across the United States. It is estimated that approximately 100 million consumers throughout the United States currently have coverage under the Blue Cross and Blue Shield name. Blue Cross began in 1929 and Blue Shield began in 1939. The two companies merged in 1982 to become the organization that they are today. Each Blue Cross/Blue Shield company is a franchise and works independently from the organization. These companies offer health insurance options in every state in America. In addition, they work as administrators of Medicare in several states and offer insurance coverage to many state and federal employees as part of employer benefit packages.

Blue Cross and Blue Shield provide insurance coverage in a variety of options. Healthcare coverage from the company in the United States is currently available through Flexible Spending Accounts, Health Maintenance Organizations, Health Savings Accounts, Health Reimbursement Arrangements, Indemnity and Traditional Coverage, Point of Service and Preferred Provider Organization policies. In order to choose the best plan, an individual should understand what each of these options entail.

Flexible spending accounts will allow members to use their pre-tax dollars for medical and dependent care costs as long as these services are eligible. Members of these plans add money to their FSA or flexible spending account through their paycheck before taxes are taken out each pay period.

An HMO or Health Maintenance Organization shares the delivery and the financial risks that are associated with providing medical coverage benefits to enrollees in a specific geographic area. This is typically done in exchange for a fixed fee. This is a popular choice among many seeking healthcare coverage and currently makes up for more than sixteen million enrollees in the Blue Cross/Blue Shield family.

A Health Savings Account or HSA will allow enrollees to save money by putting it into an account that has a preset tax advantage. Contributions that qualify under an HSA are tax-deductible and the funds are taken out as needed to pay for qualified medical services. These funds are also tax-free.

An HRA or Health Reimbursement Arrangement is an account that an employer sets up for workers in a company. It allows employees to seek reimbursement for specific qualifying medical expenses such as pharmaceuticals, coinsurance fees and deductibles.

Indemnity or traditional insurance coverage is the most commonly chosen of all types and allows enrollees the most freedom with their coverage. It provides the most control over health care options. This type of insurance coverage is often referred to as fee for service and allows an insured member to choose any physician although benefits are greater when an insured member chooses a provider that is included in the Blue Cross/ BlueShield network of providers.

A POS or Point of Service policy will allow a member to choose specific medical services as they are needed as well as choosing a personally preferred or a Blue Cross/ Blue Shield network medical service provider.

A PPO or Preferred Provider Organization offers benefits by supplying services at discounted prices. This is done by the insurance carrier offering incentives for its members when they use healthcare providers who are part of the Blue Cross and Blue Shield provider network. Members who are enrolled in a Preferred Provider Organization may also be eligible for coverage for specific services by certain healthcare providers or physicians that are not included in the PPO network. It is estimated that there are currently nearly 70 million members of a Blue Cross/Blue Shield Preferred Provider Organization throughout the United States.

Last updated on May 20th, 2010 and filed under Health Insurance. Both comments and pings are currently closed.

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