Insurance regulators in Vermont have rolled out two separate review processes for the proposed affiliation between Blue Cross Blue Shield of Vermont and Blue Cross Blue Shield of Michigan, VTDigger reported Aug. 16.
Pending regulatory approvals, Berlin-based BCBS Vermont would become a subsidiary of Detroit-based BCBS Michigan, but all governance, operational and policy decisions would still be made locally. BCBS Vermont would also retain its name, executive leadership and headquarters. Decisions around premiums would stay in their respective states and would be used to continue paying claims, administer plan operations, and maintain member reserves. Each organization would still operate financially as a single affiliate.
Vermont's insurance department will review the proposal through the lens of BCBS Vermont as an insurance holding company in addition to it operating as a nonprofit insurer, VTDigger reported.
BCBS Michigan says the deal will lead to $10 million in savings for BCBS Vermont over a period of three years. To deny the affiliation, the state would need to find that approval would leave BCBS Vermont unable to meet business requirements or in financial jeopardy, it would lower insurance competition in the state, or it would harm policyholders and the public interest.
A public hearing is scheduled for Aug. 29, with a final decision expected by late September.