Blue Cross and Blue Shield of Minnesota was created in a June 1, 1972 merger of Minnesota Blue Cross and Blue Shield of Minnesota. The organization and its affiliates provide a variety of products and services, including health plans for employers and individuals; life insurance; long-term care plans; pharmacy benefits management; administrative services for self-insured groups; managed care services for workers' compensation; behavioral health care; and health and wellness programs. It administers the federal Medicare programs, and serves as the writing carrier for the Minnesota Comprehensive Health Association. It also offers a variety of other employee health benefits services through several for-profit subsidiaries. In 2004 it was the largest health plan in Minnesota, providing health coverage to more than 2.6 million members.
Minnesota Blue Cross was a nonprofit organization incorporated as the Minnesota Hospital Service Association. Organized by a group of Minnesota hospitals in 1933, it was Minnesota's first health plan and was based in St. Paul. The Association was one of the 90 approved non-profit plans in the United States and Canada, authorized by contracting hospitals to furnish hospital care through contracting hospitals to groups of employed persons and their families. These plans were known as "Blue Cross Plans" and each plan served a particular area. The contracting hospitals of the Minnesota Blue Cross Plan agreed to furnish hospital service according to the subscriber's contract and were reimbursed out of the monthly payments made by subscribers to the Minnesota Hospital Service Association. Minnesota Blue Cross operated as a non-profit corporation, and not under the state insurance laws. A companion plan, called Mii, incorporated in 1954 as Minnesota Indemnity, Inc. and organized under the insurance laws of Minnesota, helped pay for medical-surgical care. It was owned and operated by the Minnesota Hospital Service Association. These two organizations (MHSA/Blue Cross and Mii) made health care service on a pre-payment basis available to residents of Minnesota.
Minnesota Medical Service Inc., also known as Blue Shield of Minnesota, was a voluntary, non-profit surgical plan sponsored by the medical profession of Minnesota. It was for many years based in Minneapolis. Promotional work for subscribers enrollment in the Blue Shield Plan was carried on in conjunction with enrollment of Blue Cross subscribers. Blue Shield of Minnesota was formally organized in 1945 with its operating supervision being through the attorney general of Minnesota. Blue Shield benefits began to be sold in Minnesota in 1947.
Blue Cross and Blue Shield were separate organizations, with separate boards of directors and chief executive officers. The Blue Shield product was marketed by Blue Cross under an "expense sharing" contract. This arrangement continued through November 1959 when by mutual agreement the two decided to discontinue joint operations and become competitors. Shortly after this time Blue Cross began offering medical/surgical coverage through Mii. Blue Shield later entered the hospital coverage field with its Blue Shield Hospital Rider.
In April 1970 it was disclosed that Blue Shield was in serious financial difficulty, and Blue Cross was asked by the state insurance department, the attorney general, and the governor to assume operation of Blue Shield, which it agreed to do on April 27. A management agreement was implemented at that time, and the two plans operated under that agreement until May 17, 1972 when the corporate members of each body approved a formal merger of the two corporations into Blue Cross and Blue Shield of Minnesota effective June 1, 1972.
The historical information above was taken from Corporate Report Fact Book 2000, from the company's web site, and from materials found within the collection.
From the guide to the Corporate records., 1930-2000 (bulk 1940-1983)., (Minnesota Historical Society)
