If BCBS insures 5 different companies (5 groups), each is not priced to be profitable by itself, but such that the overall BCBS profit level is achieved. Groups that cost BCBS more are subsidized by groups that cost them less. This is also true if BCBS has one company in a group and that company has locations in 5 different states. Most insurance companies already have networks of providers in multiple states/locales.
The actual mechanics of the plan are entirely different from the appearance. In your example of a business that operates in 5 states, but has their insurance through BC/BS. The employees in each state are not being covered by the same insurance company, even though it appears so. Underneath BC/BS is BC/BS Alabama, BC/BS Georgia, BC/BS Mississippi, etc. Each of them contracts physicians, and administers health plans that are slightly different in benefits and premiums. All the group plans for a particular state are in the same "risk pool" regardless of the company. In other words, the risk pool isn't the business, but the geographic region.
The major insurance carriers work VERY hard to appear to be a seamless national whole for marketing purposes but appearance is all it is.
- 09/03/2017 03:41:59 AM
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- 14/03/2017 03:03:34 PM
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