Blue Shield of California is set to expand its Medicare Advantage plan and group health plan business with the acquisition of GEMCare Health Plan, Inc. of Bakersfield. Blue Shield announced they had entered into an agreement to purchase GEMCare on January 7, 2014. Blue Shield will ultimately absorb GEMCare’s 8,000 Medicare Advantage plan and 12,000 group plan members in the counties of Kern, San Luis Obispo and Santa Barbara.
Blue Shield expanding Medicare Advantage plan footprint
Blue Shield has introduced a very competitive Medicare Advantage plan in ten select counties through out California. With the acquisition of GEMCare, Blue Shield will be able to more easily offer a version of their Blue Shield 65 Plus HMO plan in the GEMCare service area. While some Medicare Advantage plans seem to be reducing plan benefits and dropping counties, Blue Shield has been selectively increasing their MA-PD footprint in California.
New Accountable Care Organizations
GEMCare Health Plan is owned by Dignity Health hospitals and GEMCare Independent Practice Association which is a physicians group. GEMCare has focused on providing HMO group and Medicare Advantage health insurance plans to communities in the Southern San Joaquin Valley and Central Coast of California. The Blue Shield announcement also mentioned developing new Accountable Care Organizations which have been initiated under Affordable Care Act.
Few changes in 2014
The press release and additional information provided by Blue Shield stress that little will be changing at GEMCare in the near future. Both Medicare Advantage plans regulated by the Centers for Medicare and Medicaid and group HMO health plans overseen by the California Department of Managed Health Care must review the acquisition. The labyrinth of rules concerning such highly regulated insurance products virtually guarantees very few changes to any plans in 2014.
Blue Shield well positioned under ACA
Blue Shield has been ahead of the curve when it came to rolling out new ACA health plans and getting their website and billing systems up and integrated with Covered California. Blue Shields better than average performance under the new ACA environment has been better than most health insurance companies and that experience should bode well for the members and employees of GEMCare.
Blue Shield GEMCare Press Release
Blue Shield of California to Acquire GEMCare Health Plan
SAN FRANCISCO, CA (January 7, 2014) — Blue Shield of California has entered into an agreement to acquire Bakersfield-based GEMCare Health Plan, the company announced today. GEMCare is active in the commercial and Medicare markets in Kern County and the Central Coast.
With the planned acquisition, Blue Shield will broaden total membership and provider networks and add Medicare members in Kern, San Luis Obispo and Santa Barbara counties for the first time. Expanding into new markets aids Blue Shield’s mission of increasing access to quality, affordable health care for all Californians.
The acquisition agreement also facilitates new patient-centered medical homes and accountable care organizations, furthering improvements in quality and lowering costs.
GEMCare members will experience minimal changes. All GEMCare Medicare business will remain with current contracts. Commercial members will retain coverage at current premiums until their next renewal date.
GEMCare Health Plan employees will continue to provide services on behalf of the GEMCare Health Plan and will be employed through Managed Care Systems, a third party administrator, during the transition period.
Blue Shield and GEMCare have notified the appropriate state and federal regulators on required approval and disclosure. The agreement is subject to the approval of the California Department of Managed Health Care.
Background on Blue Shield of California
Blue Shield of California, an independent member of the Blue Cross Blue Shield Association, is a not-for-profit health plan with three million members, 5,000 employees and $10.5 billion in annual revenue. Founded in 1939 and headquartered in San Francisco, Blue Shield of California provides health, life, dental, vision, and Medicare insurance and health care service plans in California. Blue Shield of California was named one of the World’s Most Ethical Companies in 2012 and 2013. Since 2005, the company has contributed more than $200 million to Blue Shield of California Foundation, one of BusinessWeek’s most generous corporate foundations. Contact your local agent or broker about Blue Shield of California products and services, or visit www.blueshieldca.com.
Background on GEMCare Health Plan GEMCare Health Plan (GHP), based in Bakersfield, California, has been in business since 2006. It is a provider owned health plan and its shareholders are Dignity Health, the largest hospital system in the Western states, and physicians of GEMCare IPA, which has been existence since 1992. The plan has 8,000 Medicare members and over 12,000 commercial members and operates in Kern County as “GEMCare Health Plan” and on the California Central Coast (San Luis Obispo, Northern Santa Barbara and Ventura counties) as “Physicians Choice Health Plan.” http://gemcarehealthplan.com/