Blue Cross and Blue Shield:

Experiences of Weak Plans Underscore The Role of Effective State Oversight

HEHS-94-71: Published: Apr 13, 1994. Publicly Released: May 9, 1994.

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Pursuant to a congressional request, GAO reviewed Blue Cross and Blue Shield health care plans, focusing on the: (1) extent of financial weaknesses among the plans; (2) factors that contributed to the plans' weak financial conditions; and (3) measures taken by the plans, the association, and states to address weaknesses.

GAO found that: (1) 53 of 64 plans are rated in fair to excellent financial condition; (2) plan mismanagement and state regulatory requirements have contributed to the financial weaknesses of the plans; (3) oversight weaknesses have allowed plan solvency problems to persist; (4) although recent financial assistance has stabilized some weak plans, the potential challenges posed by health care reform could further strain the finances of some plans; (5) Blue Cross and Blue Shield and states have acted to improve the financial condition of troubled plans; and (6) health care reform could significantly affect the plans and commercial insurers by altering the competitive nature of the health insurance market.

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