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Arkansas Blue Cross and Blue Shield, the state's largest health insurer, is continuing to explore a "strategic affiliation agreement" with Cambia Health Solutions, a nonprofit health insurance company based in Oregon, Arkansas Blue Cross said Thursday. "This is not a merger or acquisition," Kerri Nettles, a spokesperson for the Arkansas nonprofit insurer, said in a statement. "The affiliation model we are exploring is designed to retain local presence and governance while also providing potential for faster innovation and the cost benefits of shared resources." Discussions about an agreement were first reported in January by Arkansas Business. The agreement has not been finalized and would be subject to regulatory approval, according to Nettles. Nettles, who referred to Cambia as a "long-standing collaborative partner," declined to comment on the specifics of the affiliation before any agreement is signed, including leadership roles. In her statement, Nettles said that Blue Cross members will be able to maintain their existing coverage as well as use their current insurance cards and provider networks. Strategic affiliation agreements are not new for Cambia, a group of health companies formed in 1996. It's affiliated health plans include four Blue Cross licensees in the Western United States. In June, the company announced a strategic affiliation agreement with Blue Cross Blue Shield of North Dakota. Under the agreement, expected to close next year, Blue Cross of North Dakota will be managed and operated by Cambia -- along with Blue Cross' employees in that state -- but will maintain its local plan name and board of directors. Cambia covers around 3.6 million members and employs 4,600 people, according to a company fact sheet. Arkansas Blue Cross' discussions come as Blue Cross Blue Shield companies across the country look to scale to compete with for-profit health care companies. The company posted a loss of just more than $100 million on falling revenue through Sept. 30 of last year, according to a financial update filed with the Arkansas Insurance Department, compared to a net income of $94.7 million in the first three quarters of 2023. And it isn't alone. Last year, most Blue Cross and Blue Shield companies lost money amid rising Medicaid and Medicare costs, according to a report from Modern Healthcare. Blue Cross submitted a proposed rate increase to the Arkansas Insurance Department earlier this year that would raise premiums for individual health insurance plans by 25.5% -- a proposition Gov. Sarah Sanders called "insane" in a statement in August. Blue Cross said that the raises it's proposing are "consistent with what other insurers are requesting." Lucas Dufalla is a Report for America Corps member. Financial support for this coverage came from the Community Journalism Project.
