Blue Cross and Blue Shield of Alabama

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Blue Cross and Blue Shield of Alabama (BCBSAL) is a nonprofit health insurance company based in Birmingham, Alabama. It began in 1936 as Hospital Service Corporation, became Blue Cross-Blue Shield of Alabama in 1952, and adopted its current name in 1970. It serves more than 3 million people and is part of the national Blue Cross Blue Shield Association. The company employs about 5,000 people, including around 3,500 at its Birmingham headquarters, and it also runs Cahaba Government Benefit Administrators and Cahaba Safeguard Administrators, both in Birmingham, which work with Medicare and government programs.

BCBSAL holds a dominant position in Alabama, covering more than 90% of the state’s health insurance market. Under Alabama law it is treated as a special health-benefit service plan rather than a traditional insurer, so premium-rate reviews by the state are limited as long as its rating methods don’t change.

Financially, BCBSAL reported about $4.1 billion in revenue in 2011 and roughly $257 million in net income. Its assets were around $2.4 billion, and it carried a large surplus (unassigned funds) of about $991 million by 2012. About 90 cents of every premium dollar goes back to members as benefits. The company has used self-insurance strategies to maintain stability in paying claims.

BCBSAL’s growth history includes reaching 1 million members by 1970, 2 million by 1994, and more than 3 million by around 2016. The organization has also owned the United Trust Insurance Company, which handled certain life and disability coverage and related risks.

Cahaba Government Benefit Administrators (GBA) administers Medicare fee-for-service claims, and in 2009 won a CMS contract to serve Alabama and three other states. Cahaba Safeguard Administrators, founded in 2002, focuses on preventing Medicare fraud and is one of CMS’s contractors. Tim Vines has been president and chief executive officer since 2018.

BCBSAL has faced legal scrutiny, including antitrust lawsuits in 2012. In 2020, BCBS insurers in several states sued CVS Health over alleged inflated prices for generic drugs.