Blue Cross Blue Shield

Example

“Maria's employer offers Blue Cross Blue Shield of Michigan health insurance, which provides nationwide coverage when she travels for business through reciprocal agreements with other Blue plans.”

Memory Tip

Remember 'Blue for Hospitals, Blue for Doctors' - Blue Cross originally covered hospital costs, Blue Shield covered physician services, now combined as one system.

Why It Matters

As one of the largest health insurance systems in America, Blue Cross Blue Shield plans often provide extensive provider networks and have significant negotiating power with healthcare providers, potentially meaning lower costs and better access to care. Many employers offer these plans as their primary health insurance option.

Common Misconception

Many people think Blue Cross Blue Shield is one national insurance company, but it's actually 36 independent companies that license the brand. Coverage, benefits, and costs can vary significantly between different Blue Cross Blue Shield plans in different states or regions.

In Practice

John has Blue Cross Blue Shield of Texas with a $1,500 deductible and 80/20 coinsurance. He needs surgery costing $15,000. He pays his $1,500 deductible first, then pays 20% of the remaining $13,500 ($2,700), while insurance covers the other 80% ($10,800). His total out-of-pocket cost is $4,200, and if he reaches his annual out-of-pocket maximum of $6,000, any additional covered services that year would be paid 100% by insurance.

Etymology

Blue Cross originated in 1929 at Baylor University Hospital for hospital coverage, while Blue Shield began in 1939 covering physician services, with the blue color chosen to represent trust and reliability in healthcare.

Common Misspellings

Related Terms

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