HELENA — Insurance Commissioner Monica Lindeen on Thursday approved a much larger Illinois company’s plans to buy Blue Cross and Blue Shield of Montana.
Blue Cross is Montana’s largest private health insurer with about 250,000 customers. Health Care Service Corp., a much larger company operating in four states, has offered $40 million for the nonprofit company.
Lindeen said her approval requires the company to keep all 450 jobs in Montana and to later add another 100. She said the company expects to complete the acquisition quickly, which it says is needed to compete in a changing insurance marketplace.
Other stipulations include a commitment to keeping administrative fees below current levels, maintaining charitable giving, begin paying a premium tax that the nonprofit BCBS had been exempt from and other requirements.
Lindeen signed her approval Thursday.
Earlier in the week Attorney General Tim Fox gave his approval to the financial aspects of the deal, including that the proceeds of the transaction be paid to a new health care foundation that benefits the public interest. He will announce details of that process later.
The two companies said in a release that it would review the approval orders.
“This is an important milestone in the process,” spokesman John MacDonald said. “There are a number of factors for us to consider as we look at the next business steps necessary to form the alliance.”
Lindeen said she was skeptical of the offer at first but understands the need for BCBS to hitch its wagon with a larger company to be successful. The company needs to be positioned to offer products on the new marketplace exchanges starting next year under the federal health care law.
She said her office will use its authority granted last year by the Legislature to ensure that rates remain reasonable and fair.
“While this has not been an easy decision, I think that we’ve reached the best deal that we could for the people of Montana,” Lindeen said.