Business
Blues association forms bank
NEWS IN BRIEF — Posted Dec. 26, 2005
The Blue Cross and Blue Shield Assn. plans to launch its own bank to handle health savings accounts.
Blue Healthcare Bank, to be based in Salt Lake City, would give a centralized banking source that would process medical transactions to Blues customers who use consumer-driven accounts now handled by third-party vendors, the company said. Blue Healthcare Bank will open by 2007.
The Chicago-based association hopes to capitalize on the growing market for consumer-driven health accounts. According to a report by DiamondCluster International, health savings accounts could hold as much as $75 billion by 2010.
Indianapolis-based WellPoint, the nation's largest carrier of Blues plans, will support the bank's creation but said it would not use its services. WellPoint has banking operations with JPMorgan Chase & Co. and Mellon Bank and plans to continue using those financial institutions for consumer-driven plans.
Last year, UnitedHealth Group launched its own bank to manage consumer-driven health plans, Salt Lake City-based Exante Bank.
Glenn Melnick, a health care financing expert with RAND, predicts that more insurers will start banks. "Opening a bank is a relatively cheap way to monitor what's going on," Melnick said. "They can see how much money is fluctuating into the accounts. It's a way to connect themselves to a new emerging market."
Note: This item originally appeared at http://www.ama-assn.org/amednews/2005/12/26/bibf1226.htm.
