Health Care Service Corporation

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Health Care Service Corporation
Mutual Legal Reserve Company
Industry Managed health care
Founded 1936
Headquarters Blue Cross Blue Shield Tower
Chicago, Illinois, US
Key people
Paula Steiner, Chairman and CEO
Products Health plans; group, disability, life insurance
Number of employees

Health Care Service Corporation (HCSC) is the largest customer-owned health insurance company in the United States, and an independent licensee of the Blue Cross and Blue Shield Association It also deals in life insurance products and is structured as a mutual legal reserve insurer. It concentrates its operations in Illinois and Texas. As the 4th largest health insurer in the US overall, it employs more than 22,000 people and serves nearly 15 million members.


In 1936, a group of Chicago civic leaders, hospital officials and physicians pooled their own resources and launched what was initially called the Chicago Plan for Hospital Care. The company's first health insurance policy became effective on January 21, 1937.

The company, incorporated as Hospital Service Corporation, enrolled 36,000 members in the first six months of operations. The company adopted the Blue Cross symbol in 1939 and the Blue Shield symbol in 1947.

The Blue Cross Plan for hospital services and the Blue Shield Plan for physician services operated separately until 1975 when they were merged as Health Care Service Corporation. By 1982, all the smaller Blue Cross plans in Illinois were also merged with the Chicago-based plan, and the company operated as Blue Cross and Blue Shield of Illinois. Other Blue Cross and Blue Shield plans joined HCSC: Texas in 1998; New Mexico in 2001; Oklahoma in 2005; and Montana in 2013.

Company structure[edit]

HCSC is an independent licensee of the Blue Cross and Blue Shield Association. It structures itself as a particular type of mutual insurance, a mutual legal reserve insurer.[citation needed]

Geographical area of operations[edit]

As of 2015 HCSC's operations are concentrated in Illinois and Texas, which accounted for 84% of total revenue through the first nine months of 2014, followed by Oklahoma (9% of revenue).[1] HCSC markets itself as a Blues plan, and its divisions and subsidiaries are Blue Cross and Blue Shield of Illinois, Blue Cross and Blue Shield of Texas, Blue Cross and Blue Shield of Montana, Blue Cross and Blue Shield of New Mexico, Blue Cross and Blue Shield of Oklahoma, and Dearborn National.[citation needed]

Financial information[edit]

As of 2014 HCSC was the country's largest nonpublic health insurer and the fourth-largest health insurer overall, with more than 4 million members.[1]

In 2010 HCSC nearly doubled its income to $1.09 billion, and began "a streak of billion-dollar profits for 4 straight years".[2] Between 2009 and 2013, HCSC's five-year average of return on capital was 10.5%. During 2014 HCSC profits decreased "from medical losses and expenses associated with the company's aggressive addition of members sourced from ACA exchanges". Yet in 2015, Fitch Ratings assessed its financial strength still at 'A+' and gave it an 'A' for likelihood of default and senior unsecured rating. Finch stated that "lack of geographic diversification has historically kept HCSC out of the 'AA' rating category and that HCSC would be downgraded if it were no longer to market itself as a Blues plan.[1]

See also[edit]


  1. ^ a b c Fitch Ratings (February 17, 2015). "Fitch Affirms Health Care Service Corporation's Ratings". Reuters. Retrieved 25 May 2015. 
  2. ^ "Blue Cross parent boosts profit in second quarter". Crain's Chicago Business. Crain Communication, Inc. 3 September 2013. Retrieved 18 December 2014. 

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