Blue Cross/Blue Shield, State Farm Team Up To Sell Health Policies

Sept. 23--The state's largest health insurance company is adding the firepower of the nation's largest home and auto insurer to sell health care policies this fall, both companies said Tuesday.

Health Care Service Corp., parent of Blue Cross and Blue Shield of Illinois and Blues plans in four other states, will bolster the number of insurance agents selling its products by about 20 percent with the pact, said Jeffrey Welch, the company's divisional vice president of retail markets.

Bloomington-based State Farm</org>, whose agents have long sold health policies in addition to home and auto policies, will exclusively sell Blue Cross and Blue Shield individual policies in Illinois, Montana, New Mexico, Oklahoma and Texas beginning Nov. 15, the start of open enrollment for coverage that begins in 2015.

State Farm agents will earn commissions for selling individual and family Blue Cross products listed both on and off the health care exchanges created under the Affordable Care Act. The agreement does not include small-group or Medicare plans. State Farm will cease selling individual plans from Milwaukee-based Assurant Health in the five HCSC states, Welch said.

The pact should allow Blue Cross, which signed up 1.2 million people across five states in 2014, to beef up its enrollment figures even more as more Americans seek individual insurance policies under the health law.

"Any time you bring two of the most recognized brands together, it gives (customers) more opportunities to buy our products," Welch said. "It's an alliance with mutual benefits. Expectations are high."

HCSC views the partnership as a way to penetrate harder-to-reach markets within its five states by leveraging State Farm's retail storefronts. State Farm has more than 11,000 agents scattered across 3,300 agencies in the five states, including 4,000 at 1,200 storefront agencies in Illinois.

Last year, agents and brokers were responsible for about 65 percent of the policies it sold outside of the Obamacare marketplaces, but only 20 percent of those sold inside.

Initially, Blue Cross expects most of the policies sold by State Farm to be those listed outside of the marketplaces. "But as time goes on, I expect we'll start seeing more and more on-exchange members who are subsidy-eligible coming through because of the storefront perspective," Welch said.

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