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Blue Cross to Partner With Bupa to Set Global Health Plan

Updated on

Jan. 9 (Bloomberg) -- A group of U.S. Blue Cross insurers, including WellPoint Inc., is collaborating with the U.K.’s Bupa to create the world’s biggest provider network for international health-insurance customers, the companies said.

The Blue Cross and Blue Shield Association will form a combined provider network with Bupa, the U.K.’s largest private medical insurer, that will include more than 11,500 hospitals in more than 190 countries, the partners said in a statement. Closely held Bupa will also purchase a 49 percent stake in Highway to Health Inc., a company owned by the Blue Cross plans that sells global insurance products. Terms weren’t disclosed.

The partnership may help Blue Cross insurers like WellPoint better compete with UnitedHealth Group Inc. and Cigna Corp., who have been growing business outside the U.S. The partnership will initially focus on benefits for expatriate workers and look to expand its offerings later on.

“We are going to be able to provide expatriates with the best solution to access health care around the world, and this will also benefit large employers who have employees who travel abroad for long periods,” said Robert Elfinger, a spokesman for the Chicago-based Blue Cross Association, in a telephone interview. In Blue Cross and Blue Shield, the venture has “a brand everybody knows and Americans trust.”

The companies weren’t releasing terms of the purchase by London-based Bupa, Elfinger said, and he declined to estimate possible future membership, sales or profitability.

Globally Mobile

Global corporate travel and international assignments are expected to increase 50 percent by 2020, according to Elfinger, who cited a 2010 PricewaterhouseCoopers LLP study. Assignments had already risen 25 percent in the decade before that, the report found.

“People are becoming increasingly globally mobile –- either to live, study or simply travel abroad for long periods of time -– and travel insurance doesn’t always provide the coverage they need or expect,” said Robert Lang, managing director of Bupa’s Global Market Unit, in the statement. “We’re responding by creating the biggest global provider network for people who require international health coverage, and other propositions will follow later this year.”

Bupa has 800,000 members in its international health plans, while Blue Cross international policies serve about 25,000 members currently, Lang said. The American companies have potential to expand, given their policies cover 100 million people in individual and employer plans, he said.

The group of U.S. insurers includes 16 Blue Cross plans, led by Indianapolis-based WellPoint, the second-biggest U.S. provider. UnitedHealth, based in Minnetonka, Minnesota, is the biggest U.S.-based insurer.

WellPoint rose less than 1 percent to $93 at the close in New York. The shares have gained 50 percent in the last 12 months.

To contact the reporter on this story: Alex Nussbaum in New York at anussbaum1@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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