Two local corporations have merged to form Blue Cross and Blue Shield of the National Capital Area to jointly administer the previously separate health programs, the new company announced yesterday.
The merger, which took effect Jan. 1, joins Group Hospitalization, Inc. and Medical Service of D.C., which previously ran the Blue Cross and Blue Shield pre-paid health programs, respectively.
Blue Cross was created to pay hospital bills while Blue Shield traditionally handles doctors' bills. The two companies ran the programs together in the Washington area, employing the same personnel and sharing many administrative chores.
No cost savings -- and no changes in subscriber rates -- were expected from the merger because there was so little duplication between the two programs, a spokesman said. Clients will continue to pay one subscription charge.
The new joint organization administers hospital, medical and dental programs for more than 1.1 million local residents, including 490,000 federal employes and family members.
Based on 1984 operating results, the new corporation would have combined subscription income of more than $837 million and expects revenues to approach $1 billion in 1985.
The new corporation retains Blue Cross's federal charter and exemption from taxation and regulation by the District, a spokesman said.
Blue Cross and Blue Shield, originally created as separate organizations, have been merging operations nationally for more than a decade. The pace has accelerated in recent years and is being actively encouraged by the Blue Cross and Blue Shield Association, the coordinating agency for 90 such plans across the country, a spokeswoman said.
The two plans received approval for a merger in Maryland two weeks ago.