The University of Michigan Board of Regents on Friday approved the sale of M-Care, the insurance business of the University of Michigan Health System, to Blue Cross Blue Shield of Michigan.
The deal, which must be approved by state and federal regulators before it becomes final, calls for Detroit-based Blue Cross Blue Shield to pay $240 million. Officials expect the sale to be finalized in late 2006 or early 2007.
Under the agreement, announced Sept. 12, Blue Cross’ HMO subsidiary, Blue Care Network, will purchase the M-Care HMO plans and the Medicaid business, M-Caid. Blue Cross itself will purchase Michigan Health Insurance Corp., M-Care’s PPO subsidiary.
Ann Arbor-based M-Care is one of only a few university-owned health insurers in the country whose plans are open to outside employers and individuals. M-Care and Blue Cross officials have said that the approximately 200,000 M-Care members will see their current benefits continue after the sale with the option of renewing for 2007. After that, they will have to choose from Blue Cross’ plans.
Of the sale price, $10 million will go toward forming a new joint venture with the university to commission research studies and health care quality improvement projects.
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