Blue Cross agrees to divest of RightChoice

A resolution of litigation and regulatory issues between state officials and Blue Cross and Blue Shield of Missouri will result in a foundation to make health care available in the state. Blue Cross will divest itself of its for-profit subsidiary RightChoice Managed Care Inc.

Funding for new health care programs for qualified Missourians will come from the largest health care-focused foundation to be created by state officials and Blue Cross and Blue Shield of Missouri. The foundation will be managed by an independent, state-approved board, according to a release from BCBS.

The foundation is part of a conceptual framework for an agreement jointly proposed by Gov. Mel Carnahan, Attorney General Jay Nixon, Department of Insurance Director Jay Angoff and BCBS of Missouri.

"This is the right thing for Blue Cross to do," said John O'Rourke, president and chief executive officer of BCBS of Missouri. "It meets the needs of our members and the citizens of Missouri. It frees Blue Cross to focus on the future and ways to provide access to broader and better health care services for our customers."

The foundation would be created through a series of transactions in which BCBS of Missouri would contribute to the foundation its 15 million shares of stock in RightChoice Managed Care. The foundation would fund its activities through an orderly divestiture of the RightChoice stock.

RightChoice would retain voting rights to the shares until they are sold by the foundation. RightChoice Managed Care would become a consolidated, fully for-profit health insurance company and the direct licensee for the Blue Cross and Blue Shield names and trademarks.[[In-content Ad]]