Blue Cross and Blue Shield of Maryland plans to become the fifth Blues plan in the nation to form a for-profit subsidiary.
In documents filed with the state insurance commissioner, the Blues said it intends to set up a separate managed-care subsidiary, with a separate board of directors and a new management team. The new company, consisting of most of the Blues' employees, will take over its managed-care operations, which include five HMOs.
The Maryland Blues will offer 20% to 35% of the subsidiary's original 50 million shares to the public next spring and hopes to raise $40 million to $50 million in capital.
The restructuring will "create opportunities to grow, acquire and compete." Among other things, it will allow the Blues to obtain HMO licenses in two more states, the documents said.
The subsidiary also will provide managed-care services to the Blues' indemnity customers, the documents said.
The not-for-profit parent company and its foundation will continue to exist, and the restructuring will "fortify the foundation to truly serve charitable purposes," the documents said.
Restructuring will allow the company "to enhance its market position and to be responsive to competitive pressures without compromising (its) philosophy and direction," the company said in a formal statement. It wouldn't comment further on its filing with the insurance department.
Blues plans in California, Indiana, Missouri and Wisconsin have formed for-profit subsidiaries.