Alliance Blue Cross and Blue Shield is buying Cragin American Insurance Co. from LaSalle Bank. The purchase will give the St. Louis-based Blues plan access to 1 million potential managed-care customers in southern Illinois.
Cragin is based in Chicago and is chartered to underwrite health and life insurance. Alliance is the for-profit subsidiary of Blue Cross and Blue Shield of Missouri.
Alliance already acquired a significant provider network in Illinois when it bought HealthLink last year. The HealthLink HMO was partially owned by Blue Cross and Blue Shield of Kansas City (Mo.), but Alliance recently has received permission to buy out the Kansas City portion.
Illinois regulators must approve the Cragin purchase. Alliance hopes to have a PPO product on the market by early 1997.
"Geographic expansion into southern Illinois, a market underpenetrated by managed care, is a move we established as a priority," said Frederic C. Brussee, Alliance president and chief operating officer.