M-CARE sale completed; no immediate changes to health coverage

Updated 9:30 AM January 10, 2007

M-CARE sale completed; no immediate changes to health coverage

By Kara Gavin, Health System Public Relations

On the last day of 2006, the M-CARE managed care organization, begun by the University 20 years ago, became part of Blue Cross Blue Shield of Michigan (BCBSM) and its Blue Care Network subsidiary.

The sale, which had been announced by the University and approved by the Board of Regents in September, received approval of the state Attorney General Dec. 29, allowing for the sale to be closed Dec. 31. The transaction previously had been cleared by the Michigan Office of Financial and Insurance Services and by the U.S. Department of Justice.

The sale will result in no immediate health coverage changes for the more than 60,000 U-M employees, graduate students, retirees, dependents and survivors who elected M-CARE during the recent benefits open enrollment period. They will continue to have coverage under the M-CARE name through 2007.

For 2008, the University will develop replacement health plans designed and funded by U-M and administered by the Blues. The University remains committed to offering a competitive benefits program that will allow continued recruitment and retention of the very best faculty and staff. More information on these plans will be made available in coming months.

The sale has two parts. M-CARE and its subsidiary M-CAID will become part of the Blue Care Network. M-CARE's subsidiary, Michigan Health Insurance Corp., which administers M-CARE's variety of preferred-provider plans or PPOs, will become part of BCBSM.

Since the sale was first announced, most M-CARE employees have been offered either employment at BCN under a lease agreement from U-M, or full employment by BCN. A total of 133 employees thus far have been offered full employment positions at BCN, and some 200 others have been offered employment under a lease agreement, most of them for six months or more. At the end of their leases, the employees will be notified of their upcoming layoff and will receive assistance with the transition to other positions at the University or in the community.

M-CARE members outside the University community will experience no interruption in their health coverage, and will receive coverage under the M-CARE name for the duration of their employer or group contract throughout 2007. M-CAID members will continue to receive coverage under the current Medicaid contract that M-CAID has with the state of Michigan.

The decision to sell M-CARE will allow the U-M Health System (UMHS) to direct its resources toward its core missions of patient care, research and education. The sale also will lead to the formation of a joint venture between UMHS and BCBSM that will foster a variety of health care research and quality-improvement projects.

Further information on the sale and the joint venture is available at www.med.umich.edu/mcareupdate.

M-CARE sale completed; no immediate changes to health coverage

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