Bloom Health Majority Stake Sold to Insurers
In an effort to compete with state-run health insurance markets that are set to open in 2014, three major insurers together have bought a majority stake in Minneapolis start-up Bloom Health-which operates a private health insurance exchange.
According to a Bloomberg report, Indianapolis-based WellPoint, Inc., which is the largest insurer in the country by enrollment, Blue Cross Blue Shield of Michigan, and Chicago-based Health Care Services Corporation have bought a 78 percent stake in the start-up for an undisclosed amount.
The three reportedly bought out two venture capital companies-Chicago-based Sand Box Industries and Blue Cross Venture Partners-that had invested in Bloom Health.
Bloom Health's health insurance exchange helps employees and individuals find suitable and cost-saving health insurance plans and health services. Under the 2010 health reform law, states will be required to set up similar online exchanges by 2014.
Bloom Health founder and CEO Abir Sen told the Star Tribune that not all employers are comfortable with state exchanges. “They don't know about customer service, they don't know what variety of plans will be there,” Sen added. “They'd prefer their employees stay in a private exchange that they can design or we can design for them, so they can limit their liability.”
In addition to a health insurance marketplace, Bloom Health provides expertise and tools to help employers figure out how much to spend on health care and how to control health care costs.
The company currently works with about 50 employers in Minnesota, Michigan, and Indiana and aims to be in all 50 states by 2012, according to the Star Tribune.
Sen-who will stay on as CEO-founded Bloom Health in 2009. Prior to that, he founded Minneapolis-based RedBrick Health, a provider of wellness plans, and Definity Health, a consumer-driven health plan provider that was sold to Minnetonka-based UnitedHealth Group.