The Arkansas Blue Cross & Blue Shield building in Little Rock (Michael Pirnique)
Arkansas Blue Cross & Blue Shield announced Thursday that it is working with a Portland, Oregon, health care company on a “strategic affiliation agreement.”
The affiliation model ABCBS is exploring with Cambia Health Solutions “is designed to retain local presence and governance while also providing potential for faster innovation and the cost benefits of shared resources,” ABCBS said in a statement to Arkansas Business.
The nonprofit health insurer said the agreement has not yet been finalized and would be subject to regulatory approval in Arkansas, which could take several months.
“Until an agreement is signed, we can’t speak to details of the proposed affiliation, including leadership roles,” the statement said.
But the nonprofit health insurer said that the agreement with Cambia is “not a merger or acquisition.”
Arkansas Business first reported the talks with Cambia in January.
Cambia has said that it is dedicated to transforming health care. “We put people at the heart of everything we do as we work to make the health care system more economically sustainable and efficient for people and their families,” it said.
Cambia serves more than 3.6 million people through its regional health plans.
In August, Cambia and Blue Cross Blue Shield of North Dakota announced a strategic affiliation to “better serve members with access to care that’s simpler and more affordable,” according to a joint news release. “The affiliation will unify all operations and enable the organizations to share best practices for local plan innovation and services, deliver personalized member experiences and leverage Cambia’s robust technology infrastructure.”
The announcement comes at a time when health insurance companies have been struggling financially.
ABCBS, citing a rise in health care costs, reported a loss of $226.2 million for 2024, compared with net income of $13.2 million in 2023.
Curtis Barnett, president and CEO of ABCBS told a group at the Rotary Club of Little Rock on Tuesday that 2024 was a challenging year for the company. But “this year, we’re in a much better position,” he said. For 2025, ABCBS is projecting it will have a “slight loss” or it might be closer to breaking even, Barnett said.
The company attributed the loss to a rising number of medical services for its members and higher costs for outpatient surgery and hospital services. In addition, ABCBS has seen an increase in “high-dollar” claims and prescription drug costs for weight-loss medications, cancer drugs and other specialty medicines.
“Health care is changing quickly,” ABCBS said in the statement on Thursday. And it “is always looking for ways to bring more value to our members and to ensure we continue to be well-positioned to serve our communities now and into the future.”
ABCBS said that its members will continue to use their current insurance cards, provider networks and maintain their existing coverage.
Since 2021, ABCBS has been working with Cambia, Blue Cross & Blue Shield of North Carolina and BlueCross BlueShield of Tennessee as part of the Echo Innovation Alliance, which was formed to support the development of innovative products and services to improve health.