Kansas and Hawaii Blues have invested in Stellarus, Blue Shield of California’s health tech sister company.
Stellarus was established earlier this year as part of Blue Shield of California’s restructuring to provide services to nonprofit plans that lack the resources to develop them independently.
Dive Brief:
- Stellarus, launched by Blue Shield of California, helps nonprofit plans compete with well-capitalized for-profit peers.
- Blue Cross Blue Shield of Kansas and Hawaii Medical Service Association join as partners, adopting Stellarus’ tech platform.
- The platform features a comprehensive data hub supporting member engagement, prior authorization automation, and a digital health record.
- Both new partners will take ownership stakes and receive one board seat each at Stellarus.
- Financial terms were not disclosed, but each partner made significant financial and strategic commitments to support Stellarus’ growth.
Dive Insight:
In January, Blue Shield of California reorganized its structure to strengthen its financial position, establishing a new parent company, Ascendium, to oversee its payer operations, clinical services firm Altais, and Stellarus.
Stellarus’ platform integrates over 60 datasets—including clinical, claims, and demographic information—into a unified hub that supports tools such as member communications, population health management, and payment integrity, according to the company.
Additionally, Stellarus promotes Blue Shield’s innovative pharmacy care model, which outsources pharmacy benefits management to multiple vendors as a strategy to reduce costs.
Known for its bold efforts to control cost growth for its 6 million members, Blue Shield aims through Stellarus to provide services to other Blues plans that lack the resources to develop similar capabilities on their own.
Thursday’s announcement marks progress toward this goal, with Blue Cross Blue Shield of Kansas and Hawaii Medical Service Association—each serving roughly 1 million members in their states—joining Stellarus as early adopters.
Executives from both organizations noted that their investment in Stellarus will strengthen their technology capabilities while preserving their local independence.
“Given Hawaii’s size and geographic location, we stand to benefit by enhancing our innovation capabilities and expanding our technological resources through investing in Stellarus alongside like-minded, mission-driven nonprofit health plans that share similar goals and challenges,” said Dr. Mark Mugiishi, CEO of HMSA.
“By partnering with Stellarus, we’re joining forces with other nonprofit plans to create a modern, connected system designed to make healthcare simpler, more affordable, and more personalized,” added Matt All, CEO of Blue Cross Blue Shield of Kansas.
A Stellarus spokesperson noted that this collaboration will help nonprofit Blues plans lower administrative and healthcare costs, enabling them to compete in a challenging market, especially against large national payers with greater resources to absorb rising member costs and invest in technology modernization.
The insurance industry is currently facing difficulties, with profitability declining as Americans increasingly seek more frequent and costly medical care. According to the National Association of Insurance Commissioners, insurers’ average profit margins fell from 2.2% in 2023 to just 0.8% in 2024.
While Stellarus is still in its early stages, it has a wide potential client base: 32 of the 33 independent Blues plans are nonprofit, along with other nonprofit U.S. insurers who may be interested in partnering to access technology solutions they cannot develop internally.
A Stellarus spokesperson declined to provide further details on client demand or the company’s financial performance, including its profitability.
Blue Shield of California itself generates over $27 billion in annual revenue and reported a net income of $103 million last year.
