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Bill Gracey of BlueCross/BlueShield

BlueCross BlueShield of Tennessee is moving Chief Operating Officer J.D. Hickey into the health insurer's top spot when CEO Bill Gracey retires at the end of August.

Hickey, 44, who has a medical and a law degree from Duke University, was chosen CEO-elect by the board of directors in June, according to the Chattanooga-based company.

He joined BlueCross in 2011 as chief of the BlueCross Medicaid managed-care subsidiary BlueCare Tennessee and was named COO a year later.

Gracey, 61, became CEO of Chattanooga's largest private employer in January 2013 when former chief Vicky Gregg retired.

Gracey began work at BlueCross in October 2010, being tapped as president and COO after having first served on the company's board.

Bill Kilbride, the Chattanooga Area Chamber of Commerce's CEO, said the health insurer has "a deep bench."

"They have the right people at the right jobs at the right time," he said about the company that has about 4,200 employees in Chattanooga.

Gracey said it's a good time to "pass the torch to J.D. and team."

"I'm very proud of what we've accomplished in the past few years and the extremely capable leadership we've put in place to continue the company's success," he said.

Hickey, who was a member of former Tennessee Gov. Phil Bredesen's cabinet and TennCare Bureau director from 2004 to 2006, said he's grateful for the confidence the board has placed in him.

"Our team, senior leadership and everyone throughout the organization, has successfully navigated unprecedented change in our industry, always with the best interests of our members in mind. And our mission of providing peace of mind through better health will continue to guide our work," he said.

Betty DeVinney, the BlueCross board chairwoman, said Hickey has proven himself to be a highly capable leader throughout his time at the company.

"He's consistently driven innovation throughout our organization, while at the same time continuing our commitment to service excellence and affordability. Our board of directors is confident that J.D. is the right person to lead the company at a time when health care continues to change at a rapid pace," she said.

BlueCross earned $199.7 million during 2014 on total revenues of $10.8 billion, according to company filings with the Tennessee Department of Commerce and Insurance.

The not-for-profit insurer said it lost $141 million on its health exchange plans sold under the Affordable Care Act due to heavier-than-expected health care claims by the Tennesseans it covered under the new Obamacare plans.

BlueCross' tax bill also jumped 72 percent to a record high $463 million last year, largely due to new taxes levied under provisions of the Affordable Care Act.

But BlueCross offset those losses and extra costs with income from its commercial insurance, Medicare and TennCare businesses and the gain from the sale of the information technology company it uses, TriZetto.

Kilbride said Gracey has had a varied career and done a lot for the health care industry.

"If you're at a business meeting and you've got to make a decision about something, you'll get the straight-up and smart and thoughtful input from Bill," the chamber chief said.

Kilbride said he's impressed with Hickey's grasp of health care.

"He's an expert at it," he said. "I've seen him quote numbers off the top of his head, and his grasp for that business is incredible."

Contact staff writer Mike Pare at mpare@timesfreepress.com or 423-757-6318.

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