New Jersey's Horizon Blue Cross and Blue Shield has filed with the state to convert from not-for-profit to for-profit status, in what it says is a bid to boost its financial options. In its filing with the state's attorney general and Department of Banking and Insurance, the health plan said that switching will give it more financial flexibility. In particular, it expects to gain greater access to capital for investment in information technology, pay-for-performance initiatives and business operations. These investments would exceed the plan's annual $35 million by a projected $20 million to $30 million per year during the next five years. The plan has already set aside $500,000 to help hospitals in its network bring up medical history technology.
Horizon's application comes under a 2001 law authorizing such conversions. Under its terms, proceeds from the first sale of stock in the new, for-profit company must be deposited in a public foundation that was set up to pay for insurance affordability programs and public health efforts. The payment is intended to pay back the state for the tax breaks Horizon got as a not-for-profit. The deal is projected to generate about $1 billion, down from an estimated $3 billion the health plan expected to generate for the state three years ago.
To learn more about the planned switch:
- read this Modern Healthcare piece (reg. req.)
- read this piece in The Star-Ledger
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