NJ Biz

Horizon Files To Become For-Profit

NJBIZ — Friday, August 15, 2008

By Thomas Gaudio

In an expected move, health care insurer Horizon Blue Cross Blue Shield of New Jersey said today it has filed an application with the state to convert from a not-for-profit corporation to a for-profit company. Trenton could reap at least $1 billion from the transaction.

The Medical Society of New Jersey, a physician trade group based in Lawrenceville, in June came out against the conversion, arguing it would benefit the state and Horizon while reducing health care quality for patients.

Newark-based Horizon said the move is a response to the nation's rapidly changing health care system. The application process will be used to gauge whether such a conversion is practical and can satisfy the company and its 3.6 million members. If the insurer is allowed to operate as a for-profit entity, the state's health care system would improve without taxes being raised, said Horizon.

A conversion would trigger the creation of a charitable foundation that would get 100 percent of Horizon's value at the time of the transaction, estimated to be at least $1 billion, the insurer said. By law, the money would be used to expand access to quality and affordable health care.

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