After spending the past two years working on a conversion plan, Blue Cross and Blue Shield of Colorado now hopes to postpone its proposed conversion to a for-profit company because of recent financial losses at the plan and volatility in the managed-care industry.
The 531,000-enrollee health plan last week asked the Colorado Division of Insurance to delay until September 1999 another round of hearings on the proposed conversion.
The hearings, set to begin this summer, will allow Insurance Commissioner Jack Ehnes to determine the company's worth in advance of an initial public offering.
By deadline, Ehnes had not yet ruled on the Blues' request for a delay.
The Blues want to delay the hearings because the plan doesn't believe the market is ripe for an IPO.
The conversion delay also would save the Blues additional costs to meet regulatory requirements, which already have topped $7 million.
Ehnes dealt a blow to the Blues in May when he ruled the health plan must shoulder most of the cost of converting to a for-profit company (May 11, p. 30).
The Blues had hoped to share those costs with a not-for-profit foundation that would be funded through the proceeds of an IPO if the conversion is approved.
Delaying the conversion will be a benefit to the foundation as well, said Blues spokesman Neil Westergaard.
"If we have to go to the market prematurely, it not only hurts us, but it hurts the foundation," Westergaard said.
According to the Colorado Division of Insurance, the Blues lost $30 million from March 1997 to March 1998.