New Jerseys largest insurer, Horizon Blue Cross and Blue Shield, filed an application with the states attorney general and Banking and Insurance Department to convert from not-for-profit to for-profit corporation.
The Newark-based insurer said in its application that the switch will give Horizon financial flexibility and greater access to capital for information technology and pay-for-performance initiatives and for business operations. The Blues plan said investment during the next five years will exceed its annual $35 million budget by an estimated $20 million to $30 million per year. Conversion will allow the insurer to remain competitive and maintain its credit strength, the application said. Horizon holds 46% of New Jerseys market, according to the document.
Our board of directors has decided to reconsider conversion at this time because our nations healthcare system is undergoing a rapid transformation, William Marino, Horizons president and chief executive officer said in a written statement. Many reform proposals at the state and federal levels are calling for significant changes in healthcare in the near future.
New Jerseys banking and insurance commissioner and its attorney general must approve the deal, which will transfer Horizons market value to a not-for-profit healthcare foundation, as required by law. The commissioner and attorney general have 60 days to review the application for missing information. After public hearings, the commissioner must reject or approve the deal within 45 days. -- by Melanie Evans
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