NJ's Largest Health Insurance Provider Becoming Private
Horizon Blue Cross Blue Shield, New Jersey's largest health insurer, on Friday filed to become a publicly held for-profit company, which could potentially provide the state $1 billion to spend on health care, the Philadelphia Inquirer reports. The insurer covers 3.6 million people, or about four in every 10 New Jersey residents, and is the largest insurer participating in the state's Medicaid program.
According to the Inquirer, Gov. Jon Corzine (D) has suggested that the move could help fund the expansion of public health programs, which both Corzine and the state Legislature support. The Inquirer reports that the value of the insurer in the open market -- which Horizon President and CEO William Marino estimated at $1 billion -- would go toward a charitable foundation that current law mandates would provide care for low-income residents. Marino in a conference call with reporters said, "We're optimistic that the benefit of creating a foundation of $1 billion or more and the benefits that that can provide the underserved population -- in other words, the good that that can do -- will be easily understood."
Marino said converting to a for-profit company would raise capital and allow for competition with other insurers. However, Michael Kornett, chief executive officer of the Medical Society of New Jersey, said, "The emphasis will go from patients and employers right to the shareholders." He added, "Their whole mission is going to change."
Horizon's application will be reviewed by the state Department of Banking and Insurance, which is required to hold a series of public meetings on the plan. Marino said he hopes a decision will be handed down during the first half of 2009 (Tamari/Burling, Philadelphia Inquirer, 8/16).
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