After 25 years of trying, Horizon Blue Cross Blue Shield of New Jersey, which provides health insurance to more than a third of the state's residents, is on the brink of pushing through the legislature a bill (S3218/A5119) enabling de facto for-profit conversion, or at least a stepping stone to such conversion. The bill has passed through key committees and is scheduled for a floor vote tomorrow (Dec. 17).
The complex bill, obviously written by Horizon executives, reorganizes the current nonprofit established by statute as a nonprofit -- but not charitable -- mutual holding company, with the insurer becoming a for-profit subsidiary, and the holding company empowered to create more for-profit subsidiaries, all of which can sell stock to investors. Horizon would pay $600 million up front to the state as compensation for a favorable change in its tax status, with a dubious commitment to contribute another $650 billion over nearly two decades, dependent on its degree of profitability. That money will go into the state's general fund -- not into a health foundation as in other states that have authorized conversion. Horizon has an estimated $7 billion in assets that as of now belong by statute to the people of New Jersey.
The state's dominant Democratic party is behind this legislation -- whether because of Horizon's powerful position in the state, credence lent to the company's happy talk about investment in new technologies and its existing charitable programs, or desperation for cash in the wake of the pandemic's devastation.
