New Jersey lawmakers introduced a bill that would change Horizon Blue Cross Blue Shield’s corporate structure in what they said would give the company more flexibility to invest in technology and social programs.
Horizon officials said converting from a nonprofit health services company to a nonprofit mutual holding company would have no impact on its customers. But they said it would help them compete with other insurers.
Kevin Conlin, Chairman, President and CEO of Horizon, said in a statement that the change “gives us the flexibility to accelerate the pace and scale of investments that will help us continue to offer our members facing a rapidly changing health care market.”
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Newark-based Horizon is the state’s largest health insurer with about 3.8 million members. It reported revenue of $13 billion and net operating income of around $56 million in 2018.
The bill comes as insurers and providers come under political pressure to rein in rising health care costs.
Horizon said it was trying to do just that. He touted a transformation in which he works more closely with providers to deliver care in communities. And it has invested in digital technology that allows patients to connect with doctors and nurses through their apps.
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Horizon was established by the state in 1932 as a non-profit organization that was an insurer of last resort, covering residents regardless of their medical condition. Since then, the state and the United States have required all insurers to provide coverage, regardless of their pre-existing conditions.
In the 2000s, the company considered converting to a for-profit business, but did not follow through.
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A bill introduced by Assemblyman John McKeon, D-Essex, Morris on Monday would allow Horizon to transition to a nonprofit mutual holding company, similar to Blue Cross Blue Shield plans in 18 other states.
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State Senator Stephen Sweeney, D-Gloucester, said he supports the change.
“These changes will allow New Jersey’s only nonprofit health insurer to modernize its organization so it can invest more in member benefits, including consumer technology and preventative care,” he said. in a press release. “For those who depend on Horizon, this change will allow the company to continue to provide the highest quality healthcare in the future.”
Horizon officials said the company is currently crippled by regulations specific to its current structure – and a higher tax rate than its competitors – that prevent it from investing as much as it needs to improve. the health of its customers.
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The company’s board would continue to have what it said was significant public representation that included more members appointed by the Governor, the Speaker of the Senate, and the Speaker of the Assembly.
Consumer advocates have not been so quick to offer support.
Maura Collinsgru, health care expert at New Jersey Citizen Action, said she wondered what a conversion would mean for the company’s reserves.
“It’s a huge change from our largest insurer,” she said. “This bill should be given serious deliberation, and all stakeholders, including advocates and consumers, need to really digest what it is.”
Michael L. Diamond is a business journalist who has written about New Jersey’s health care industry for a decade. He can be reached at 732-643-4038; firstname.lastname@example.org; and @mdiamondapp.