N.J. Blues File Conversion App

By Staff Writer

August 15, 2008 at 10:19 AM

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The parent of Horizon Blue Cross Blue Shield of New Jersey, a nonprofit health service corporation, is asking the state of New Jersey for permission to become a for-profit company.

Horizon Healthcare Services Inc., Newark, N.J., which providers or administers health coverage for 3.6 million people, says a state law enacted in 2001 requires that the proceeds from any conversion go to an independent charitable foundation that would work to expand access to quality, affordable health care.

Horizon Blue is hoping that a conversion could lead to a conversion charitable contribution of at least $1 billion, according to Horizon Blue President William Marino.

Marino contends that a conversion also would give Horizon Blue more flexibility to invest in improving and expanding its services.

"Through the application process, we will be able to determine whether conversion is practical and whether it can be accomplished on satisfactory terms for our members and our company," Marino says in a statement.

Many companies, such as banks, have had difficulty raising capital on Wall Street in recent months due to the turmoil in the investment markets, and some have seen share prices drop to less than $10. Stock prices of most health carriers have fallen less sharply.

Shares of WellPoint Inc., Indianapolis, a major for-profit Blues plan consolidator, are selling for about $57 per share, down from a range of $70 to $80 per share that prevailed from most of July 2005 until earlier this year.

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