Horizon BCBSNJ Converts to a Not-for-Profit Mutual Holding Organization

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Horizon Blue Cross Blue Shield of New Jersey (Horizon BCBSNJ), the not-for-profit health insurance carrier that covers nearly one-third of all New Jersey residents, just received the state’s permission to broaden its business portfolio and reduce its tax burden, operating more like its for-profit competitors.

The corporate change means Horizon will immediately gain access to $300 million to form for-profit subsidiaries and pursue options such as investing in technology and buying physicians practices.

Horizon BCBSNJ is leading the transformation of health care in New Jersey by working with doctors and hospitals to deliver innovative, patient-centered programs that reward the quality, not quantity, of care patients receive.

Horizon BCBSNJ, the largest health insurer in the state, has 3.6 million policyholders. One-third of Horizon’s customers are on Medicaid, the state and federally funded insurance program for low-income and disabled people. Horizon was created as a not-for-profit health services corporation that at one time was considered the insurer of last resort for people with no other means to receive coverage.

Gov. Phil Murphy signed a law in December 2020 that established a path for Horizon to change its governing structure and allow the $13 billion not-for profit to act more like its for-profit competitors.

In exchange for the state allowing Horizon to reorganize, the company has committed to paying the state $1.25 billion over 25 years to soften the blow of losing other tax revenue the Newark-based company has provided.

Horizon has promised to maintain its provider networks for the small group and individual policy holders, continue serving policyholders in all 21 counties and expand the availability of its Medicare Advantage plans. The company also said it intends to lower prescription drug costs and increase opportunities for mental health and substance use treatment.


Comprehensive detail on each BCBS Plan available in its 2022 Annual Review


Takeaway: Local Blue Cross Blue Shield organizations are often the leading insurer in the states where they operate, making the corporate structure difficult to convert