What is the change being proposed by Horizon Blue Cross Blue Shield of New Jersey (BCBSNJ)?
Horizon BCBSNJ is pursuing an effort to modernize our corporate structure to a not-for-profit mutual holding company. This is a technical change to how we are legally organized that will better enable us to deliver on our member-focused mission and drive health care forward in New Jersey. This change will require an update to the laws that apply to our structure.
The proposed change is a common structure adopted by many others. Blue Cross Blue Shield plans in 18 other states are organized as a mutual company. Horizon BCBSNJ has decided to evolve to a not-for-profit mutual in order to work harder for our members, while driving health care affordability, simplicity and quality.
What will change in this new form?
We will continue to be a not-for-profit, and our mission and core health insurance business will remain the same. Modernizing Horizon BCBSNJ’s corporate form gives us greater strategic flexibility to keep members healthier and ultimately drive down the cost of care.
Under this mutual form, we will also preserve and strengthen our nearly 90-year legacy as a New Jersey health insurer that is not-for-profit and therefore focused on its members rather than on shareholders, as is the case with for-profit insurers. Importantly, this new law will strengthen the guarantee that Horizon remains forever a not-for-profit that exists for the benefit of its members. This change means that Horizon cannot be sold or change to become a for-profit company that is owned by shareholders or investors. Horizon’s commitment to remain a not-for-profit, mission-oriented company that serves only the interests of our members is unwavering.
Why does Horizon BCBSNJ need to change its corporate form?
As this year has proven, we must be ready for anything at any time. Almost overnight, the COVID-19 pandemic reminded us how quickly things can change and that by adapting quickly we can be there when members need us most. Having the operational flexibility to be agile beyond crisis situations will allow us to continue working hard for them and give us more opportunities to drive health care affordability, simplicity and quality.
However, our current corporate form as a health services corporation was built for a different time. It restricts our ability to make the necessary investments that will allow us to harness the resources we need to make health care work better for our members – like providing data that give doctors a holistic picture of their patients’ health or technologies that address a patient’s physical and behavioral health needs.
Instead, restrictive rules that are unique to Horizon BCBSNJ control how much the company can invest in our members’ health – including in ways that would allow us to keep health care costs under control and bring better health outcomes to New Jersey residents.
Restrictions that currently apply to Horizon BCBSNJ:
- Strict limits on the size of investments we can make – no matter how beneficial to our members
- A ceiling on the mix of business outside of traditional commercial insurance services – even from critically important state services, such as Medicaid, and senior care, such as Medicare
- A much higher tax rate on our members’ premiums compared to other insurers doing business in New Jersey
By amending the law that currently applies to us, Horizon BCBSNJ can shed these restrictions and invest more on behalf of our members to drive the future of health care forward in New Jersey.
How will changing to a not-for-profit mutual allow you to better serve your members?
Modernizing Horizon BCBSNJ’s corporate form better positions us to make sure we’re always here for our members and their health. We will be able to accelerate investments in technologies and innovations that improve health care quality, cost and convenience.
We are exploring investments in multiple areas:
- Member-facing technologies such as health care wearables, expanded telemedicine, including access to mobile behavioral health consultations, mobile pharmacies, and other innovations that will make our members’ experiences easier, faster and more affordable
- Additional products and services for our members such as dental plans, greater senior care, student insurance and stop-loss
- Programs for underserved populations including joint ventures to deliver care to underserved communities (e.g., programs to address social determinants of health) and behavioral health initiatives
- Data and analytics for providers we do business with, to further affordability and quality of care, as the industry moves toward value-based payments and more integrated care
- Medicare Advantage and other senior care solutions to expand our reach and offerings to New Jersey’s senior population
How will a change to your corporate structure better serve the state of New Jersey?
As an anchor institution in New Jersey, we care about improving the health of New Jersey residents and also the economy. We are proud to employ more than 5,000 people. Through this modernization, we would be able to further expand our contributions to the State, while also serving members and contributing to building a healthier economy, generating more opportunities and revenue for the entire State. Independent research firm, Econsult Solutions Inc. (ESI), projects the added flexibility from this modernization will raise economic output and generate new investments that could mean more tax revenues across the State.
In fact, similar changes in other states like Florida and Michigan saw member services expand with more economic activity. Additionally, the rate of uninsured residents in both Florida and Michigan decreased faster than the national average.
Why modernize Horizon BCBSNJ’s corporate structure now?
As we’ve learned during the COVID crisis, things can change in an instant, and our members rely on us to be there when they need us. During the crisis, we delivered on that expectation by eliminating out-of-pocket costs for COVID-related testing and care, expanding telemedicine benefits and providing free counseling for people feeling stressed, anxious, or depressed. We also helped employers preserve health coverage for their employees.
We want to continue delivering on our members’ expectations beyond the current crisis. With new strategic and operational flexibility, Horizon BCBSNJ can:
- Make care more affordable with new services and technologies that keep people healthy and out of the doctor’s office.
- Give doctors a holistic picture of their patients’ health and ensure our members have access to both physical and behavioral health services.
- Grow programs that address social determinants of health – such as transportation to doctor appointments and access to healthy food options – to improve the health of underserved communities.
- Work together with doctors to use data insights to improve the quality of care, help reduce chronic diseases in New Jersey and rein in healthcare costs.
- Help contribute to building a healthier NJ economy, generating more opportunities and revenue for our entire state.
As New Jersey’s not-for-profit health insurer, we have already made critical investments to meet our members’ needs, but to keep pace and deliver on our members’ expectations, we need to do more. A not-for-profit mutual holding structure will give us the flexibility to continue working hard for our members and provide more opportunities to drive health care affordability, simplicity and quality.
What is the process for this proposed new corporate form?
Evolving Horizon BCBSNJ's corporate form means amending a law that currently governs Horizon. We are working closely with state leaders to pass legislation that will effectuate this change. Amending our laws would unlock a more modernized structure as a not-for-profit mutual holding company, a form used by Blue Cross Blue Shield plans in 18 other states.
Importantly, this new law will strengthen the guarantee that Horizon remains forever a not-for-profit that exists for the benefit of its members. This change means that Horizon cannot be sold or change to become a for-profit company that is owned by shareholders or investors. Horizon’s commitment to remain a not-for-profit, mission-oriented company that serves only the interests of our members is unwavering.
Will this change member benefits? Will members still be able to use their doctors and hospitals?
Modernizing Horizon BCBSNJ’s corporate form will give us the flexibility to continue working hard for our members and provide more opportunities to drive health care affordability, simplicity and quality. The corporate form change will not affect our members’ health plan benefits and current choices of doctors and hospitals. This change will give Horizon new tools to improve our products and services in the future so that we can better serve our members and meet their changing health needs.
Will this change the products and services you offer?
Current products and services will not be affected. Under the new corporate structure, we will be more agile, with greater strategic and operational flexibility to make care more affordable with new services and technologies that keep people healthy and out of the doctor’s office.
We are currently exploring investments in member-facing technologies such as wearables; additional products and services such as dental and student insurance; programs for underserved populations, including in critical areas such as behavioral health initiatives; improved data and analytics for providers; and expanded Medicare Advantage programs.
Will this raise premiums?
No, this change will not affect premiums. Our goal is that longer-term, our ability to make greater investments in important health care solutions will help improve service and quality and keep premiums affordable.
Will this change the way Horizon BCBSNJ works with my doctors and hospitals?
No.
