For more than 75 years, millions of New Jersey residents have trusted Horizon Blue Cross Blue Shield of New Jersey for their health insurance needs. We feel a special obligation to maintain that trust and to continue to be there when we're needed. This is one reason behind Horizon BCBSNJ's decision to file an application for conversion to a for-profit company. 
 
Our health care system is rapidly changing. Employers are looking to health insurers to provide customized analysis and health and wellness programs for their employees to reduce health care costs. Members are seeking more effective tools to evaluate costs and quality of care. And network health care professionals are seeking more efficient and real-time claims transactions. These demands require significant investment in order to meet the needs of all those we serve. 
 
Additionally, numerous reform proposals at the state and federal levels seek to significantly transform the health care industry. We believe that converting to a for-profit company, with access to capital markets, will give us the ability to invest in and acquire new capabilities to effectively meet the changing needs of our members, employers, and network hospitals and physicians. As New Jersey's health insurance market becomes more competitive, so must our company. 
 
Some people have raised concerns and questions about what our conversion will mean for New Jersey's health care system. This is appropriate and the conversion law requires a rigorous public process to evaluate our conversion. To further the public deliberations, we offer some facts in response to some of the concerns that have recently been raised. 
 

Question: What will Horizon BCBSNJ's fair market value be upon conversion? 
 
The market, not Horizon BCBSNJ, will determine the value of the company at the time of conversion. Any expert source attempting to value the company at this time is merely providing their opinion. No one can know the exact value until the company's stock is sold on the market. 
 
Horizon BCBSNJ has not offered a specific estimate on its value. Our press release about our conversion filing stated: "Under the law governing conversion, an independent charitable foundation must be created to receive 100% of the value of Horizon Blue Cross Blue Shield of New Jersey upon conversion, which could be more than one billion dollars." 

Question: Will the proceeds of Horizon BCBSNJ's conversion benefit the people of New Jersey? 
 
Yes. The conversion law states that an independent foundation - not state government - will receive 100% of the stock of Horizon BCBSNJ upon conversion. The law states that the independent foundation, governed by trustees, must use the proceeds for the "purposes of expanding access to affordable, quality health care for underserved individuals and promoting fundamental improvements in the health status of all New Jerseyans." 
 
Horizon BCBSNJ's conversion could generate more than $1 billion dedicated to improving our state's health care system without raising taxes. This will benefit the people of New Jersey. 

Question: Will Horizon BCBSNJ's conversion mean higher premiums and reduced benefits for our members? 
 
Health insurance premiums are a reflection of the underlying costs of health care (i.e., hospital costs, physician costs, utilization, new medical technology, and prescription drug costs). As these underlying costs rise, so will health insurance premiums. 
 
New Jersey is and will remain a competitive health care market. Horizon BCBSNJ must continue to provide quality products and services at competitive prices or it will lose customers. 
 
Virginia is one state where a Blue plan has converted to a for-profit health insurer. In a recent news article, Etti Baranoff, associate professor of insurance and finance, at Virginia Commonwealth University gave her opinion on fears of premium hikes: "In my mind, there shouldn't be any fear of rate increases." (8/16/08, Press of Atlantic City, Horizon Blue Cross applies to become for-profit insurer) 
 
Similarly, Horizon BCBSNJ will have to continue to balance the needs of its network hospitals and physicians for fair reimbursement for their quality services with its members' needs for access to affordable health insurance products and services. This obligation will not change upon conversion.  

Question: Will Horizon BCBSNJ drop its participation in Medicaid when it converts to a for-profit company? 
 
The decision to continue to participate in government-run programs is dependent upon whether or not the state government adequately funds Medicaid and FamilyCare. Horizon BCBSNJ could not stay in a government program that is losing money even as a non-profit. To do so would require its other members to subsidize the government program. This would essentially amount to a tax on our individual, small group and other private sector members. This is the case whether Horizon BCBSNJ remains non-profit or converts to a for-profit health insurer. 
 
Together, as we continue to explore Horizon BCBSNJ's conversion to a for-profit company, we have a unique opportunity to seek solutions for the challenges our state's health care system faces. We also have a unique opportunity to generate significant resources for improving our state's health care system without raising taxes. Let us make the most of this opportunity by focusing on facts and what's in the best interest of our company's members, our health care system and the people of New Jersey.