Move May Also Help to Fund Universal Health Coverage in New Jersey, According to Report from HealthLeaders-InterStudy NASHVILLE, Tenn., Sept. 23
NASHVILLE, Tenn., Sept. 23 /PRNewswire-FirstCall/ --
HealthLeaders-InterStudy, a leading provider of managed care market
intelligence, reports that, if approved, conversion by Horizon Blue Cross Blue
Shield of New Jersey to for-profit status may prompt the plan to adopt a more
conservative approach to pricing. According to Blue Profiler: Horizon Blue
Cross Blue Shield of New Jersey, Horizon has successfully secured market share
from competitors over the past two years with aggressive pricing. This
approach will likely change with conversion as shareholders will demand better
margins than the company's existing 2.1 percent return.
"Not-for-profit Blue plans have traditionally been successful in growing
market share in regions where there is a large for-profit plan presence," said
Rick Byrne, analyst with HealthLeaders-InterStudy. "Horizon is no exception,
growing enrollment throughout all of its products with aggressive pricing and
market strategy."
Horizon, New Jersey's largest insurer, currently serves 46 percent of the
insured lives in the state, and more than 33 percent of New Jersey's
commercial market. In general, states limit reserving capability of nonprofit
insurers, keeping their rates low. If the conversion is approved, Aetna and
UnitedHealthcare -- the number two and three insurers in the state,
respectively -- will likely feel less pressure from Horizon on price.
Horizon previously considered for-profit conversion, first filing and then
withdrawing an application in 1996. In 2001, legislation passed in New Jersey
enabling Horizon to convert to for-profit status, and stipulating that all
stock assets of the company be placed in an independent foundation dedicated
to expanding access to affordable coverage for the uninsured. According to
HealthLeaders-InterStudy's Summer 2008 TriState Health Plan Analysis, momentum
for the conversion was established earlier this year when lawmakers rallied
behind a phased approach to universal health care. The state estimates that
subsidizing universal coverage will cost New Jersey around $1 billion.
"Horizon's conversion could be a source of funding for the state's
universal coverage initiative," noted Byrne. "As this is an attractive
proposition for the state, the conversion effort will very likely be a
success."
About Blue Profiler
Blue Profiler offers the most comprehensive analysis of the nonprofit Blue
Cross Blue Shield plans. Each report focuses on an individual nonprofit Blue
plan and includes valuable analysis that will allow companies to more
effectively partner with these dominant organizations. Each report includes
information on:
-- Competitive analysis
-- Enrollment trends
-- Company-wide financials
-- HMO financials
-- Consumer-driven products
-- Medicare strategy
-- Pharmacy
-- Disease management
About HealthLeaders-InterStudy
HealthLeaders-InterStudy, a Decision Resources, Inc. company, is the
authoritative source for managed care data, analysis and news. For more
information, please visit http://www.HealthLeaders-InterStudy.com.
About Decision Resources, Inc.
Decision Resources, Inc. is a cohesive portfolio of companies that offers
best-in-class, high-value information and insights on important sectors of the
healthcare industry. Clients rely on this analysis and data to make informed
decisions. Please visit Decision Resources, Inc. at
http://www.DecisionResourcesInc.com.
All company, brand or product names contained in this document may be
trademarks or registered trademarks of their respective holders.
Lisa Osgood Elizabeth Marshall
HealthLeaders-InterStudyDecision Resources, Inc.
781-296-2606781-296-2563
losgood@hl-isy.com emarshall@dresources.com
SOURCE HealthLeaders-InterStudy
