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-InterStudy        Decision Resources, Inc.   781-296-2606                    781-296-2563   losgood@hl-isy.com              emarshall@dresources.com 

First Call Analyst:
FCMN Contact:

SOURCE: HealthLeaders-InterStudy

CONTACT: Lisa Osgood of HealthLeaders-InterStudy, +1-781-296-2606,
losgood@hl-isy.com; or Elizabeth Marshall of Decision Resources, Inc. for
HealthLeaders-InterStudy, +1-781-296-2563, emarshall@dresources.com

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