By Todd Cohen
A revised plan by Blue Cross and Blue Shield of North Carolina to become a for-profit business has been approved by its own board and by the Blue Cross and Blue Shield Association, which owns the “Blue Cross” and “Blue Shield” names and trademarks.
The new plan, which overcame objections to a previous plan by a committee of the association, now will be submitted to state regulators charged under state law with deciding whether to approve the conversion.
Blue Cross, which on Sept. 17 informally submitted its new plan to the Department of Insurance and the Department of Justice, will meet Sept. 23 with officials of both departments before formally submitting their plan.
Public hearings on the plan are scheduled for October in Asheville, Raleigh and New Bern.
Blue Cross says the new plan gives it “sufficient ability to run our business, while still protecting the interests” of a charitable foundation the conversion would create.
Under state law, the foundation initially would own all the foundation’s stock, which could be worth $1 billion to $3.5 billion, according to estimates.
Regulators criticized Blue Cross’ previous plan for not giving the foundation enough say in the company’s big business decisions or allowing it to protect the value of its shares.
The association’s committee had voted not to approve the previous plan because it would have given the foundation too much say in Blue Cross’ business decisions.
In addition to approving the North Carolina conversion, the association’s board on Sept. 19 also approved the conversion of Empire Blue Cross and Blue Shield in New York – a conversion on which Blue Cross in North Carolina has modeled its new plan.