Statement By Attorney General Eliot Spitzer Regarding The Proposed Conversion Of Empire Blue Cross And Blue Shield
When I reviewed Empire's original proposal to convert from a not-for-profit health insurer to a for-profit company, I determined that it violated two state statutes and did not adequately protect the interests of the people of New York.
After making this determination, my staff entered into discussions with Empire to negotiate amendments to the conversion proposal to make it fairer to New York taxpayers. Our goal throughout this process was to ensure that the people of the State -- who supported the not-for-profit health plan for six decades through tax exemptions, discounted hospital rates and other public subsidies -- were protected in the conversion.
After several months of discussions, Empire accepted our approach and we reached conceptual agreement last month on a modified conversion plan. Its terms included the creation of an independent nonprofit foundation that would hold the stock of the for-profit company in trust for the people of New York.
I am pleased that we have been able to reach this agreement with Empire, because the modified conversion plan addresses the financial needs of the company, while at the same time preserving the charitable assets for the benefit of the public.
Our agreement with Empire is now being reviewed by the national Blue Cross Blue Shield Association. The national association's initial response was encouraging, but it has not yet indicated whether it supports or opposes the amended proposal.
I urge the national Blue Cross Blue Shield Association to act quickly to approve the conceptual agreement that has been reached. In addition, the State Legislature still needs to amend the existing law to create a process for the conversion of not-for-profit health insurers in a manner that protects the public interest, so that Empire can obtain court approval of the conversion.
I am eager for this process to conclude, and will continue to work with the Empire, the national Blue Cross association, the State Legislature, the Governor and the Insurance Department to ensure that the process moves quickly and that the public interest is protected.