NU Online News Service, Oct. 8, 8:05 p.m. – The New York State Insurance Department has given Empire HealthChoice Inc., New York, permission to convert to for-profit status.
Empire, which does business as Empire Blue Cross and Blue Shield, would become a subsidiary of a new, for-profit, publicly traded holding company, WellChoice.
A new charitable organization would start out owning 5% of the stock, and a government-controlled “public asset fund” would own 95% of the stock.
The fund and the charitable organization would then sell some of their shares through an initial public offering that would turn “WellChoice” into a publicly traded company.
Several other states have asked nonprofit health care organizations under their jurisdiction to use the proceeds from conversions to fund health care charities, but New York state plans to use most of the Empire/WellChoice IPO proceeds to finance government operations.
The New York department granted its approval after reviewing 500 written comments and letting public officials, members of the public and representatives from 16 consumer advocacy groups speak at a hearing in August.