Empire Blue Cross Blue Shield : Non-Profit to Profit

Empire Blue Cross Blue Shield: Non-profit to profit status

INTRODUCTION

Empire Blue Cross and Blue Shield was one of the most popular and respected insurers of last resort in the United States of America. The fact that this insurance organization was a non-profit company enabled it to offer highly subsidized health insurance covers to the New York population; this greatly benefited low income earners who could not afford to pay the hefty insurance premiums charged by other for-profit organizations in New York. However, on 26th September 1996, Empire Blue Cross and Blue Shield made an official announcement that it was planning to convert from a non-profit organization to a fully-fledged for-profit company. This meant that the huge number of New Yorkers who had obtained individual health insurance cover from Empire Blue Cross and Blue Shield would have to seek alternatives which would more or less expose them to greater health risks. (Robinson, 2003) The only subscribers who wouldn’t be affected by Empire Blue Cross and Blue Shield conversion were the 850 policy holders who had permanent disability. This marked the start of an extensive legal, community and political tussle pitting the various stakeholders who had different kinds of interests in Empire Blue Cross and Blue Shield. Experts argued that this conversion plan was a reflection of the fast-rising competition in provision of health care not only in the State of New York but also throughout the United States of America. Other analysts suggested that Empire Blue Cross and Blue Shield’s conversion from a non-profit to for-profit company would only bring financial benefits but the organization would lose its commitment to social obligations. Before making a formal application to the State of New York Insurance Department, Empire Blue Cross and Blue Shield embarked on a...