TRENTON — Horizon Blue Cross Blue Shield is one gubernatorial signature away from finally gaining the chance to change its corporate structure, under a bill approved Thursday by the Legislature that would allow it to organize as a not-for-profit mutual holding company.

Horizon says the change will free it from restrictions on its spending that prevent it from investing in needed technologies. Critics say it allows the company to pursue for-profit ventures without properly compensating the state for the billions in value it accumulated over decades with preferential tax treatment due to its charitable mission.

Assemblyman John McKeon, D-Essex, said the change would be good for the company and its 3.6 million policyholders.

“Reptiles, they need to adapt to survive. Dinosaurs, if left as they are, will become extinct,” McKeon said. “I have no doubt that as robust as Blue Cross Blue Shield is today, if we don’t make these very important changes to allow them to compete, both the policyholders as well as ultimately the state of New Jersey will be very big losers.”

The bill was passed 23-16 by the Senate and 54-24 with one vote to abstain in the Assembly.

Republicans appeared not to object to Horizon’s restructuring but criticized the financial part of the proposal. If Horizon is allowed to restructure, it would pay the state $600 million by July 2022 and $625 million more over the 17 years that follow.

“I’ve got to be honest. If this was in the private sector, this would be called a shakedown, or a shakedown by organized crime,” said Assemblyman Hal Wirths, R-Sussex. “But in this case, it’s not organized crime shaking down Blue Cross Blue Shield. In this case, it’s the government.”

“This $600 million will go into a budget to defray some of the effects of that budget in a year when there just happens to be, by coincidence, the governor is running for re-election,” said state Sen. Gerald Cardinale, R-Bergen.

“And guess it will probably be going to,” said state Sen. Robert Singer, R-Ocean. “Giveaways, giveaways, giveaways.”

“Unfortunately, this bill is evidence that our colleagues on the other side of the aisle only care about affordable health care when there are political benefits and don’t care about affordable health care when there are none,” said Assemblywoman Nancy Munoz, R-Union, who said the money should be returned to Horizon’s policyholders.

Horizon would have to apply to the state Department of Banking and Insurance in order to change its corporate structure, which would come after a review process that includes public hearings. Company executives welcomed the approval of the bill, which they had worked on for three years.

“It achieves its goal of preserving Horizon’s historic member-focused mission while giving the company the flexibility to adapt and innovate to enable care that is more connected, more convenient and more affordable,” executive chairman Kevin Conlin and president and chief executive officer Gary St. Hilaire said in a joint statement.

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The bill prevents Horizon from merging with another insurer or converting to a for-profit company without legislative approval.

Still, critics such as Maura Collinsgru, health care program director for New Jersey Citizen Action, urged Gov. Phil Murphy to conditionally veto the bill.

“Despite Horizon’s overtures about ‘modernization,’ for-profit expansion of health care organizations has not been shown to increase affordability, so it is imperative we codify protections for these much-needed public health funds,” Collinsgru said.

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