Governor Andrew Cuomo perhaps knows something about one of the state’s largest insurance companies that the company itself doesn’t know – that it could be sold as soon as next year.
Like his predecessors — dating all the way back to Governor George Pataki — Cuomo has expressed interest in the conversion of Emblem Health from a non-profit to a for-profit company. When conversions of this type occur, they spin off large sums of money, most of which goes to the state.
As part of the five-year plan that accompanied the 2012-2013 budget on Tuesday, the governor’s office said it doesn’t expect Emblem to turn commercial in the coming fiscal year, but does in the following three years.
“The Executive Budget assumes no proceeds from a health care conversion in FY 2012, but counts on proceeds of $250 million in FY 2013 and $300 million in FYs 2014 and 2015,” the budget states.
Cuomo’s office declined to say why officials believe such a deal could yield a quarter-billion dollars next year.
Ilene Margolin, a spokeswoman for Emblem Health, said there’s “nothing to report” and “nothing imminent.” She said the conversion of Emblem Health is in the same place it was in 2008, when the company sought and received a green light from state government, before the recession put the deal on hold indefinitely.
Emblem Health was formed from the 2006 merger of the insurance companies HIP and GHI. It covers 2.9 million people, many of them employees of New York City, according to its most recent annual report.
The city attempted to block that merger in court, arguing the merger would lead to less competition and higher costs, and has also objected to the for-profit conversion. Last month, Mayor Michael Bloomberg said he was prepared to drop the objection, if the city was consulted in the deal and got assurances that it wouldn’t lead to higher insurance premiums.
“We just want to be sure that our costs don’t go up,” Bloomberg said on his weekly radio appearance on WOR on December 23. “The governor and I have talked about this, and our staffs are working on it...if we could find some way to protect the city for a while, then we would not — certainly wouldn’t — stand in the way. In fact, we’d be helpful in getting the deal done.”
On Wednesday, Bloomberg’s office declined to elaborate further on whether a deal is expected anytime soon.