Under a 2001 state law, Horizon would have to compensate the state for years of tax breaks it received as a not-for-profit.
Horizon estimates more than $1 billion would become available to improve the state's health care system. Some estimates have put the value at up to $4 billion.
Consumer advocates and doctors worry premiums and the number of uninsured people in New Jersey would increase if Horizon converted.
The state must approve the switch, following a series of public hearings.