New Jersey Governor Chris Christie wants to use reserve funds from the state’s largest insurer, Horizon Blue Cross Blue Shield of New Jersey, to pay for other state programs.
Opponents of his proposal say the move would amount to a tax on Horizon policy holders. Democratic gubernatorial candidate Phil Murphy released a statement yesterday opposing the plan.
“I welcome all efforts to have a robust and transparent conversation about how we ensure all New Jerseyans have access to affordable, high-quality health care,” Murphy said. “As I have said previously, I have serious concerns with the governor’s proposal to raid Horizon’s surplus at a time when Republicans in Washington are threatening to gut the ACA. The Governor is now once again holding hostage funding for public education and critical programs in order to score a cheap political victory. While Democrats in the legislature have worked hard to find compromise, we simply need more time to give this policy a proper vetting.”
State Assembly Speaker Vincent Prieto said last week “that in no way shape or form” would he support the bill that would take $300 million from not-for-profit health insurance provider Horizon’s reserve fund.
Christie’s Horizon “transparency” measure would force the company to give up some of its surplus to fund drug treatment programs and other initiatives. The bill gives the New Jersey Department of Banking and Insurance the authority in 2017 to examine the size of Horizon’s surplus and deposit any amount deemed excessive into the state’s Health and Wellness Fund. The bill would also require that Horizon post information online about the compensation of its top officers.
Some legislators fear that a diversion of any money from Horizon would drive up premiums for the insurer’s 3.8 million policy holders.
“If reserves are considered to be in ‘excess,’ our first obligation should be to those who paid into those reserves, not taking their hard-earned dollars to create a special fund for whatever projects the Department of Banking and Insurance deems fit at the time,” Assemblywoman Elizabeth Maher Muoio (D-Mercer/Hunterdon) said. “Allowing this would essentially amount to a tax solely on Horizon policyholders to fund state initiatives.”
Horizon reported $11.5 billion in revenue and paid about $515 million in federal and state taxes and insurance assessments in 2015, according to the company’s website. The nonprofit held about $2.4 billion in reserves last year.
Last week, Christie said the New Jersey Department of Human Services had levied a $15.5 million fine on Horizon for “systemic” mishandling of thousands of claims over the past year and for misreporting some financial information to the state. He used the forum to renew his call for the transparency legislation.
The head of the Blue Cross Blue Shield Association said Christie’s bill all but advocates a takeover of Horizon and would give the state’s insurance commissioner too much authority.