Press of Atlantic City

Our View: Don't Rush Restructuring Of Horizon BCBS, NJ's Biggest Health Insurer

Press of Atlantic City — January 2, 2020


At least half a dozen times the past couple of decades, Horizon Blue Cross Blue Shield has sought to convert from a nonprofit to a for-profit corporation.

Despite help from lawmakers and former Gov. Chris Christie, New Jersey's largest health insurer has remained nonprofit.

As a charitable health services corporation, Horizon is responsible to its 3.4 million members. And if it were to cash out by converting to for-profit status, state law requires a payment into a public trust that could be between $5 billion and $10 billion, according to an advocacy director for Consumer Reports.

A bill introduced recently in the state Assembly, however, would appear to make it possible for Horizon to convert to a nonprofit mutual corporation without such a trust payment. Other Blue Cross Blue Shield plans in 18 states have done that, and for some it was a stepping stone to full conversion to a for-profit corporation.

Horizon said consumer protections would remain strong after the change in structure. And although the bill would allow the corporation to merge or be sold, that would require a formal review by the state.

New Jersey Citizen Action said the legislation "raises several red flags" regarding Horizon's responsibilities to consumers and the state.

Renee Steinhaben, executive director of the N.J. Appleseed Public Interest Law Center, suggested Horizon's current practices already are suspect.

"I do not really understand what's nonprofit about a company that has all of its assets in for-profit subsidiaries," Steinhaben told radio station New Jersey 101.5-FM.

Senate President Steve Sweeney quickly endorsed the legislation, saying the change would allow Horizon to spend more on consumer technology and preventive care, thereby controlling costs and improving outcomes.

The legislation would also have the new Horizon entity pay the state up to $200 million a year and as much as $1 billion over seven years.

Maura Collinsgru, director of New Jersey Citizen Action's health care program, said changing Horizon's structure "is not a bill that should be rushed through lame duck."

That should be obvious to everyone. A broad understanding of Horizon's plans and public support for them aren't possible by this legislative session's Jan. 14 deadline.

New Jersey granted Horizon a unique position in the health insurance market, obligating it to the public but also allowing it to grow into an industry giant with annual revenue in excess of $3 billion.

The proper response to several past failures to convert to for-profit status is not a political rush job, but a sounder, more convincing case for why a change in structure would benefit New Jersey residents.

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