CORONAVIRUS (COVID-19) RESOURCE CENTER Read More
Add To Favorites

Horizon: NJ Legislature ready to rebuild health insurer; critics fear consumer cost

Asbury Park Press - 12/16/2020

TRENTON - A bill that would allow Horizon Blue Cross Blue Shield of New Jersey to change its corporate structure is headed to a vote from the Legislature.

The Senate Budget and Appropriations Committee voted along party lines 8-4 to approve the bill that would give Horizon more leeway to invest in products and services the company says are needed to lower health care costs.

"This bill is a blueprint for change that will allow Horizon Blue Cross Blue Shield to modernize their operation," said state Sen. Paul Sarlo, D-Bergen, chairman of the committee and one of the bill's sponsors.

Newark-based Horizon, the state's biggest health insurance company with 3.6 million members, has been lobbying lawmakers to change its corporate structure from a not-for-profit to a not-for-profit mutual holding company.

Mutual holding companies usually are owned by their members who would share in their profits. In this case, though, there are no profits.

The company's current status, it says, comes with strict rules that make it tough to compete with other insurers and deliver its services to more residents.

Both the Assembly and the Senate are scheduled to vote on the bill Thursday.

Committee approvals: Horizon moves one step closer to changing NJ's biggest insurer forever

The bill specifies that Horizon couldn't become a for-profit company. It would increase the state's presence on the board of directors from 35% to 40%. It would lower the tax rate on Horizon's premiums to match its competitors. And it would require Horizon to pay $1.25 billion over 18 years, including $600 million next year.

The bill has drawn plenty of opposition. Consumer groups have said they worry that Horizon will find a way to turn into a for-profit company anyway that will need to answer to shareholders.

And Republican Senators said Tuesday they wanted to ensure the windfall from Horizon would be used for health care instead of the general fund.

"We know what will happen with that money," state Sen. Declan O'Scanlon, R-Monmouth, said, opposing the bill. "It will come in, it will be squandered, and the people of New Jersey won't see any benefit."

Michael L. Diamond is a business reporter who has been writing about the New Jersey economy for more than 20 years. He can be reached at mdiamond@gannettnj.com.

This article originally appeared on Asbury Park Press: Horizon: NJ Legislature ready to rebuild health insurer; critics fear consumer cost

___

(c)2020 the Asbury Park Press (Neptune, N.J.)

Visit the Asbury Park Press (Neptune, N.J.) at www.app.com

Distributed by Tribune Content Agency, LLC.