Senate and Assembly panels advanced a measure that restructure the state’s largest health insurance provider Monday.
The bill would reclassify Horizon Blue Cross-Blue Shield as a non-profit mutual holding company instead of a non-profit health services company, a designation that allows the firm to expand and, the bill’s backers hope, reduce premiums for its roughly 3.6 million New Jersey customers.
“Horizon has a unique role and responsibility that needs to be protected and sustained with a reorganization that allows the insurer to adapt to the modern healthcare marketplace,” Senate President Steve Sweeney (D-West Deptford). “This bill will allow for changes, but prevents the company from abandoning its obligations to its policyholders and its responsibility to the people of New Jersey.”
The measure would allow Horizon to acquire other providers that would expand its services, though such acquisitions and other reorganizations require approval from the Department of Banking and Insurance.
A previous version of the bill died after widespread outcry over provisions that would have privatized the insurance provider, but the new bill does not seek to do so.
The reorganization the bill allows is expected to generate $1.25 billion for the state over the next 18 years, including a $600 million initial payment, a provision that drew concern from some Republicans.
“I have serious concerns that any failures in the for-profit operations that would be allowed by this legislation would impact Horizon’s ability to meet its core non-profit mission of serving ratepayers who would be stuck with the tab for any losses,” said State Sen. Tony Bucco (R-Boonton). “I’m also concerned that there are no restrictions on how the State could spend the initial $600 million payment from Horizon or the smaller payments in future years. That money will end up going into the State’s General Fund and it will disappear with nothing to show for it.”