A move to restructure Horizon Blue Cross Blue Shield faced little opposition at the first of three public hearings before the Department of Banking and Insurance Thursday.
Horizon is the largest health insurance firm in the state and the only nonprofit of its kind here. Reorganizing its corporate structure would allow it to shed tax burdens and regulatory hurdles that it says make it unable to compete with for-profit institutions.
The restructuring, launched under a bill Gov. Phil Murphy signed into law in late 2020, would transform Horizon from a nonprofit health services corporation into a nonprofit mutual holding company.
“Our current corporate structure as a health services corporation has enabled us to accomplish our goals for many years, but our structure was built for a different time,” Jennifer Velez, the insurer’s general counsel, told state officials. “Many of the laws governing our current structure date from the 1980s and contain outdated restrictions and limitations that other New Jersey health insurers are not subject to.”
Those restrictions included limits on the size of investments made by Horizon, a unique tax on insurance premiums, and limits on revenue from certain services, including Medicaid, Velez said.
The law enabling Horizon’s reorganization required the firm to pay the state $600 million in June plus up to $625 million in additional payments over the next 17 years to compensate the state for roughly $50 million in annual revenue lost as a result of the restructuring, a change Velez said would reduce premiums for those insured by Horizon.
The new structure would also allow Horizon — which administers benefits for public health plans that cover more than 800,000 state, local, and county government workers — to operate for-profit subsidiaries it acquires, though state officials stressed Horizon would remain a nonprofit if the reorganization is approved.
Horizon’s push to restructure won widespread backing from a bevy of business, insurance, and health care industry groups, which pointed to the chance of Medicaid expansion, potential job growth, and other economic gains in support of the shift.
“It will create revenue. It will boost the economy. Health care is a critical part of our economy. Horizon is a critical part of health care in New Jersey,” said Chris Emigholz, chief government affairs officer for the New Jersey Business and Industry Association. “It is good for our economy. It’s good for our business climate.”
Transparency concerns
At the same time, the reorganization faces some opposition from advocates who said they fear the process is being rushed through with little chance for public input and insufficient information about how the restructuring would affect health services in the state.
The law allowing Horizon to restructure requires the Department of Banking and Insurance to hold three public hearings within 90 days of Commissioner Marlene Caride’s determining that the insurer’s application to restructure is complete.
Caride issued the letter of completeness on Sept. 22, a date that allows hearings through Dec. 21. But the hearings will follow a far tighter schedule, with the remaining two scheduled for Oct. 11 and Oct. 17.
The commissioner is required by law to approve the plan within 30 days of the final hearing unless she finds it violates the law, threatens to destabilize Horizon, or extends no benefits to policyholders.
“The fact that they’re all within two weeks expedites the process,” New Jersey Citizen Action health policy analyst Maura Collinsgru said.
Collinsgru noted that an 800-page document containing exhibits submitted as part of Horizon’s application was just made public.
“It is literally impossible to review the documents that have been loaded to the site to provide more meaningful testimony before a decision is made,” she said.
She also pointed to the absence of a health impact study measuring how the reorganization would affect the health of Horizon’s policyholders and the public at large.
That study, which is not required by law, is being conducted but has not yet been completed, Caride said. The commissioner said it will be released to the public once finished, but it’s not clear whether it will be complete before Oct. 17, the date of the final hearing.
“It is a quandary to us how a decision of this magnitude can be made before that study is actually complete,” Collinsgru said.
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October 07, 2022 at 06:04PM
https://newjerseymonitor.com/2022/10/07/horizon-restructuring-faces-little-opposition-at-first-public-hearing/
Horizon restructuring faces little opposition at first public hearing - New Jersey Monitor
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