Measure Would Require Health Impact ‘Fairness Analysis,’ Additional Public Participation
TRENTON – A bill sponsored by Senators Loretta Weinberg and Bob Gordon which would amend State statute regarding the process for Horizon’s conversion from a not-for-profit health care insurance provider to a domestic stock insurer was approved by the Senate Commerce Committee today by a vote of 3-0, with two abstentions.
“As the largest health insurer in the State of New Jersey, Horizon Blue Cross Blue Shield is responsible for providing access to care for millions of State residents,” said Senator Weinberg, D-Bergen, and Vice Chairwoman of the Senate Health, Human Services and Senior Citizens Committee. “Any conversion of Horizon from a non-profit to for-profit status could have drastic and far-reaching consequences on the availability and accessibility of care in New Jersey. We must tread very carefully in allowing Horizon to convert to for-profit status, and we must ensure that New Jersey’s Horizon subscribers are not put in jeopardy to benefit the bottom line of a health care corporation.”
“Discussions about Horizon’s conversion to a for-profit corporation have been going on for nearly a decade,” said Senator Gordon, D-Bergen, and a member of the Senate Health Committee. “However, in light of the economic crisis facing our country, and the impact that high health care costs can have on a family’s ability to make ends meet, more than ever we need to make sure that conversion makes sense for both health care consumers, as well as for Horizon. By increasing public scrutiny and requiring an exhaustive study of the impact of conversion on health care accessibility, we can make sure that Horizon’s conversion is not accomplished on the backs of hard-hit health care consumers.”
The bill, S-2532, would make various changes to the process through which Horizon Blue Cross Blue Shield could convert from a not-for-profit entity to a for-profit insurer. The bill would increase the number of public hearings held by the Department of Banking and Insurance (DOBI) from one to at least four, with one being held in the northern part of the State, one in the southern part of the State, and two in the central part of the State. At least two hearings would be held after the DOBI Commissioner has received and made public all written reports obtained through the current conversion process, and, under amendments to the bill, the Public Advocate would be appointed to act as an intervenor to participate at each hearing in order to represent and protect the public interest.
“People need to have an opportunity to voice their concerns and find out how conversion will affect them and their families,” said Senator Weinberg. “By expanding the number of public hearings, and requiring them to be held throughout the State, we are increasing the openness and transparency of the conversion process. We need to give New Jersey’s residents full assurances that conversion is being thoroughly reviewed and analyzed by State regulators, and that their voice counts in this process.”
In addition to the public hearings, the Commissioner of Banking and Insurance would be required to hire a consultant to prepare a health impact study of the proposed Horizon conversion, in order to assess the effects of conversion on Horizon subscribers. The health impact study would have to address questions regarding the accessibility, availability and quality of care under the conversion plan for Horizon subscribers, as well as analyze the business plan and proposed rate changes, compared to other insurers, and the effects on the cost of care for subscribers.
“The health impact study is the conscience of the conversion process, and gives us the opportunity to see the effects that conversion will have down the field on the health care experiences of Horizon subscribers,” said Senator Gordon. “We know that conversion will mean more money in the pockets of stockholders. However, we need to be careful that the economic benefits of conversion aren’t bought with increased health care premiums and unfair rates on Horizon’s insurance customers.”
In 2001, the New Jersey Legislature created a statutory procedure that would allow Horizon to apply for conversion from a non-profit to a for-profit corporation. Currently, an application for conversion is pending before DOBI, but is not yet complete. This legislation would have to be signed into law before the application process is completed in order to have the additional public interest safeguards in place on the conversion process.
“We have an opportunity to increase public discourse and subscriber protections in the Horizon conversion,” said Senator Gordon. “However, we need to take this opportunity now, before the conversion goes through without the increased protections for the public interest.”
“When all is said and done, Horizon’s conversion to for-profit status may end up being a good thing for health care in New Jersey,” said Senator Weinberg. “But we cannot go into conversion blindly, and must do our due diligence in protecting the rights of health care consumers in the Garden State. The increased level of public scrutiny and health impact analysis would make sure that at the end of the day, the conversion process of Horizon is accomplished in such a way that is as fair and honest as possible.”
The bill now heads to the full Senate for consideration.