Horizon Blue Cross Blue Shield of New Jersey, the state’s largest health insurance company, cleared the last hurdle in its plan to expand its health care business late last week when the state’s Department of Banking and Insurance gave initial approval to change the company’s charter. .
Banking and Insurance Commissioner Marilyn Caride issued a statement late Thursday declaring Horizon’s application to become a nonprofit mutual holding company “complete.”
However, the state audit is yet to take place. Caride said its office is conducting a health impact study to determine whether Horizon’s change to the company’s charter is in the best interest of its 3.6 million policyholders. A state spokeswoman did not know on Friday when that study would be available to the public.
A third of Horizon’s clients work on Medicaid, the federally funded insurance program for low-income and disabled people. Horizon was created as a not-for-profit health services company that was at one time an insurance company of last resort for people who had no other means of receiving coverage.
Governor Phil Murphy signed a law in December 2020 that created a path for Horizon to change its management structure and allow the $13 billion not-for-profit to behave like its for-profit competitors by breaking up for-profit subsidiaries and investing money in new technology to track members’ health, or buying a chain of physicians’ practices, among other options.
In exchange for the state allowing Horizon to reorganize, the company committed to paying the state $1.25 billion over 25 years to cushion the loss of other tax revenue the Newark-based company provided.
The law requires CARED to approve the conversion unless it determines that the plan “contradicts the law. It would harm the safety or integrity of the proposed reorganized insurance company and the insurance company subsidiaries of the proposed joint holding company; or not benefit the policyholders’ interests in the service company.” health or treat them unfairly.”
The law also requires the state to host three public hearings, all scheduled for October. The first hearing is the only in-person hearing, scheduled for October 6 at 11 a.m. at the State Banking and Insurance Administration’s office, 20 West State Street, Trenton. Carid’s announcement said virtual hearings will take place on October 11 at 6:00 p.m. and October 17 at 1:00 p.m.
In a letter to Horizon President and CEO Gary St. Hilaire, Caride raised a number of questions about the company’s future. The app says the change in company structure will give the company “the flexibility to make strategic investments that can begin to cover some of our members’ health care costs, which are currently covered through member-only premiums.” Carded asked how the company would keep premiums on hand “in light of the recent trend in medical inflation.”
She asked how the company would improve equality in health care and “culturally competent care” for people of different races and ethnic backgrounds, a priority of the Murphy administration. Horizon plans to transfer $300 million from its regulated insurance business to Horizon Mutual Holdings, the new parent company and Caride has wondered how that money will be spent.
Horizon spokesman Tom Wilson declined to answer Carded’s questions ahead of the hearing.
“For nearly ninety years, Horizon members have relied on us to help them achieve their best health, work with their physicians to improve quality, and make care affordable and convenient. What our members need and demand from healthcare today is rapidly changing, becoming a non-profit subscriber and positioning Horizon even better. to continue to meet their needs,” Wilson said in a statement.
“We remain committed to continuing to work with management to achieve the successful completion of this process and to provide benefits to our members from the reorganization,” Wilson’s statement said.
By law, Horizon will remain a “charitable and benevolent organization,” and will not be able to transform into or acquire a full-for-profit corporation unless the company submits a request to the state to do so. This language was added to reassure consumer advocates that Horizon is not abdicating its responsibilities to its members.
Maura Colingro of New Jersey Citizen Action, one of the consumer organizations that opposes Horizon’s plans, said she was disappointed that the health impact study may not be ready in time for the hearings. It is a document that can shed light on a very complex process. Likewise, there are no details about the subsidiaries that Horizon intends to establish
“There is no meaningful information here that we can assess,” Collinsrow said. “Some of the questions raised by the commissioner are good, but I would venture to say there is more to be asked.”
Colingrow also noted that the law allows public hearings to be scheduled over a 90-day period. She said the pace seemed “rapid”.
The Horizon app can be found here.
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Susan K. Livio V slivio@njadvancemedia.com. Follow her on Twitter Tweet embed.
from San Jose News Bulletin https://sjnewsbulletin.com/horizon-new-jerseys-largest-health-insurance-company-is-close-to-entering-the-for-profit-healthcare-field/
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