It’s getting to look a lot like Christmas in Trenton, as Horizon Blue Cross Blue Shield’s deal to become a “non-profit mutual holding company” seems poised to sail through to approval over the objections of a crew of savvy observers that come from polar opposite ends of the political spectrum.

The last time I saw this kind of convergence was in September of 2008 when conservative Republicans and progressive Democrats in the House of Representatives aligned to narrowly vote down a $700 billion Wall Street bailout much to the panicked chagrin of an outgoing Bush administration.

Perhaps, if we lived in a state where the public interest mattered or claiming to be a non-profit corporation meant nobody running it was making well north of a million dollars, the cautionary words about the Horizon deal from NJ Citizen Action’s Maura Collinsgru and conservative Republican State Senator Gerald Cardinale would have had more impact.

Collinsgru believes the change in the law which is being requested puts at risk the $7 billion of publicly owned healthcare assets Horizon has built thanks to its state sanctioned non-profit monopoly. “This uses public money to finance Horizon’s expansion into for profit companies at the expense of New Jersey taxpayers and healthcare consumers,” said Collinsgru during a phone interview.

Cardinale, who was trained as a dentist prior to winning elective office, is of the conviction that rather than Horizon paying out hundreds of millions to the State of New Jersey, as part of their deal to start speculating in the private sector, that money should be rebated back to Horizon’s premium weary subscribers.

But in the here and now of 2020 in our disease ridden and deeply indebted state, Horizon has a lot going for it to guarantee it gets its way over these principled objections from the right and the left.

FEEDING FRENZY

It’s all about the biology of Trenton’s special interest politics and our state is a weakened host ripe for being swallowed whole.  

We are in the midst of a once in a century public health crisis, thanks to a highly contagious virus on its way to killing 20,000 residents as well as causing long-term healthcare complications for tens of thousands more.

At the same time, the State of New Jersey’s public finances are in an unprecedented free fall.  The Murphy administration needs every dime of revenue it can get so the $600 million that Horizon is offering, as a down payment on the $1.25 billion it will fork over to the state over the next 25 years, is tempting low hanging fruit.

But not all that shines brightly is gold.

Consider the salient warning about the moral hazard of taking Horizon’s ‘easy money’ offered in testimony from Brittany Holom-Trundy, senior policy analyst with New Jersey Policy Perspective, a non-profit progressive think tank.

“Past Governors have fallen for the lure of upfront payments to fill budget holes during tough economic times; short term fixes negatively affect the state’s finances and the state’s credit rating in the long term,” she testified Dec. 15 before the Senate Budget and Appropriations Committee.

But the ins and outs of macro public finance is not what has Trenton lawmakers abuzz.

SECRET SANTA?

It is Horizon’s plan to expand its board of directors to 22 members, several of whom are picked by the state’s elected leadership. While nowhere near the seven figure salaries paid out to Horizon’s crowded non-profit C-suite, a seat on the board of directors starts at $77,000 a year, which in the age of zoom meetings is a nice side hustle without leaving your house.

No doubt, what’s likely got the focused attention of several of our legislators is not what impact loosening the laws on a non-profit that holds $7 billion in publicly owned healthcare assets will have on New Jersey’s healthcare system, but just who is going to get the plum of a seat on the Horizon board, already an interesting crew.

A review of the 2019 Horizon board of directors’ roster shows a strong representation of Wall Street types and a bi-partisan collection of political insiders with a pair of medical doctors thrown in the mix as a garnish of gravitas. No doubt, getting a seat on this panel, which oversees the state’s largest health insurance company that provides 3.5 million people coverage, means that more than likely you’ve been in the room when backroom deals get cut.

According to Horizon’s 2019 annual report the board of directors includes former Assembly Speaker Joseph Roberts, a Democrat whose presence is balanced by that of former State Senator Joseph Kyrillos, a Republican, and former Majority Conference Leader.

The Horizon’s board also includes a bi-partisan collection of unelected political operatives like Michelle A. Brown, who is listed as the executive director of the Christie Institute for Public Policy. Brown earned her share of headlines back in 2014 when as the leader of New Jersey’s Economic Development Authority she oversaw the shoveling out of hundreds of millions of dollars in state subsidies to firms owned by Republican donors.

For the Democrats in the Horizon star chamber, there’s Joseph Muniz, who is the Board Secretary for the Hudson County School of Technology, who was appointed by then Assembly Speaker Vincent Prieto. Back in 2017, Politico reported Muniz was a political advisor to Prieto and his appointment came about after Prieto brokered a deal to resolve a government shutdown that was sparked after Gov. Chris Christie tried to force Horizon to cough up $300 million from its reserves to help pay for addiction treatment.   

Don’t those bios just scream healthcare expert?

WATER, RAILS AND HORIZON

The legal charge for Horizon’s corporate makeover is being led by their outside counsel Anthony Coscia, long-time partner with Windels, Marx, Lane and Mittendorf. Cosica is a former chair of the Port Authority of New York and New Jersey.

Coscia is chairman of Amtrak’s board of directors as well as chairman of Suez North America, part of the French based multi-national water and sewer giant that back in 2000 absorbed New Jersey’s United Water Resources, formally known as the Hackensack Water Company.

Coscia was also named by Gov. Murphy to his 21-member Restart and Recovery Commission which was convened to address the COVID-19 crisis. A call to his office looking comment was not returned.

In the latest round of legislative hearings, Coscia has insisted that Horizon’s makeover into something called a non-profit mutual holding company will guarantee that Horizon can have the best of both worlds of being able to take risks by investing in innovative for-profit-companies, while preserving their traditional non-profit mission.

One of the leading voices on the side of NJ Citizen Action and Consumers Union, that wants the legislature to slow down the approval of the deal, is Renee Steinhagen, an attorney and  the executive director of New Jersey Appleseed, a non-profit public interest law center.

Steinhagen testified on Dec. 14 that Horizon’s proposal was drafted by the company’s lawyers “based on a recommendation by McKinsey & Co.” and that the “nonprofit mutual holding company model was suggested simply as a means to avoid making a charitable trust settlement payment to the public” as required by the existing state law.

RATE OF NO RETURN

It was McKinsey & Co., one of the world’s leading corporate consultants, that recently had to issue an apology for its role in “turbocharging profits” from the sales of OxyContin, which helped spark the national opioid crisis which caused tens of thousands of premature deaths in the United States.

NPR reported that McKinsey provided the ‘killer’ marketing strategy for Sackler family and their Purdue Pharma which included a proposal to make “secret payments to insurance companies up to $14,000 whenever a patient became addicted or overdosed in an ‘event’ linked to Purdue’s opioids.”

McKinsey’s the logical choice for an outfit like Horizon that pays out millions to a crew of executives who can so efficiently ration health care to its paid-up subscribers ensuring there’s enough margin left over that they can justify their huge compensation.

In Horizonlandia, that’s not profits—that’s just millions in annual compensation.

New Jersey’s COVID rankings might gain the national attention they deserve; ranking highest in the virus death rate of any state in the nation per 100,000 and for inmate death per 10,000 prisoners. While we are only 2.77 percent of the nation’s population, we are 6.67 percent of the COVID deaths.

If the actual public health of New Jersey was what was Trenton’s top priority, the state legislature would first convene fact finding public hearings into how our current healthcare system, including the practices of Horizon, our largest health insurance provider, helped contribute to 600,000 of our fellow residents being without healthcare in the face of a killer virus.

Horizon has to hurry up and squeeze whatever they can for the C-Suite out of Trenton because come January 20 there will be a new sheriff in town, California’s Attorney General Xavier Becerra, who President-elect Biden has picked to be his Secretary for Health and Human Services.

The sad truth of the matter is that the Horizon Blue Cross Blue Shield Trenton gambit is just the latest installment of the saga of what started out as a state-by-state charitable effort that got traction nationally during the Great Depression to provide healthcare even to the millions of Americans down on their luck.

Scroll forward decades later to today, when medical bills are a leading national cause for bankruptcy and state after state has seen their state Blue Cross Blue Shield franchise bought up and merged with for-profit companies or turned into a so-call non-profit mutual holding companies, as was done in Michigan, where the CEO’s pay spiked from $1 million 2006 to $19.2 million in 2018.

According to CEO Update , which tracks top CEO compensation, Scott Serota, the former CEO of the Blue Cross Blue Shield Association, made in excess of $ 5 million in 2017 and that included a bonus that “was three times his base pay.”

Kind of makes that non-profit description they hide behind rather Trumpian. How many people could get health care coverage if all of the millions upon millions in gatekeeper compensation paid nationally was redirected to coverage and premium relief?

No matter how Horizon’s proposal turns out, we need someone of the stature of Rep. Bill Pascrell to hold hearings into how the Blue Cross Blue Shield movement, created to have the backs of working people, tuned into a marketing pyramid that pays out millions to healthcare profiteers while millions go without any healthcare coverage.