Republican Budget Committee Members to Propose Dedicating $600 Million Horizon Payment to Improving Health Care in NJ

The four Republican members of the Senate Budget & Appropriations Committee will move an amendment tomorrow to legislation restructuring Horizon Blue Cross Blue Shield of New Jersey to require a proposed $600 million payment from the insurer to be deposited into a new nonprofit entity that is dedicated to rate stabilization and improving the quality and efficiency of health care in New Jersey.

The members — Senate Republican Budget Officer Steven Oroho (R-24), Senator Sam Thompson (R-12), Senator Declan O’Scanlon (R-13), and Senator Michael Testa (R-1) — said they are concerned that premiums paid by Horizon’s policyholders and ratepayers will be consumed by the State’s General Fund to pay for spending unrelated to healthcare.

“In an ideal world, the excess premiums paid to Horizon by policyholders, small businesses, local governments, and taxpayers would be returned to customers in the form of lower future premiums,” the Republican senators said in a joint statement. “It’s clear, however, that’s not what this rushed legislation envisions. If the sponsors are going to require a massive payment to the State, we believe the proceeds should be dedicated by law to improving health care in New Jersey in a way that benefits and supports the needs of the communities that paid the premiums in the first place.”

Under the current legislation, S-3218, Horizon is required to make a one-time $600 million payment to the State, along with smaller payments for a number of years.

The amendment would direct the $600 million payment to a new nonprofit that would be created called the “Health Care Rate Stabilization and Improvements Organization,” for the purposes of rate stabilization and improving health care in New Jersey, with a focus on addressing infant mortality, maternal mortality, diabetes, heart disease, and veterans’ health.

The amendment would restrict the funds as an endowed account with no more than 25% of the principal being expended annually, and pursuant to a plan adopted by the organization’s board.

The board would be comprised of twelve unpaid members as follows: four members appointed by the governor without advice and consent and with no more than two from any one political party; one member each appointed Senate and Assembly Majority and Minority Leaders; and four members from the board of Horizon Blue Cross Blue Shield of New Jersey.

“We believe we have an obligation to ensure that any proceeds resulting from Horizon’s restructuring are dedicated appropriately,” the members added. “Those funds were paid by millions of Horizon’s subscribers, thousands of small businesses, and hundreds of local governments across the Garden State. They should support the unmet health care needs of New Jerseyans, not consumed by the black hole of the State Treasury.”

Additionally, Senator Anthony Bucco (R-25) and Senator Gerry Cardinale (R-39) expressed their support for the amendment, saying it addresses some of the concerns they raised during the Senate Commerce Committee’s consideration of the legislation today.