Vitale Statement on Legislation To Ensure Health Service Corporation’s Commitment to Charitable Mission, Enhance Transparency And Protect Reserves

TRENTON – Senator Joseph F. Vitale (D-Middlesex) issued the following statement following approval by the Senate Budget and Appropriations Committee of legislation he is sponsoring to ensure that health service corporations in New Jersey uphold a commitment to their charitable mission. The bill would also enhance transparency and protect the reserves of these insurers.  Horizon Blue Cross Blue Shield of New Jersey is currently the only health service corporation operating in New Jersey:

“I want to thank the members of the Senate Budget Committee for a spirited but thoughtful debate on this important bill. This legislation sets up an open public process to develop an appropriate, efficient surplus range within which Horizon should aim to operate. It is a rational, reasonable approach to current concerns about whether or not there truly is an excessive surplus, and it is based on a Pennsylvania model that is working.

“The bill would provide for a single process to establish an appropriate range for the surplus, and only after that when the reserve exceeds the upper limit of the range would it trigger the involvement of the Department of Banking and Insurance. If that happens, Horizon would be given the opportunity to justify carrying reserves above the range or to decide how that funding will be expended.

“This is not a money-grab, it does not create a slush fund, and it does not put any undue operating costs upon Horizon that would drive up premiums. It simply creates a fair and equitable system that will benefit Horizon and protect policyholders from unnecessary premium increases.

“This bill also contains two other important reforms to improve transparency and create greater oversight, by allowing policyholders to elect three members of the Horizon board and requiring that certain financial information of all insurers be posted online.

“There has been a great deal of misinformation about this legislation. I am pleased we were able to have a full discussion in the committee and to set the record straight about what is actually in the bill, and what is not. I want to thank the members who supported this legislation. I look forward to continuing our discussions and to advancing the bill to the Senate floor.”