TRENTON, N.J. – Revenues generated from a mutual holding company, now Horizon Blue Cross Blue Shield of New Jersey, should go toward reducing health insurance costs for policyholders and not lining the pockets of executives. Assemblyman Ron Dancer has introduced a constitutional amendment that, if passed, would ensure policyholders catch a financial break, not just executives who are already well-paid.
“With record enrollment, profits and bonuses, we must ensure that revenues go toward reducing skyrocketing health insurance premiums,” Dancer (R-Ocean) said.
Dancer expressed concerns that overall compensation for Horizon executives climbed 20 percent last year, with out-going Chairman Kevin Conlin’s compensation rising to more than $5.1 million for 2020. His bonus for 2020 — $3.9 million, up from $3.4 million in 2019 — was determined by independent board members, according to Politico.com. Other executives have seen bonuses climb six figures as well.
Dancer’s amendment (ACR207) would ask voters if state assessments paid by Horizon should be dedicated to lowering health insurance costs. If passed, Horizon’s payments to the state of an initial $600 million, and 17 subsequent annual assessments of up to $650 million, would be dedicated to reducing policyholders’ insurance costs. The existing law requiring those assessments does not dedicate the funds.
Horizon, presently the state’s only health service corporation, applied with the Department of Banking and Insurance to reorganize as a nonprofit mutual holding company on Feb. 4, 2020. That change would allow Horizon to invest billions into health care businesses across New Jersey and save it nearly $50 million annually in taxes.
Horizon’s revenue jumped 7% to $12.3 billion, driven by Medicare plan enrollments that swelled membership from 3.5 million to 3.7 million enrollees.
Meanwhile, insurance premiums are expected to rise an average of 4.4%, according to the Society for Human Resource Management. Employees pay an average premium of $1,745 after employer contributions. Independent health insurance plans can cost families thousands per month. Horizon did refund individual policyholders an average $367 a person back in February when projected 2019 health care costs came in lower than expected.
“The average person will never see a pay increase of more than 20% in a year and will never see a bonus in the millions of dollars. Horizon’s mission statement talks about affordability for its members, a statement I heartily endorse,” Dancer added. “There’s no good reason executives and policyholders can’t share the wealth.”
The Senate version, sponsored by Senator Samuel Thompson (R-Ocean), was introduced in June.