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Current Situation
Background on the Horizon Conversion
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Current Situation

Victory! S2239 Passed Out of Senate Health Committee!

With the passage of federal health care reform legislation, many implementation issues require state-level action. We are working with the NJ for Health Care Coalition to monitor and advocate for its implementation. In November 2010, S2239 establishing a NJ Health Care Reform Implementation Council passed out of the Senate Health Committee. The bill was amended to include our NJ for Health Care Coalition as a consumer representative to the Council and was passed unanimously by the Senate Health, Human Services, and Senior Citizens Committee. 

Rutgers AAUP-AFT is a member of this health care coalition pulled together by NJ Citizen Action. Crystal Snedden is the NJ Citizen Action organizer working on health care issues. Contact her at crystals@njcitizenaction.org or call 732-246-4772, ext. 14. Cathy Stanford is the AAUP-AFT staff who attends the health care coalition meetings on behalf of our union. Contact Cathy at cstanford@rutgersaaup.org or call the office at 732-964-1000, ext. 10.

Victory! The bill requiring a Health Impact Study (if Horizon BC/BS's Application for Conversion to a For-Profit goes forward) passed the Senate, May 20, 2010
Read bill
Senator Loretta Weinberg’s legislation (S 375) requiring Horizon Blue Cross Blue Shield to conduct multiple public hearings concerning its conversion application and require the NJ Department of Banking to conduct a Health Impact Analysis as part of its evaluation of a conversion application passed the NJ State Senate with overwhelming bi-partisan support May 20.  The vote was 38-2. Learn more

Horizon will not pursue conversion application

The Star Ledger reported on May 21 that Horizon will not pursue the conversion application during the Christie Administration.  Between last year’s election, national health care reform, the call for a health impact study and the scrutiny they are now under for giving themselves and their executives whopping pay increases, it appears they’ve decided to back off the application all together. 

http://www.nj.com/business/index.ssf/2010/05/horizons_plans_to_go_public_pu.html (Star Ledger, “Horizon Blue Cross Plans to Go Public On Hold Amid Scrutiny of CEO Pay”)

Senator Sweeney Orders Hearing on Horizon executive salaries

Senate President Steve Sweeney is calling for a formal investigation of Horizon compensation practices and how such whopping pay increases can happen as their customers are being hit with 30%, 40%, and higher rate increases.    

http://www.app.com/article/20100519/NEWS03/5200325/Hearings-ordered-on-Horizon-executives-pay: (Hearing Ordered on Horizon Executive’s Pay) 

The Health Impact study bill contains a provision for the Division of Rate Council to act as intervener for the public interest in the evaluation of the impact of conversion for New Jerseyans. The Horizon Watch coalition decided that this change was acceptable, given that a previous version of the bill had given the Office of the Public Advocate intervener status and that Office no longer exists under Governor Chris Christie.




Health Care Provider Groups Weigh-in on Conversion, April 13, 2009

The New Jersey Hospital Association and other provider groups that are not part of the Horizon Watch Coalition issued public comments on the proposed Horizon conversion.

1. The CEO of the Medical Society of New Jersey, Michael T. Kornett, wrote a hard-hitting OpEd that appeared on www.njbiz.com on April 13, 2009.

Kornett says the doctors of the Medical Society "don't buy" Horizon's argument that the conversion to a for-profit would unlock the value of Horizon Blue Cross/ Blue Shield for the purposes of improving the state's health care system and nor their claim to need capital to be competitive. Moreover, Kornett states that they don't buy Horizon's claim to be committed to transparency, objecting to Horizon's refusal to answer many questions about the conversion by citing the need for "confidentiality."

Link to Kornett's OpEd, April 13, 2009

2. The New Jersey Hospital Association and several other groups sent a letter on March 26, 2009 to Commissioner Steven Goldman of the Department of Banking and Insurance (DOBI) and to the Attorney General (AG), Anne Milgram, with a detailed analysis of what they find deficient in the answers that Horizon gave to DOBI and the AG earlier in March 2009. The letter is signed by the Presidents/CEOs of the New Jersey Hospital Association, QualCare, Medical Society of New Jersey, Catholic HealthCare Partnership of NJ, and the Alliance for Advancing Nonprofit Health Care.

Read the March 26 letter from these five groups representing health care providers to Commissioner Goldman and Attorney General Milgram.

The Alliance for Advancing Nonprofit Health Care released a media advisory on March 27, 2009 stating that Horizon's responses to New Jersey regulators (DOBI and AG) are still incomplete and raise more questions than they answer.

Read the March 27 press release from the Alliance for Advancing Nonprofit Health Care

On April 15, 2009, the Alliance for Advancing Nonprofit Health Care released the results of an online survey asking consumers about satisfaction with their health plans. Even though only 42% of the plans represented in the study are non-profits, 78% rated non-profit/non-investor-owned health plans the highest in satisfactory coverage. The survey was conducted by J. D. Power and Associates.

Media Advisory on consumer satisfaction with their health care plans

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Background on Horizon's Application for Conversion from Non-Profit to For-Profit

Horizon Blue Cross/Blue Shield is the insurance company that handles the NJ Direct15 state health insurance plan, which a majority of our members depend on for their health care coverage. In August 2008, Horizon filed an application to convert from a non-profit to a for-profit insurance company. That application, under NJ state law, must be analyzed by the Department of Banking and Industry (DOBI) as well as the Attorney General (AG) to determine if the conversion is "fair and equitable" in serving the public health care interest, given that they have received government assistance as a charitable organization. New Jersey conversion law requires that 100% of the fair market value of the company must go to a charitable organization that serves the health care needs of the citizens of the State. We are concerned that, should a conversion be approved, the proceeds might end up being used for the state budget, although current law does not allow this to happen. We are also concerned that access and affordability of health care coverage will be adversely affected.

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Horizon Watch Coalition Basics

Rutgers AAUP-AFT joined the Horizon Watch Coalition to monitor the conversion process. The Coalition is spearheaded by New Jersey Citizen Action and comprises a wide range of advocacy organizations, including but not limited to National Association of Social Workers, NJ; NJ Primary Care Association; Communications Workers of America (CWA); Health Professionals and Allied Employees (HAPE-AFT); NJ Appleseed; Statewide Parent Advocacy Network; Consumers Union; American Association of Retired Persons (AARP); and Blue Wave.

A set of Horizon Watch Coalition principles guide our advocacy because the member organizations agreed that it was better to focus on the process by which Horizon's application for conversion is being evaluated and to advocate for the creation of a full and complete record of the impact on the public, both in terms of finances and health care, rather than to come out against the conversion before the record is fully established. After a determination is made by the DOBI, depending on whether or not the conversion is approved, either Horizon or consumer groups are likely to appeal. We believe that the more complete the record before court review, the better for the health care interests of New Jersey citizens.

The Department of Banking and Industry (DOBI) and the Attorney General's Office (AG) are making documents related to the conversion available on their web site. You can visit DOBI's web site, then click on"Horizon Application for Conversion": http://www.state.nj.us/dobi/index.html

In March 2009, Horizon's responses to questions from DOBI and Horizon's response to questions from the AG's office were posted on DOBI's site.


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More information about the health impact study bill that passed the State Senate in May 2010:

Read S 375 (The Assembly verison is A 949 and has identical language.)

Senator Loretta Weinberg introduced this bill (S375) to require a "health impact analysis" of the proposed conversion of Horizon from nonprofit to for-profit in order to increase the public's voice in the process.

S375/A949 protects consumers three ways:

(1) Requires the State to hire an independent expert to conduct a health impact analysis evaluating the impact of the proposed conversion on the health status of all NJ residents;

(2) Requires the State to hold public hearings giving consumers adequate opportunity to have a voice in the conversion process:

(3) Allows intervener status for the Division of Rate Counsel in order that concerns about the public health impacts and the protection of nonprofit assets are raised and addressed.

Visit www.congress.org to locate your legislators, state and federal. Enter your zip code and, then, send an email or obtain the address to write a conventional letter.

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