- Horizon Blue Cross Blue Shield has been operating under the same system since 1932.
- The company said it has banned investments in innovations that could lower costs for consumers.
- It’s up to the state to decide if it can make the changes it wants.
Trenton – Executives of New Jersey’s Horizon Blue Cross Blue Shield Thursday pressured state regulators to approve changes to the company’s structure, a move that opens the door to innovative programs that can help slow rising healthcare costs. said to open.
By changing its 90-year-old status as a non-profit into what it calls a non-profit mutual holding company, Horizon is freed from what management describes as outdated restrictions and is more committed to behavioral health. You can make a lot of investments. Social Programs and Prescription Drug Programs.
Horizon’s senior vice president and general counsel, Jennifer Velez, said:
Velez, proponents, and critics spoke at the first hearing of three state banking and insurance ministries to consider Horizon’s bid to change corporate structures. The agency’s commissioner, Marlene Caride, plans to approve or deny insurance companies’ applications in mid- to late-November.
Horizon’s request comes as consumers prepare for a spike in health insurance premiums in 2023. New Jersey officials plan to raise his prices by 20%. And consumers who are not covered by a private employer and buy insurance through the state marketplace, Get Covered New Jersey, can expect an average increase of 8.8% before factoring in subsidies. .
Newark-based Horizon is the state’s largest insurer, with 3.8 million members and policies ranging from Medicaid to Braven (a Medicare Advantage plan that owns two hospital networks in New Jersey). I am buying.
The company has operated as a non-profit organization since 1932 when it was founded as an insurer of last resort, agreeing to cover New Jerseyans who were unable to obtain insurance in the market. The State Medical Services Corporation Act regulated its activities and continued its focus on providing traditional commercial insurance services—collecting premiums and paying claims.
Horizon built on the 1932 rules:Here’s what the changes mean for you
Obamacare changed everything
But Horizon management says the health care landscape changed when the Affordable Care Act came into effect in 2010. Commonly known as Obamacare, the law mandated that all insurers cover consumers regardless of risk, so the company was no longer an insurer of last resort. It also prompted insurers and health care providers to find ways to curb rising health care costs.
Horizon officials said rules limiting how much money the company can invest in technology, data analytics or partnerships that could improve the health of its customers are holding it back.
Example: Horizon invested in a virtual behavioral health company in 2015 and said it showed promising results. But insurers were barred from further investment in the company, which was subsequently acquired by rival United Healthcare Inc. Optum, Horizon said in a filing.
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Horizon said its mission to use profits to improve the health of its members remains unchanged.
The company is governed by a 22-member board of directors. Its members vote for 13 directors. The Governor, the Speaker of the State Senate, and the Speaker of Congress appoint her remaining nine.
Horizon will get lower state taxes on premiums. But it will have to pay the state a total valuation of $1.25 billion over 18 years. (Before he died in July, Congressman Ronald Dancer, R-Ocean, proposed a constitutional amendment that would direct the money from the assessment to lower insurance premiums.
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Freeze redemption rate
Not everyone was keen on the stronger Horizon. Physical therapist Brandon Cruz said Horizon has kept reimbursement rates at the same level since 2005, forcing it to spend less time with more patients.
He was skeptical that insurance companies were treating patient health care as a priority.
“It’s up to patients and providers,” Cruz said. “Lower redemption rates mean lower quality.”
Horizon had a lot of support from business groups and non-profits, so Caride was asked to approve the application and help the insurance company expand its reach.
New Jersey’s largest health insurance company:Why Horizon Got Murphy’s Restructuring Approval
Vera Sansone, president and chief executive officer of Red Bank-based CPC Behavioral Healthcare, said her group is partnering with Horizon on a program called Integrated System of Care (ISC). rice field. It is designed to treat a patient’s mental health beyond seeing a clinical therapist, but also considers other factors such as food insecurity and affordable housing.
“Horizon operates under an outdated structure that cannot invest more in programs like ISC,” said Sansone.
The Ministry of Banking and Insurance will hold two more public hearings on Zoom on October 11th at 6pm and October 17th at 1pm. To attend, please visit https://nj.gov/hstearings.
Michael L. Diamond is a business reporter who has written on the New Jersey economy and healthcare industry for over 20 years. You can contact him at his mdiamond@gannettnj.com.
