The African American Chamber of Commerce of New Jersey has long strived to empower and sustain African American businesses across the state through entrepreneurship and capitalistic initiatives. That mission, coupled with our goal of ensuring equal opportunity for everyone, is why we support allowing Horizon Blue Cross Blue Shield of New Jersey to apply to the state to become a not-for-profit mutual holding company. New Jersey and Horizon’s 3.4 million members would benefit greatly from such a change.
Like others, when it was first announced that Horizon would pursue this change, we had several questions. To its credit, Horizon was more than willing to talk with us and answer them. These discussions went a long way towards answering some of the misinformation that has emerged around what Horizon is trying to do.
First and foremost, under the change currently being proposed, Horizon will remain a not-for-profit New Jersey based company focused on serving New Jersey’s communities. It would also remain subject to the state’s rigorous insurance laws and under the oversight of the Department of Banking & Insurance that applies today. This means Horizon’s 3.4 million policyholders would be fully protected by the same government and regulatory protections that regulate all insurers. Relatedly, this change will not impact the coverage we count on.
This change to a mutual form is about strengthening Horizon’s ability to operate as an independent, not-for-profit insurer in New Jersey. This is not a for-profit model and there will be no shareholders. Horizon has informed us that they have no plans to merge or consolidate with another insurer, but even if Horizon were to explore that in the future, the same laws and regulations that govern that process would apply, including government oversight and approval for any such change.
Some have questioned why new legislation is needed, instead of following the process in the current law. The current law, or amending it, would not be sufficient. The current law governing Horizon’s change would make it for-profit instead of allowing it to remain a New Jersey-centric not-for-profit. Also, amending existing laws governing Horizon’s process is insufficient, because that would not provide the same protections as the new proposed legislation would.
There has also been discussion around Horizon doing this change through new legislation versus amending current statute. Again, our understanding is that amending current law would not provide the same protections as the new proposed legislation would. Under the proposed bill, Horizon members will actually have even more rights and roles, including an expansion of public appointees on the board of directors. Moreover, amending current law is not an alternative, because a health service corporation is a legal form that impedes the types of partnerships and collaborations that the future of health care demand.
In the past, whenever Horizon has attempted change of any kind, we have always heard “the sky is falling” scenarios. But these scenarios do not play out. The worst is assumed, but never realized. In fact, it is usually just the opposite. Hundreds of thousands of New Jerseyans are now receiving health care through Horizon’s OMNIA plans. Horizon has remained and expanded its role in the Affordable Care Act exchange when many insurers across the country have not.
Outside of our questions, which we feel have been answered, this change will remove burdensome regulations that only serve to prevent Horizon from meeting the needs and demands of its members. Capping how much Horizon can invest and limiting how much revenue the company can bring in are unnecessary roadblocks to progress. New Jersey’s laws should be indicative of a state that wants more progress, not less.
Changing Horizon to a not-for-profit mutual will free the company to invest, innovate and give its 3.4 million members the high-quality, affordable health care they want. Moreover, it is estimated that this change will mean 2,000 additional full-time jobs and $1.9 billion in new wages and benefits to New Jersey, along with $62 million in additional state tax revenue over a 10-year period.
This is a unique opportunity to see the future demands of health care and meet them head on. This seems to provide a better, healthier future for millions of New Jerseyans, while at the same time providing an incredible economic opportunity for the state. Horizon has gone out of its way to answer questions of concern from organizations like ours. Having Horizon maintain its not-for-profit status while becoming a mutual holding company is in the best interest of New Jersey and the 3.4 million New Jerseyans Horizon provides coverage for.
John Harmon is founder, CEO and president of the African American Chamber of Commerce of New Jersey.
