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| New Jersey Hospital Association Statement: "There is far too much at stake for the people of New Jersey to have this process proceed with key information shielded from the public," said NJHA President and CEO Betsy Ryan. "New Jersey residents are rightfully concerned about the high cost of health insurance and access to coverage. They deserve a full and open airing of this important issue." |
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| Response: Horizon BCBSNJ has made the application for conversion, the foundation plan, as well as non-privileged Board materials public. Under the conversion law, the business plan and certain other financial documents are not public documents because they could harm the company by providing proprietary information to competitors. The confidentiality of these proprietary documents, however, will not in any way detract from a full and open public analysis of how conversion will affect our state’s health care system. |
| Horizon BCBSNJ is committed to a transparent process. To suggest, in any way, that Horizon BCBSNJ is shielding necessary information from the public is untrue. The public process on conversion has just begun. A detailed analysis of the conversion will be undertaken and the process will be public. |
| Horizon BCBSNJ voluntarily made its conversion filings public and developed a Web page www.HorizonBlue.com/conversion for conversion-related information. The law provides for a full and open public process. |
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| NJHA Statement: The state's release of additional information yesterday shed little light on critical business analyses, financial projections and other information that would help determine whether the conversion plan truly is in the public interest. |
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| Response: Under the conversion law, the Commissioner of the Department of Banking and Insurance is responsible for determining whether Horizon BCBSNJ’s conversion plan is in the public interest (NJSA 17:48E-52). |
| To that end, the Commissioner “may engage the services of advisors, and consultants...to advise him on any matters related to conversion.” [NJSA 17:48E-51 (g)] The request for proposal documents released by DOBI yesterday indicates the Commissioner is seeking to engage those consultants to undertake the critical business analysis NJHA suggests is necessary. The process has just begun. A detailed analysis of the conversion will be undertaken and the process will be public. |
| Furthermore, a public hearing is required after the Commissioner indicates Horizon BCBSNJ’s application is final. The Commissioner has not even made that initial determination. NJHA and all other interested parties will be permitted to participate in that public hearing. |
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| NJHA Statement: Horizon is New Jersey's insurer of last resort and covers a great deal of New Jersey's Medicaid beneficiaries. |
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| Response: In 1992, the Legislature enacted reforms that required all insurers to write individual policies for anyone regardless of their health status, thereby eliminating the necessity for the insurer of last resort. |
| It is true, however, that Horizon BCBSNJ, through its affiliate Horizon NJ Health, is the largest managed health care organization serving the publicly insured, providing health services for more than 300,000 people in all 21 New Jersey counties. |
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| NJHA Statement: Key questions demand answers, said Ryan, including whether premiums would increase to satisfy the expectations of share holders [sic], whether the new for-profit company would still cover Medicaid patients and whether the quality of the coverage would suffer under a for-profit company. |
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| Response: 1. Premiums: Health insurance premiums are a reflection of the underlying costs of health care (e.g., hospital costs, physician costs, utilization, new medical technology, and prescription drug costs). As these underlying costs rise, so do health insurance premiums. Whether Horizon BCBSNJ remains a nonprofit health service corporation or becomes a for-profit health insurer, health insurance premiums will be a function of the underlying cost of health care. |
| Therefore, health insurance premiums will not rise because Horizon BCBSNJ converts to a for-profit health insurer. Health insurance premiums will continue to rise as the underlying costs of health care increase. |
| 2. Continuing to participate in Medicaid: A decision whether or not to continue to participate in government-run programs is not dependent upon Horizon BCBSNJ's status as a nonprofit or for-profit company. Provided the state government adequately funds Medicaid and FamilyCare, Horizon BCBSNJ will continue to participate in those programs. |
| It must be understood that Horizon BCBSNJ could not stay in a government program that is losing money even as a nonprofit. To do so would require its other members to subsidize the government program members’ health care. This would be unfair to its members who are not in government-run programs. This is the case whether Horizon BCBSNJ remains nonprofit or converts to a for-profit health insurer. |
| 3. Quality of coverage: “[Etti Baranoff, associate professor of insurance and finance at Virginia Commonwealth University] said by making the company public, there would be more incentives for Horizon to be a more modern and sophisticated company. For Virginia, it hasn't impacted rates, Baranoff said, but if the co-pays for specialists and emergency room visits go up, people should begin asking questions. 'In my mind, there shouldn't be any fear of rate increases,' said Baranoff, referring to monthly payments. (8/16/08, Press of Atlantic City, Horizon Blue Cross applies to become for-profit insurer) Virginia’s Blue plan converted from a nonprofit to a for-profit health insurer. |
