Gov. Christie’s latest budget idea would be yet another hit to healthcare costs. In his Feb. 28 budget address, Christie proposed that Horizon Blue Cross Blue Shield make annual voluntary payments into a state fund that could be used to expand healthcare services for those in need, reported NJ 101.5 Radio.
Under Christie’s proposal, the money—an estimated $300 million per year—would come from the insurer’s cash reserves, which is used to pay for insurance claims. As of the end of 2016, Horizon’s reserve was roughly $2.4 to $2.9 billion, depending on the estimate. While Christie calls the reserve an “abundant surplus,” Horizon says it amounts to less than $650 per member, that would cover about 75 days’ worth of claims. In 2016, Horizon paid more than $10 billion in claims and expects to pay $11.5 billion in claims in 2017. Horizon also says the reserve has declined every year since 2013 and is projected to decline again this year. According to NJ 101.5, the amount is still triple what the state mandates.
While legislative leaders didn’t completely dismiss the idea, Horizon officials—as well as the New Jersey small business community—are strongly opposed because the proposal would make health insurance more expensive.
NFIB/NJ State Director Laurie Ehlbeck said in a statement: “The small business community ardently opposes mandates being placed on the private sector by lawmakers, and this proposal is no exception. Our members are already strapped with not only overwhelming healthcare costs, but exorbitant taxes thanks to the pension obligation of administrations past. More than half of the state’s insured population could be impacted by hikes to premiums that would be a direct result of Horizon Blue Cross Blue Shield being forced to deplete the reserves they are legally obligated to maintain.
“Our members want nothing more than to see the state achieve economic success through strong leadership at the legislative level. Forcing a private company to contribute to a fund, regardless of how well intentioned that fund may be, is a gimmick designed to avoid making the difficult choices that Trenton has been avoiding for decades. We already know from the past that fiscal shell games and Band-aid solutions do nothing but delay the inevitable.”