JERSEY CITY — Gov. Chris Christie continued his crusade against Horizon Blue Cross Blue Shield, the state’s largest health insurer, proposing new legislation on Thursday that would force more political appointees onto its board and require salary and bonus data for top executives to be posted online.
Christie has been urging lawmakers to take a chunk of Horizon’s $2.4 billion reserve to bankroll a new state-managed fund providing addiction recovery services for the poor. Lawmakers and gubernatorial candidates on both sides of the aisle — including Lt. Gov. Kim Guadagno — have said they oppose Christie’s plan.
But the governor doubled down on his plans Thursday, launching an extended tirade against Horizon during a speech before the Commerce and Industry Association of New Jersey, arguing that the “monopolistic” insurer is hoarding cash and ignoring its mission to help New Jersey’s less fortunate.
Christie said Horizon had net income of $163 million in 2016, a large sum that needed to be capped. The insurer, a not-for-profit company, has said its reserves are a vital safeguard for its 3.8 million policyholders, covering 75 days of their claims. A raid of its reserve fund would likely lead to higher consumer costs, company officials add.
“Horizon Blue Cross Blue Shield is not supposed to have profit … in return for that they get special tax savings,” Christie told a group of New Jersey business owners gathered at the headquarters of Goya Foods. “We need to stop this, and the way we stop it is the way we stop anything bad that is going on in this country: we shine a light on it. And that is what this bill does.”
Christie’s new legislative proposal would require salary and bonus information for Horizon’s executives and lobbyists to be posted online, and would require more annual disclosures to the state Department of Banking and Insurance, allowing state regulators “to demand more information from Horizon annually on how it’s supposedly meeting it’s nonprofit mission.”
“Again, if they’re meeting their mission, they have nothing to fear,” Christie said. “Just turn over the information and prove it.”
The governor also wants to create four additional board positions, to be filled by the Legislature. The current Horizon board has 15 members, four of which are state appointees.
That would all be in addition to the new state fund for addiction treatment services Christie wants Horizon to bankroll from its reserves. The administration has not said how much money it is seeking, but lawmakers have been discussing a $300 million raid. The Blue Cross Blue Shield alliance of health insurers requires members such as Horizon to keep reserves equal to at least 550 percent the amount needed to pay all its policyholders’ claims. Christie on Thursday said that the state should take any money above that 550 percent threshold.
The governor said he is shooting for June 30 — the end of the legislative session and fiscal year — as a deadline to get the Horizon legislation signed into law. Senate President Stephen Sweeney, Assembly Speaker Vincent Prieto (both D) and Republican leaders were all reviewing the proposed legislation, he said.
“I’ve always said I will listen to ideas, especially those that improve transparency and accountability, but I think it’s going to take a very persuasive argument to convince the Assembly that the state should be taking Horizon’s funds, especially amid the dire health care uncertainty in Washington,” Prieto said in a statement. “I would like to see the governor put as much effort into saving the Affordable Care Act and the benefits it brings to millions of New Jerseyans as he is targeting Horizon.”
The Senate Majority Office confirmed that a preliminary draft of the legislation had been received but declined to comment further.
Horizon spokesman Kevin McArdle criticized the governor’s plan and noted that Horizon already discloses executive compensation. Horizon CEO Robert Marino received $4.5 million in 2016, according to NJ Biz, which filed a public records request for the salaries of senior executives.
“Governor Christie is attacking the company for protecting our policyholders from a $300 million tax hike,” McArdle said. “Not once in the prior seven years has the governor raised any concern about Horizon’s publicly filed financial information, including executive compensation. Packing Horizon’s board with political appointees, jeopardizing the security of health insurance and taxing our 3.8 million members is wrong.”
The proposed legislation, if enacted, would likely go into effect in January 2018 at the tail-end of Christie’s term. Any funding from Horizon’s reserve would not be usable by the state until June 2018, the start of fiscal year 2019.
“This money will be for the new governor and new Legislature that you will vote for in November,” Christie said. “This administration will not see one nickel.”
Christie’s hosts on Thursday urged the governor to work in collaboration with Horizon.
“Horizon Blue Cross Blue Shield is the state’s leading health insurance company, providing coverage to nearly 4 million people,” said Commerce and Industry Association President Anthony Russo. “Any abrupt change could jeopardize its ability to satisfy claims.”