A bill that would allow Horizon Blue Cross Blue Shield of New Jersey to change its corporate structure passed through both houses of the Legislature on Thursday.
Under the legislation now on Gov. Phil Murphy’s desk, the state’s largest health insurer would change to a not-for-profit mutual holding company so that it can modernize its business practices and invest in innovative emerging technologies, while also proving an economic boost to New Jersey.
A diverse coalition of more than 40 business groups, including NJBIA, labor, health and community organizations are supporting bill, S–3218, which is sponsored by Sen. Nellie Pou (D-35), Sen. Paul Sarlo (D-36), and Senate President Stephen Sweeney (D-3). The legislation was introduced on Nov. 19.
“In its current structure, Horizon is limited on the size of investments it can make and has a ceiling on revenue outside of traditional commercial insurance services. It also faces stringent restrictions on its capital reserves,” NJBIA President & CEO Michele Siekerka said.
“These restrictions hold back the company’s ability to invest, innovate, and provide its members with the high quality, affordable health care they are demanding,” Siekerka said. “A change in structure will allow HBCBS the opportunity for better investment in new and emerging technologies, the ability to add products and services for its members, and the expansion of programs for underserved communities.”
The move would also provide an economic boost to the State of New Jersey, which stands to see more than $4 billion in additional economic output in the first 10 years if Horizon BCBS is permitted to become a mutual insurer, Siekerka said.
“New Jersey will also benefit in the form of a projected 2,000 additional full-time jobs, $1.9 billion in new wages and benefits, and $62 million in additional state tax revenue,” Siekerka said.
“HBCBS is a significant economic driver, as well as being the health insurance provider for much of New Jersey’s population,” Siekerka said. “The ability to leverage their capacity in a way that will ensure greater benefit to their members and New Jersey’s economy is something we should all agree on.”