VAINIERI HUTTLE, WAGNER, VOSS & GREENSTEIN BILL TO INCREASE PUBLIC PARTICIPATION AND SCRUTINY OF INSURER CONVERSIONS RELEASED BY ASSEMBLY PANEL

(TRENTON) – Legislation sponsored by Assemblywomen Valerie Vainieri Huttle, Connie Wagner, Joan Voss and Linda Greenstein to require increased public participation and independent analysis when a health insurer moves to convert to a for-profit company was released today by an Assembly panel.

The bill (A-929) proposes more public hearings and a study examining the health impact of any proposed conversion. The hearings and independent analysis would be required before the state grants approval for the conversion. The state’s largest insurer, Horizon Blue Cross Blue Shield of New Jersey, recently considered plans to convert into a for-profit company.

It was also recently revealed that William J. Marino, president and CEO of Horizon Blue Cross Blue Shield of New Jersey, was paid $8.7 million last year, a 59 percent increase from 2008, while other company executives also enjoyed huge pay hikes.

“This bill simply ensures sufficient public participation and that every issue has been carefully reviewed before a decision is reached on a conversion application,” said Vainieri Huttle (D-Bergen). “We need extra caution when moving forward on issues that could, among other things, increase premium costs and influence the health care of so many New Jerseyans.”

“Requiring increased public participation in a process as important as this is always a good thing,” said Wagner (D-Bergen). “Such conversions can have wide-ranging impacts on all residents, especially when large insurers seek a switch, and everything must be considered and reviewed carefully to ensure consumers are protected.”

“This bill doesn’t oppose conversions,” said Greenstein (D-Middlesex/Mercer). “It just seeks to ensure every angle of a conversion has been carefully reviewed and the public is given every opportunity to provide their input on such an important decision so patients are safeguarded.”

“Conversions come with many concerns,” said Voss (D-Bergen). “If a conversion is worthy, it should be able to withstand the utmost scrutiny. That’s what this bill seeks.”

The bill would make various changes to the process through which Horizon Blue Cross Blue Shield could convert from a not-for-profit entity to a for-profit insurer. The bill would increase the number of public hearings held by the Department of Banking and Insurance (DOBI) from one to at least four, with one being held in the northern part of the state, one in the southern part of the state, and two in the central part of the state. At least one hearing would be held after the DOBI commissioner has received and made public all written reports obtained through the current conversion process, and, the requirement for public notice of the hearings would increase from 45 to 75 days.

The DOBI commissioner would also be required to hire a consultant to prepare a health impact study of the proposed Horizon conversion, in order to assess the direct and indirect effects of conversion on Horizon subscribers. The health impact study would have to address questions regarding the accessibility, availability and quality of care under the conversion plan for Horizon subscribers, as well as analyze the business plan and proposed rate changes, and the effects on the cost of care for subscribers.

Additionally, the bill would prohibit the use of any proceeds from the conversion being used to replace current government spending on health care and instead would require that the proceeds be used to promote improvements in health care through accessible, affordable, available and quality health care, including public health-related activities.

The bill was released by the Assembly Financial institutions and Insurance Committee and now goes to the Assembly Speaker, who decides if and when to post it for a floor vote.

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