Reject the raid and reject the rush

NJEA Executive Director Ed Richardson testified before the Senate Budget and Appropriations Committee on Monday to oppose proposed legislation that would create a mechanism for the state to raid the reserve funds of Horizon Blue Cross Blue Shield. While the bill was passed by the committee, it does not appear to be moving in the Assembly.

Below is Richardson’s testimony, as submitted to the committee.

“We have come nearly to the end of budget season, with just over four days left to make important decisions that will affect every resident in New Jersey. Dozens of important issues remain unresolved, including school funding. Countless hearings, caucus meetings and votes must be crammed into the next 100 hours or so. There could not be a worse time to introduce a massive overhaul of the system that provides health insurance to approximately half of New Jersey and half of our members.

“So, since time is short, let me be very blunt: this is a terrible bill to consider this week. Major elements of it will harm our members and millions of other New Jersey residents. It will make health insurance more expensive and less accessible. This bill must not be allowed to pass in the frenzy of budget season horse trading. The stakes are simply too high.

“At its core, this bill is only slightly different from an equally bad proposal that Gov. Christie has been pushing for months. Ultimately, it is designed to allow the state to seize assets from Horizon to plug holes in the state budget. The fact that it purports to push that seizure into next year does not make that bad idea any better, but it does make it even clearer that it is not a debate that we should be having in the heat of this year’s budget.

“The underlying premise of the proposed asset seizure is that Horizon’s reserve fund is too large. We disagree with that premise, but will leave it to other experts in the field to discuss the intricacies of how large a reserve is needed to responsibly meet Horizon’s obligation to its policyholders.

“Our position is much simpler: even if it is determined that Horizon’s reserve could safely be smaller, any excess does not belong to the state.  It belongs to the policyholders who fund that reserve with their premiums. Any reduction to the reserve should be in the form of lower premiums or better delivery of healthcare to members, using those funds to benefit the people who provided them in the first place. The state should not be allowed, under any circumstances, to seize that money in order to fund other budget priorities.

“Our members, under a law passed in 2011 known as Ch. 78, pay a large and increasing share of their health insurance premiums. The amount they are forced to pay each year is growing so quickly that many are experiencing what we call “negative net”: their take home pay decreases from one year to the next because of rising mandatory premium contributions. For those who are covered by Horizon, the money they pay in premiums is what Horizon uses to pay claims and to maintain a responsible reserve fund.

“To say that the money our members and others have paid toward their premiums should be used for any purpose other than providing the healthcare they paid for is to advocate for stealing their money. I know that’s blunt, but it’s the truth so I refuse to sugarcoat it for anyone.

“I urge every legislator in this room, and every one of your colleagues: do not steal from my members. It’s not your money.  It’s theirs. And it should be used only to provide the health insurance they paid for.

“Oppose this bill, because it’s really a raid on every New Jersey resident and every NJEA member who helped build that fund, dollar by dollar, paycheck by paycheck.

“Do the right thing: reject the raid and reject the rush.”

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