Billionaire publisher and former Republican candidate for president Steve Forbes scorched New Jersey Gov. Chris Christie after he announced in his final budget address Tuesday that he wants to raid $300 million from the cash reserves of the state’s Horizon Blue Cross/Blue Shield non-profit insurance company.
“While Governor Christie’s efforts to combat drug addiction have good intentions, his plan to raid the reserves used to protect the health of millions of New Jersey citizens for this purpose is not the right approach,” Forbes said. “When government steps into the marketplace in this fashion, as we have seen in New York, higher taxes and increased consumer costs are sure to follow.”
Christie told legislators that Horizon Blue Cross/Blue Shield is a wealthy charity and as a charity, it must respond to pressing needs of the state or lose their charity status.
“They have over $2.9 billion in surplus on nearly $12 billion a year in revenue,” the governor said. “While some would argue for converting Horizon to a for-profit company, which would bring a windfall of billions of dollars to state taxpayers, I am not advocating that move today. Nor am I suggesting that we use Horizon to fill any budget gaps. Our budget is balanced and needs no such one-shot gimmicks to be balanced.”
Christie said one of the projects he would finance with Horizon Blue Cross/Blue Shield cash is the opioid epidemic in the Garden State.
Forbes, who leads the magazine founded by his grandfather, said he was not impressed.
“Opiate abuse is a serious problem in our country, and one sensible approach to addressing it is to engage New Jersey’s pharmaceutical companies,” said the free-market conservative, who worked with the late New York congressman Jack Kemp. “There are also many charitable organizations working to combat drug abuse that can engage.”
Christie’s scheme to tackle opioid abuse with the reserves comes on the heels of his Feb. 14 meeting with President Donald Trump at the White House. Speculation in New Jersey is that Christie, who is barred from another term as governor, spoke to the president about taking the director of the Office of National Drug Control Policy, or the White House Drug Czar.
The New Jersey governor just signed a law guaranteeing that a New Jersey resident receives up to six months of drug rehabilitation treatment from their insurer, and Christie is starring in anti-drug commercials airing in the New York City and Philidelphia media markets.
Forbes, who advocated a flat-tax in his 1996 and 2000 runs for the White House, said raiding the cash reserves of a non-profit was tantamount to a new tax on New Jersey residents relying on the healthcare insurer. “Imposing a permanent tax increase on the back of New Jersey residents and patients is not only fiscally reckless, but sets an awful budget precedent.”
Horizon Blue Cross/Blue Shield issued a statement shortly after the governor’s speech.
“The claim that Horizon and our policyholders have an ‘abundant surplus’ is just plain wrong — those reserves have only enough to cover 75 days of claims or just a single day of hospital care for every person Horizon insures. Moreover, the company’s net income was less than 1% of revenues in 2016,” the statement said.
“Despite being structured as a not-for-profit, Horizon paid more than half a billion dollars in federal, state and local taxes last year,” it said.
Another point the non-profit made was that it has remained in the state, despite the challenges of operating under the rules and regulations of Obamacare.
“While other insurance companies have left, Horizon has stayed in the Affordable Care Act marketplace demonstrating our commitment to New Jersey,” it said. “Instead of taking our members’ reserves, we should partner to create a permanent and stable source of revenue to help New Jersey’s less fortunate by tackling, once and for all, the $1 billion dollar out-of-network billing abuse and surprise medical billing problem.”