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Christie renews push to tap Horizon Blue Cross funds

The Republican governor, who has sought to tap the reserves of the state's largest insurer to pay for drug treatment for the poor and uninsured, drew attention to fines levied by the state against Horizon.

Gov. Christie has proposed using Horizon reserve funds for drug treatment.
Gov. Christie has proposed using Horizon reserve funds for drug treatment.Read moreAP/Matt Rourke

TRENTON — Gov. Christie on Wednesday renewed his push to tap the reserve funds of Horizon Blue Cross Blue Shield of New Jersey, nine days before the state budget deadline. He has proposed using the money for drug treatment of the poor and uninsured.

At a news conference, the Republican governor drew attention to fines levied by the state in the last two years against Horizon, including a $15.5 million notice of sanction served Monday. Christie said the sanction was related to the insurer's handling of Medicaid claims.

"We should not permit a nonprofit insurer to profit from ignoring the poor and those who give them the life-enhancing and life-sustaining health care that they need at taxpayer expense," Christie said.

He argued that Horizon needed "to be held answerable" by legislation that would add public members to its board — and also allow the state to transfer "excess profits" from the insurer into a new fund.

That legislation has not been formally introduced. Christie said Wednesday that lawmakers had agreed to sponsor the bill, but he declined to name them.

He also declined to say whether he had conditioned his support for a new public school funding plan on lawmakers' backing the Horizon bill.

"I don't talk about the negotiations I have" with legislative leaders, Christie said.

In private, Christie has told Democratic legislative leaders that he will agree to the broad contours of their school-funding plan — which would send more state aid to underfunded districts while shifting funding from others — in exchange for their support for two of his priorities, including tapping Horizon's reserves, according to two sources familiar with the negotiations. The other priority is transferring the state lottery to the pension system, which Christie's administration says will reduce the state's pension debt.

Speaker Vincent Prieto (D., Hudson) has won support in the Assembly Democratic caucus for the lottery proposal but not for Horizon, according to one of the sources.

As a big insurance company, Horizon isn't a natural ally of the Democratic Party – but it's more popular among most Democrats than Christie, who's leaving office in January.

The Horizon proposal is supported by Senate President Stephen Sweeney (D., Gloucester) and other South Jersey Democrats, who have clashed with the insurer. But their support alone may not deliver Christie a win.

While the proposal has yet to be introduced, "we have nine days left," Christie said, referring to the June 30 budget deadline. "Lots of things happen in Trenton in a very short period of time."

In a statement Wednesday, Horizon said it had resolved problems related to a new Medicaid claims-processing vendor and planned to challenge the Department of Human Services sanction.

Christie's comments "strongly suggest that this is further retaliation for Horizon's unwillingness to submit to his demand for $300 million from the reserves we hold to protect our members and an abuse of power," said Horizon spokesman Kevin McArdle.

Horizon, which provides health insurance to 3.8 million New Jerseyans, says it had $2.4 billion in capital reserves at the end of 2016. Raiding the company's reserves would force it to raise premiums, according to the insurer.

Conservatives have criticized Christie's proposal to tap Horizon's reserves, a push he began in February. On Twitter Wednesday, publisher and former presidential candidate Steve Forbes accused Christie of "bullying."

Christie said Wednesday that the sanctions against Horizon — including fines levied by the Department of Banking and Insurance totaling $550,000 — were "independent actions" by the agencies. He also said reserve funds would not be taken from Horizon until next year, after he leaves office.

"What they really fear is greater independent governance and greater transparency," he said of Horizon.

The governor, who last week nominated longtime ally and Choose New Jersey CEO Michele Brown to the insurer's board, said his recent nominations "had nothing to do" with his announcement Wednesday.