Good morning, Chairman Schaer, members of the committee. 

Thank you for the opportunity to testify this morning.  My name is John Leyman.  I am the Director of Government Affairs at Horizon Blue Cross Blue Shield of New Jersey, the state’s oldest and largest health insurer serving over 3.6 million members. 

I am here today to convey Horizon’s opposition to both Assembly Bill 3729 and today’s proposed amendments.  This legislation makes a variety of changes to the law that governs how a health service corporation may convert to a for profit corporation.

Enacted in 2001, the existing law contains a process that is transparent, fair, detailed, and adequate.  Moreover, the Attorney General and Commissioner of the Department of Banking and Insurance are doing a thorough job of assessing the appropriateness of conversion and making their determination on behalf of the State and its citizenry. 

With respect to the amendments, one provision deals with public hearings.  Existing law already provides for multiple public hearings and the Department of Banking and Insurance and the Attorney General have already announced publicly their intentions to hold multiple public hearings across the state.  Therefore, there is no need for this provision of the bill.
 
A second provision requires a health impact study to replace the originally proposed fairness analysis.  The Department of Banking and Insurance has already announced publicly their intent to hire the Rutgers Center for State Health Policy to conduct a health impact study.  Therefore, bill language requiring an analysis already being done – does not seem necessary.  

The third provision and the most onerous is the creation of a new “intervenor” and mandates the Department of the Public Advocate to assume this role.  The amendments stipulate that the Public Advocate’s involvement is “in representation of and to protect the public interest.”  What is not clear is why an additional department is necessary to represent and protect the public.  This is posed given the current law’s involvement already of two state departments that seek to represent and protect the public interest – the State’s Attorney General’s Department of Law and Public Safety and the State’s Department of Banking and Insurance. 

In addition to a third department joining an already existing process, there is a proposed associated cost to what is already a very expensive process.  Since the Department of Banking and Insurance would be the Public Advocate’s source for Horizon related data and the Department of Banking and Insurance and the Attorney General both already have hired outside experts from all relevant categories, the Public Advocate should be able to use existing resources without the creation of an additional 30 percent in charges.

Finally, the requirement of a third department’s involvement is difficult to understand when the State’s financial condition should necessitate the most efficient use of limited resources. 

For these reasons, the inclusion of a third department in the process suggests this provision of the bill is unnecessary and duplicative.
In closing, I want to underscore the point that Horizon BCBSNJ is absolutely committed to an open conversion process.  We post information for the public on Horizon’s designated website and the State posts information on its site.  Both websites provide, among other documents, the conversion application, the charitable foundation plan, and requests by the AG and DOBI for additional information as well as the responses to their requests. 

We hope you will conclude, as we do, that the existing law is working and ensures a thorough, fair and open process – and ask for your opposition to the bill and the proposed amendments. 

Chairman Schaer and members of the committee, thank you for your time and consideration of our views.