OPINION: Christie’s Plan To Tax Horizon Ratepayers is Dangerous, Wrongheaded

Only a single legislator (Jay Webber of LD26) had the stones to vote against Trenton’s new opioid health insurance mandate, Save Jerseyans.

Why? A lot of reasons, including the fact that doing something (even if it’s the wrong thing!) to combat the nation’s drug epidemic is rhetorically hard to push back against for the political class.

What’s even MORE disturbing than the mandate itself and its expensive consequences is Governor Chris Christie’s related proposal: a TAX on roughly half of the state’s insurance consumers to create a new “fund” for low-income drug rehabilitation. In case you missed it last week’s budget address, he called on Horizon Blue Cross Blue Shield to contribute voluntary payments, on an annual basis, to this hypothetical fund for low income health coverage:

I am confident Horizon will embrace this opportunity and partner with us to establish this permanent, sustainable fund. They will not turn their back on the people of New Jersey who pay their salaries and, as the people’s representatives, we will partner with them to make sure it happens by June 30.”

Several legislators and plenty of audience members audibly chuckled and it’s not hard to understand why.

A few points to consider….

First of all, the reserves cited by Christie are not an “abundant surplus” for the government to play with. Horizon is a private, non-profit company; its reserves are held IN RESERVE  for payouts in emergent medical circumstances (e.g. mass casualties following a natural disaster like Superstorm Sandy). Horizon maintains this 75-day claim reserve not for CEO bonuses but when shit really hits the fan. Taking cash from the reserves is taking cash away from people who might need it most when the need is the greatest. Horizon paid out $10 billion in claims in 2016. It’s projected pay outs for 2017 are slightly higher at $11.5 billion.The $2.4 billion held in reserve at the end of 2016 work out to approximately $628 for each of the New Jersey insurance giant’s roughly 3.8 million members. Not exactly “abundant,” right?

Secondly, don’t lose sight of the fact that this proposal IS a new tax from a Governor who explicitly promised NOT to raise taxes prior to last year’s TTF shell game. Plain and simple. Horizon paid $213 million in state and local taxes last year. Horizon’s sole source of revenue is premiums. Higher premiums will follow to close the gap between reserves and premiums. “Raiding those reserves will raise the cost of health insurance as if it were a tax increase,” Assemblyman Erik Peterson explained in a statement criticizing the plan. “How much more can taxpayers afford? You would think that at some point the state would learn from past mistakes. What better example of New Jersey’s inability to provide services at a reasonable price than road construction costs, and NJ Transit. When government gets involved the problem gets worse.”

That’s point #3… whether or not you think the motivations behind all of this stuff is sincere, what kind of “conservative” Republican DEMANDS that a non-profit tax itself to pay for a government program? And expects costs, and expenses, to do anything but spiral out of control? Who wants Obamacare repealed in D.C. and yet supports the same type of cost-driving nonsense here at home? I guess the same type of Republican who coaxes unions to take out members of his own party who oppose tax increases.

Fourthly, it’s not simply an ideological thing; the Governor is once again sounding a lot different than the guy we elected back in 2009. He loudly and correctly denounced the Democrat legislature’s raids on the UI Trust Fund and the pension/benefits system. Why is THIS any different than those times? Regardless of what you or I believe?

I could go on and on, Save Jerseyans, and I likely will have to in the unlikely event that this objectively horrible idea gains traction.

Suffice it to say? As we’ve been saying for weeks, all of this opioid-related stuff out of the Governor’s office is a political rehabilitation plan for the Governor, NOT the state’s addicted. The glaring inconsistencies, half-truths and irresponsible accounting articulated above are proof enough. No amount of taxpayer-financed advertising is going to change that.

Dangerous. Wrongheaded. Unhealthy for New Jersey!