Horizon customers get $40.5M back after health costs were lower than expected

Dec. 13--As the deadline for open enrollment in Obamacare approaches, Horizon Blue Cross Blue Shield of New Jersey provided some holiday cheer: Its customers who purchased a policy from the company last year will share $40.5 million in rebates.

The company said Thursday that 148,000 individuals will get checks averaging $95, and 29,000 small business customers will get checks averaging $898.

"We believe very strongly that (Horizon's most popular insurance plan) has lived up to its billing of being able to control costs," said Michael Considine, vice president of consumer, small group and mid-sized markets.

Newark-based Horizon is the state's biggest health insurer, with about 3.4 million members, but the rebates are only for customers who purchased individual or small group policies. They are expected to be mailed by the end of the month.

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The rebates will arrive as lawmakers, consumers and the health care industry continue to search for ways to put the brakes on costs.

The House of Representatives Thursday passed a bill sponsored by U.S. Rep. Frank Pallone, D-N.J., that in part would allow the federal government to negotiate prices with drug makers for Medicare recipients.

Watch Pallone discuss the bill in the video at the top of this story.

"Over the past year, I've held 15 town halls across Burlington and Ocean counties, and the number one issue I hear about is the cost of prescription drugs and health care," U.S. Rep. Andy Kim, D-N.J., said Thursday, explaining his vote in favor of the bill.

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Consumers who don't get health insurance through Medicare or their employer have another decision to make. The deadline to sign up for Affordable Care Act coverage for 2020 is Dec. 15. Without it, they will pay a penalty of 2.5% of their household income, or $695 per adult and $347.50 per child, whichever is higher.

About 106,000 New Jerseyans had enrolled through Dec. 7, about 10% lower than the same time a year ago, according to government statistics.

Deadline approaching: Want health insurance for 2020? Sign up ends Dec. 15

Name brand drugs: Pallone touts his bill allowing feds to negotiate drug prices

AmeriHealth New Jersey and Horizon have the two biggest shares of the individual market, with Oscar also trying to win customers.

Horizon's rebates aren't just a matter of being nice. State law requires health insurers to spend at least 80% of their premiums on claims. When actual health care costs come in lower than expected, Horizon provides rebates.

Company executives, however, say the rebates are a sign that their bid to rein in costs is paying off, particularly through Omnia, a plan that provides financial incentives for hospitals and doctors to deliver high-quality, less expensive care.

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Horizon earlier this month said more than 1.7 million customers are in what it calls a value-based program, which has led to higher rates of preventive medicine.

Those patients have a 6% higher rate of breast cancer screenings and a 4% higher rate of cervical cancer screenings. And they are getting more immunizations, weight counseling sessions and child wellness visits, the company said.

Michael L. Diamond is a business reporter who has been writing about New Jersey's health care industry for a decade. He can be reached at 732-643-4038; mdiamond@gannettnj.com; and @mdiamondapp.

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