Cumberland County Medical Society pens a letter to MSNJ regarding Horizon BCBS executive compensation
June 2, 2010
Dear Mr. Kornett,
The Cumberland County Medical Society enthusiastically supports the Medical Society of New Jersey (MSNJ), other County medical societies, our Congressional delegation and State lawmakers in expressing outrage at the excessive compensation package awarded to the executives at Horizon Blue Cross/Blue Shield. According to the filing made by Horizon to the state Department of Banking & Insurance (DOBI) and, as reported by Michael Diamond of the Asbury Park Press in a May 19th article, CEO William J. Marino alone will be compensated to the tune of $8.7 million. Furthermore, this compensation package pays the nine senior executives a total of $24.3 million, up from $15.1 million the previous year! Meanwhile, premiums paid by employers and individuals have risen by double digits for the past decade while reimbursement for the services has decreased proportionally.
The State and especially Cumberland County is suffering from record unemployment. Layoffs and furloughs are inevitable. Therefore, statements and actions made by Michael T. Kornett, CEO of the MSNJ, US Senator Frank Lautenberg and NJ Senate President Steve Sweeney are timely and appropriate.
We would encourage all workers as well as all local employers to call and support Sen. Sweeney in his desire to hold hearings so that Horizon executives can justify acceptance of this outrageous compensation given the current economic state of affairs. Please let State Senator Jeff Van Drew and Assemblymen Nelson Albano and Matt Milam know that we cannot afford increased premiums to line the pockets of management of a not-for-profit health insurance company.
Horizon should explain how it can justify premium increases when it has over $2 billion dollars in cash surplus. It is our position that any amount above what is required by statue to be retained in reserve should be immediately returned to policyholders. In addition, we call on the DOBI Commissioner Thomas B. Considine to act on behalf of consumers and reject any future request by Horizon for premium increases.
State legislators should consider empowering the Commissioner with the authority to not only approve rate increases but compensation to management of not-for-profits as well. Also, insurance companies should never be allowed to monopolize. Consequently, they should never control more than 30% of the local market. This was a regrettable oversight by previous Commissioners.
Lastly, the Congress of the United States should draft legislation removing any anti-trust exemption that all insurance companies have enjoyed for the past twenty years.
Insurance companies, regardless of corporate or tax structure should compete for our business. New Jerseyians should be the winners and not the losers of public policy that affects our healthcare.
Donald C. Huston, Jr., DO,
Armando P. Russo, MD,