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Senators press insurance commissioner on fund transfers and $600M Horizon conversion funds
Summary
Lawmakers questioned Commissioner Justin Zimmerman about large transfers among state health funds, a projected exchange trust fund surplus, and the status/oversight of roughly $600 million tied to Horizon Blue Cross Blue Shield's conversion; Zimmerman said Treasury collects conversion funds and funds are statutorily dedicated, but senators asked for follow-up with Treasury.
Senators used the Department of Banking and Insurance's budget hearing to press for details about how state health funds are being managed and to seek clarity about a roughly $600 million payment tied to Horizon Blue Cross Blue Shield's conversion.
Senators noted the Health Insurance Affordability Fund is slated to collect roughly $213,000,000 and was projected to have a FY25 ending balance near $182,000,000 but would be drawn down by an estimated $125,000,000 under the current plan. One senator said prior transfers have been used to cover deficits elsewhere and asked whether those practices were sustainable and whether the funds could be "raided" for other purposes.
Commissioner Justin Zimmerman said the transfer mechanics were built into how the state established its exchange: federal pass-through funding will cover a substantial share of reinsurance costs this year (his office cited about $600,000,000 of pass-through for FY25 revised projections and an estimated $555,000,000 in another reference), while the Health Insurance Affordability Fund covers the remaining share to avoid tapping the general fund. He said increases to the assessment that funds the health insurance affordability mechanism would require legislative action.
On the Horizon conversion, Senator Skittle asked about the department's role overseeing approximately $600,000,000 tied to Horizon moving toward a mutual holding company. Zimmerman said the department reviewed the conversion under Chapter law and issued conditions in Nov. 2022 but that the Department of Treasury is the agency responsible for collecting the funds; he said his department did not have specific plans to use those dollars and that he was not sure of the funds' current status.
"The department of treasury is the agency that is, collecting, is responsible for collecting the funds," Zimmerman said. "At this time, my department...does not have any specific plans for how to utilize those funds." Senators signaled they would follow up with Treasury and indicated continued interest in statutory protections for dedicated funds.
No formal action was taken at the hearing; senators requested additional documentation and follow-up.
