TRENTON, N.J., May 12 – Three State Senators have accused Horizon Blue Cross/Blue Shield of hoarding up to $500 million more in its surplus than needed and want any excess to be sued to fund state health programs.

This was the latest eruption in the battle between Horizon and Democrat legislators about the size of the surplus that is now at $1.25 billion.

State Insurance Commissioner Steven Goldman said, in response to news inquiries, that he would be reluctant to mandate a smaller surplus because it might threaten the companys solvency.

The three Senators urging legislative oversight of the surplus are Loretta Weinberg (Bergen County); Ellen Karcher (Monmouth County), and Barbara Buono (Middlesex County), all Democrats.

Weinberg has been a constant critic of Horizon and wants the state to limit the size of its surplus. She said, Our goal is to shut down any hoarding so Horizon cant shirk its mandate to expand access to quality health care while keeping rates affordable. I sense theres up to $500 million available in Horizons vaults that could be freed up to help people get access to health care.

Buono said, Somethings gone amok with the concept of a non-profit health service corporation like Horizon when its surplus grows hundreds of millions of dollars a year, but its rates keeping rising too.

Karcher said, We need to check the books and spread the wealth to those who need it most.

Reserves Are Necessary

Horizon spokesman Thomas Rubino said the surplus is equivalent to one and two third months of the yearly claims paid by Horizon. He said yearly claims in 2005 reached $9.3 billion and the surplus is about 14 percent of that claims-paid total.

Rubino said the existing reserve of $1.25 billion could easily be emptied by a bird flu epidemic or a terrorist attack. He said the reserve is a safety net maintained to cover unexpected increases to future health care claims. He also said, Any action to raid the reserves paid by policyholders would not only be illegal, but would weaken the financial security of the states entire health care system.

Horizon is the states largest health insurer with 3.2 million members.

Weinberg said Horizon has to be held accountable to its unique status " as the recipient of special treatment by the state as a non-profit corporation, and also a corporation with the special responsibility as the states largest health insurer " to keep its charitable commitment.

Horizon was defended by Republican legislators Senator Robert Littell (Sussex County), and Senator Gerald Cardinale (Bergen County). Littell said if there is any excess surplus it should be used to lower rates. Cardinale warned that too little a surplus could threaten insolvency. Cardinale said, To return to the bad old days of the 1980s is the height of irresponsibility on the part of the Democrats in the Legislature.

Action in Legislature, Courts

One bill that Weinberg and Karcher sponsored would cap Horizons surplus at a safe level set by the Insurance Department and allocate the excess to charity care.

The second measure to be introduced would authorize the department to investigate Horizon, determine a suitable surplus amount, and then direct its excess funds to a special Quality Health and Wellness Fund that would use the money to pay for existing state health programs.

Horizon and the Democrats in the Legislature are already fighting in court to determine whether a special premium tax imposed against Horizon last year is constitutional. Under that tax, Horizon is paying $35 million extra in premium tax " a higher level than is assessed against other health insurers in the state.