By Charles Warner, Editor | The Union Daily Times
First in a series
More affordable health insurance and greater consumer input on changes in workers’ compensation rates are among the legislative goals of the South Carolina Small Business Chamber of Commerce (SCSBCC).
In a telephone interview Thursday afternoon, SCSBCC President Frank Knapp discussed the organization’s legislative agenda. Knapp said the agenda includes support for bills currently pending in the state legislature that would make could help reduce health insurance costs and give the public a greater say in the setting of workers’ compensation rates.
“We’ve been involved in these issues for some time, health insurance, workers’ comp continue to be of interest to small businesses,” Knapp said. ”We’ve had success in both areas and there’s some legislation that we’re supporting this year.”
Knapp said the SCSBCC is supporting Senate Bill 316 which would eliminate the“most favored nation” clause in health insurance provider contracts.
“In health insurance there is a bill to increase competition among health insurance carriers that will help control and reduce health care costs,” Knapp said. “It is a bill to outlaw the use of a clause in contracts between health insurance carriers and health care providers called ‘mostfavored nation.’ Essentially, this clause in a contract prohibits the health care provider from giving better service rates to another health insurance carrier. Consequently, only one health insurance carrier can really help drive down the cost of health care if it wants to and that health insurance carrier actually has the incentive to allow costs to increase because they will make more money from the profits of their premiums.”
The SCSBCC website states the most favored nation clause “guarantees that only one health insurance carrier gets lower provider compensation rates than all other carriers.” It states that the Senate bill “outlaws the practice used in South Carolina and other states that requires health care providers to charge other insurance carriers more, up to 40% more in some states than what they charge to a carrier with the ‘most favored nation’ clause in its contract with the provider.”
Knapp said eliminating the most favored nation clause would reduce health insurance costs for both small business and the individual consumer.
“We want health insurance to be more affordable for small businesses and individuals and this bill will help advance that cause,” he said. “We hope the Senate Banking and Insurance Committee will hold a hearing on this but we’re up against Blue Cross/Blue Shield. The other insurance carriers would like to see this passed and so would we.”
Knapp said the SCSBCC is also supporting Senate Bill 31 which would give the public input on both increases and decreases in workers’ compensation rates.
“We have had great success both legislatively and in the courts to control workers’ comp premiums,” Knapp said. “One way we’ve done this is through intervening in the court process in the official approval of rates. The problem is that state law says that the consumer advocate and the public cannot intervene to try to get smaller rate increases, but only if an increase is requested. If the recommendation is for an overall rate decrease the consumer advocate and the public does not have the ability to intervene. So if a very slight decrease in rates is recommended, even though a larger decrease is merited, the consumer advocate and the public can still not intervene.”
The SCSBCC website states that proposed increases in workers’ compensation rates “must be an approved by an Administrative Law Judge in a public hearing if requested by the S.C. Consumer Advocate.” The bill now beforethe Senate would allow the Consumer Advocate to request a public hearing before a judge for any proposed change” regardless of whether itwas an increase or decrease.
“Senate Bill 31 simply says regardless of the rate adjustment being recommended, up or down, the consumer advocate and the public have a right to be involved in the process,” Knapp said. “Obviously we feel the small business consumers ought to have the right to weigh in on any rate adjustment request to keep premiums down.”
A related bill before the SC House (H.3111) that would require workers’ compensation insurance carriers to adopt the most recently approved rates within 120 days is also supported by the SCSBCC. The group’s website states this would close a loophole that currently allows carriers to continue to use old rates rather then the new ones and “collect excessive premiums from businesses.”
Small Business Development
Knapp said the group is also supporting S.1089 which the SCSBCC website states “creates a Division of Small Business and Entrepreneurial Development within the SC Department of Commerce” to help local communities “become more small business friendly by providing expert consultation” at the local level for planning and implementation of pro-small business policies.
“Since 2006 we have advocated that our Department of Commerce use some of its resources to have a comprehensive small business development program aimed at helpinglocal communities become more small business friendly,” Knapp said. “We advocate using an approach put into effect by Republican Gov. Sonny Perdue of Georgia that puts boots on the ground in communities who request assistance. It is just as important to help communities learn how to grow their small businesses as it is to teach them how to attract big businesses.”
The SC Small Business Chamber of Commerce is a statewide advocacy organization with more than 5,000 members that works to make state government more small business friendly. The Small Business Chamber is both non-partisan and non-profit. It does not endorse candidates for public office nor contribute to political campaigns. It is not affiliated with any other chamber of commerce.