Proposed bill would help even out competition among health insurers

Published on March 20, 2013

By Lauren Sausser, The Post and Courier

South Carolinians covered by companies other than Blue Cross Blue Shield could see lower health insurance premiums if a proposed bill is signed into state law.

Senate Bill 145 is attempting to even the playing field among competing companies in astate that is dominated by one health insurer.

BlueCross Blue Shield writes almost 45 percent of the health and accident insurance premiums here.

Thenext largest company in South Carolina, United Healthcare, claims less than 10 percent of the market share, according to the S.C. Department of Insurance.

The new bill would prohibit insurance companies from writing clauses into their contracts with health care providers that obligate doctors and hospitals to charge lower rates for patients insured by that company and equal or even higher rates for patients insured by the competition.

The Post andCourier first reported in 2011 that these clauses, known as “most-favored-nation” clauses, are being investigated by the federal governmentas potentially anti-competitive.

The proposed bill will be taken up for discussion in the Senate Banking and Insurance subcommittee today — the first step toward a vote by the full General Assembly.

Buteven Sen. Shane Massey, R-Edgefield, the bill’s sponsor, admits it’s a long shot because Blue Cross Blue Shield has “a pretty significant lobbying arm.”

“Thegoal is really to make the private health insurance market more competitive,” he said. “With competition, you’ll get lower prices and better service for consumers.”

PattiEmbry-Tauten, a spokeswoman for Blue Cross Blue Shield, said the company is communicating its position on the bill to the Legislature that most-favored-nation clauses are “an appropriate and legal tool.”

Embry-Tauten said the company’s contracts with health care providers are confidential, but “the majority of our hospital contracts do not contain (most-favored-nation) agreements.”

Frank Knapp, president of the S.C. Small Business Chamber of Commerce, said hisorganization supports the legislation but cannot predict its fate.

“This is the long-awaited first step,” Knapp said. “We will have a better sense of (the bill’s future) after (today).”


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