The South Carolina General Assembly comes back into session today. Over the next several days I’ll be discussing the Small Business Chamber’s state legislative agenda.
No issue has consumed as much time and energy for us than the issue of health insurance. We’ve made great progress toward helping make health insurance more affordable for small business with the passage of the federal Affordable Care Act in the spring of 2010.
Since the ACA began hundreds of thousands of small businesses have lowered their health insurance costs by taking advantage of the new small business health insurance tax credits. These and other benefits to consumers (such as lower healthcare costs for seniors and over a million young adults now having health insurance) have come without causing dramatic increases in premiums. A new report out yesterday shows that the health reform only contributed 0.1% to the national costs of healthcare in 2010.
However, there is one unaddressed matter that everyone says is important to controlling premium increases—competition.
If we really want competition in the health insurance marketplace, then we must stop the “most favored nation” contract clause that guarantees that no other insurance carrier gets a lower provider compensation rate compared to the one with this clause. The “most favored nation” clause stymies insurance carrier competition that can lead to lower healthcare costs.
But the “most favored nation” clause is more cancerous to competition than just requiring no better compensation rate for other carriers. It can actually require the provider to charge other insurance carriers more—up to 40% more in some states—than what they charge the carrier with the “most favored nation” clause. It is easy to see if we truly want competition in the health insurance industry, we must make the “most favored nation” clause illegal.
Senate Bill 316 would put an end to the “most favored nation” clause. The bill was introduced last year but failed to receive even a subcommittee hearing—the first step in the legislative process—in the Senate Banking and Insurance Committee. I have a meeting with the chairman of that committee, Senator David Thomas, this week. I’ll be asking him to assign the bill to a subcommittee as quickly as possible to give S.316 a chance this session.
If you want to help, contact Senator Thomas and ask him to support S.316 and appoint a subcommittee for the bill. Here is the link to the page with his contact information:
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The sad thing about most budget cuts, be it in private companies or government bodies is that health insurance are among the first ones to go.
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