Committee Approves Another "Blues Merger Oversight"

HB 966 includes modified version of previous legislation

Reacting to the legislative inertia of the Rendell Administration, the Senate Banking and Insurance Committee today (June 28) approved yet another bill intended to provide state oversight of proposed mergers involving non-profit health insurance companies, according to Senator Don White, Chairman of the Senate Banking and Insurance Committee.

The amended version includes most of the language previously approved by the Senate in Senate Bill 550 (Senator White's original bill, approved by the Senate in March) and House Bill 112 (approved by the Senate in May), but was adapted to meet what are seen as the Administration's concerns about the legislation.

"The Senate has twice shown that we want this oversight and I honestly believe that a majority of the House membership wants to pass legislation that provides the essential regulatory review of the proposed Highmark and Independence Blue Cross merger," Senator White said. "However, it's clear that the House majority leadership is closely aligned with the Governor on this issue. While he's made it clear that he does not like our proposals, the Governor has never said exactly what's wrong with the legislation, nor has he offered meaningful alternative language of his own."

A key provision within HB 966, as with the previous versions, is the requirement that any merger involving the "Blues" be subject to approval by the Department of Insurance. While the Insurance Department would hold final approval -- or denial -- authority for a merger of non-profit health insurance companies, the bill also establishes an Insurance Restructuring Public Interest Review Board comprised of representatives from the Auditor General's Office, the Administration, and the four caucuses of the General Assembly, as well as a policyholder to provide recommendations to the Department.

Two additions to the latest bill include a requirement that the board make its recommendations no later than August 31, 2008 and a sunset provision that would disband the board 90 days after the Department of Insurance ruling on the merger.

In response to concerns by Banking and Insurance Committee members about the previous bill, the amended version of HB 966 drops a requirement that the Department of Insurance develop a written determination that the merger or consolidation will result in a "sustained reduction in health care premiums." Instead, the Department must determine the merger will provide "sustained benefits."

Finally, the legislation removes the requirement for a retroactive review of the total amount the non-profit organizations dedicate to social mission.

"I hope these changes will finally give us the momentum to push this legislation forward," Senator White said. "The lack of communication with the Governor on this important issue leads me to fall back on the wise words of Yogi Berra who said, 'You've got to be very careful if you don't know where you're going, because you might not get there.' But, in this case, the millions of Pennsylvanians who are policyholders of Highmark and IBC can not afford for us to 'not get there.' The competitive marketplace that ensures quality services and reasonable prices can not afford for us to 'not get there'."

"We need to 'get there' as quickly as possible," Senator White said. "We need to establish clear oversight powers regarding this merger and so it is 'déjà vu all over again' and we are working for the third time to put this legislation in place. We take this issue seriously and I hope the House and Rendell Administration also will."

Contact:

Joe Pittman
(717) 787-8724 or cell (724) 541-0552