Senate Approves Another "Blues Merger Oversight"

HB 966 includes modified version of previous legislation

In an effort to prove that the third time is a charm, the Senate today (June 30) 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.

"It is extremely unfortunate that this issue is still on the table at this late stage of the game. We have been working for months to put this regulatory oversight in place. This issue is much too important to be allowed to languish through the summer," Senator White said. "This is the third time that the Senate has approved this bill and we are still waiting for the House to take the appropriate and necessary step of forwarding it on to the Governor's desk for enactment."

House Bill 966 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.

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."

Contact:

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