Health purchasing alliances clear another hurdle


Published:

It’s almost official. Members of chambers of commerce and trade groups should soon be able to form alliances to purchase health insurance for their workers, in the hopes of increasing bargaining power and lowering administrative and overhead costs.

A House and Senate conference committee hammered out their differences on Senate Bill 408, paving the way for both chambers to vote on the final compromise on June 2. The expectation is that the bill has clear sailing there, and should be signed from the governor.

SB 408 would allow purchasing alliances to be formed by organizations that have been around a decade or more to purchase insurance, preventing newly formed groups to form solely with the goal of offering health insurance to members.

There would be an application process, along with a lot of disclosures to the Department of Insurance and enrollees, and the alliance would have to make convincing case to the Department that it could get insurance cheaper than its members can doing it on its own. The alliance would only be able to buy insurance -- it wouldn't be able to purchase health care services directly and act like an insurance company. It also has to show it is "financially strong and has competent management."

While the measure technically would take effect the moment it is signed into law, it is expected that the Insurance Department will have to draw up rules, which could take months.


 

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