CHARLESTON, S.C. — A doctors’ practice based in Charleston County is launching its own, in-house insurance plan to reduce employees’ health care costs.
Palmetto Primary Care Physicians will offer the plan to its 600 employees starting Friday, reports The Post and Courier of Charleston.
Palmetto CEO Jeff Lehrich says he decided to dump the practice’s coverage through BlueCross BlueShield of South Carolina because of rising rates. The practice was already contributing, on average, $1,200 monthly per employee for a plan many of the group’s employees couldn’t afford.
“I was like ‘forget this,’” Lehrich said after receiving notice of a rate hike. “I’m not going to do this.”
The in-house plan is expected to be at least 55 percent cheaper than the insurer’s equivalent. Employees who are only insuring themselves will see the biggest savings, said Physicians’ spokeswoman Vivian Barajas.
“It’s kind of like getting a mini-raise for us,” she said.
A spokeswoman for BlueCross BlueShield says it’s the most cost-efficient insurer in the state.
“We are unclear how Palmetto Primary Care Physicians will achieve major cost savings in this environment,” Patti Embry-Tautenhan said.
Much of the blame for escalating insurance rates is attributed to changes the federal health care overhaul requires in 2014. Plans sold or altered since the law’s 2010 passage must cover 10 benefit categories it deems essential, including an array of preventive services that can’t require a copayment or that a deductible be met first, such as health screenings, counseling, and immunizations.
Because of the law’s requirements for broader coverage and changes in how rates are calculated, officials caution against comparing existing insurance plans to those effective after Jan. 1.
“It’s apples and oranges,” Lehrich said. “All those things cost money.”
But he also suspects a lack of competition in South Carolina contributes to high rates.
BlueCross BlueShield of South Carolina dominates the state’s insurance market. According to the Kaiser Family Foundation, the company had more than 90 percent of the large group health insurance market, 70 percent of the small group market and 55 percent of the individual market in South Carolina.