South Carolina’s largest health insurer issuing rebates

COLUMBIA — South Carolina’s largest health insurer has begun sending out rebate checks to some policy holders because it failed to meet a requirement of the federal health care overhaul.

Blue Cross Blue Shield of South Carolina said Monday that checks — most for less than $200 — will be sent to individual and small group policy holders during the next two weeks.

The provider, like some others, didn’t spend enough on customers’ medical claims in 2011, according to the terms of the Affordable Care Act.

Blue Cross Blue Shield said it is complying with the law, even though the insurer views the requirement as bad policy.

The spending stipulation doesn’t address the root causes of rising health care expenses, such as waste and fraud and lifestyle choices, a company spokeswoman said.

And Jim Deyling, Blue Cross Blue Shield’s president of private business, said in a statement that “our concern remains that a rebate such as this not only creates a false impression of overpricing, but also reveals the fundamental flaw of the legislation, which is that it does nothing to reduce health care expense for members.”

The director of Gov. Nikki Haley’s Department of Health and Human Services agreed.

“In a health care system where it has been estimated up to 30 percent of health care spending is excess cost, these small rebates may be momentary relief for those who receive them, but they clearly don’t target the underlying reasons for out of control health care costs,” Tony Keck said in a statement.

Haley, like most Republicans, opposes the Affordable Care Act.

Conversely, the president of South Carolina’s Small Business Chamber of Commerce hailed the requirement that forced Blue Cross Blue Shield to issue rebates.

“This demonstrates that the Affordable Care Act, ‘Obamacare,’ health care reform or whatever you call it is doing what it said it would do: help make health insurance more affordable,” said Frank Knapp, a longtime supporter of the law.

Blue Cross Blue Shield held at least 60 percent of the market share in eight of the state’s largest metro areas in 2008, including about 70 percent in the Charleston area, according to a study by the American Medical Association.

Reach Stephen Largen at 864-641-8172 and follow him on Twitter @stephen largen.