MONTGOMERY — The Christian Coalition of Alabama and Blue Cross and Blue Shield debated legislation in a public hearing on Wednesday that would allow Blue Cross to create a holding company.
The bill by State Sen. Andrew Jones (R-Centre) would authorize a health care service corporation to reorganize under the ultimate control of a nonprofit holding corporation. The bill passed the Senate unanimously last week.
The bill will be voted on by members of the House Financial Services Committee next week.
Dr. Randy Brinson, president and chairman of the Christian Coalition of Alabama and a gastroenterologist in Montgomery, said the bill was "anti-free market."
"These types of maneuvers insurance companies are doing are to increase vertical integration. Vertical integration you'd think would make more competition, but it actually makes less competition," Brinson said during the public hearing. "Most of the states when they have done these types of transfers, the state has gotten something of benefit from Blue Cross Blue Shield. We're talking about a transfer of wealth of like $1.3 billion dollars."
Brinson continued, "If we open this Pandora's Box by lifting this restriction and changing the status of Blue Cross, what's the next thing that's going to happen?"
"Whenever you expand the ability to do vertical integration, you create less competitiveness, you create market consolidation," Brinson said. "That's going to affect pharmacists and healthcare delivery. It's going to make it more expensive at the end of the day. This bill opens the door. It doesn't say they're going to do it. It allows the door to be opened for that to happen."
Ben Moultrie, a pharmacist and member of the Alabama Independent Pharmacy Alliance, said at the public hearing that he worried the bill "unintentionally creates pathways" to undermine pharmacy benefit manager legislation passed during the 2025 session.
"As I understand it, SB 247 allows a non-profit health insurer to reorganize under a holding company structure. On its face, this may simply be modernization and my concern is not modernization. My concern is what this structure makes possible over time if clear guard rails are not included in this bill," Moultrie said. "Holding companies are designed to create flexibility. They allow subsidiaries, affiliates, or expansion into adjacent parts of health care. In a market like Alabama, where one insurer already holds significant market influence, structure matters because structure drives behavior."
Ted Hosp, vice president of government relations with Blue Cross Blue Shield of Alabama, said the bill has nothing to do with PBM legislation passed last year or vertical integration.
Blue Cross has said its only intent with the legislation is to be in a position to partner with other Blue Plans in other states while remaining an Alabama-based not-for-profit company.
"Nothing about this legislation changes the way Blue Cross, the health plan, will operate," Hosp said. "What we're seeing nationwide in this environment is consolidation. Nationwide, Blue Cross entities are consolidating. Back in the 1990s, there were 77 Blue Cross plans around the country. Today, there are 29. There are only about 20 single-state Blue plans, which is what Alabama is today. That won't be around that much longer. Maybe it's 10 years. At some point, there won't be single state Blue plans. What we're trying to do with this legislation is put ourselves in a position where we can stay Alabama-based, Alabama-focused but increase our ability by combining, affiliating, merging with another state's plan but stay Alabama-focused."
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