PIERRE | National health insurers would be banned from participating in the state's health exchange, a key component of Obamacare, under a bill passed unanimously Thursday in a Senate committee.

Senate Bill 139 was introduced by Sen. Ried Holien, R-Watertown, who said it has broad support in the Legislature.

“Everyone has come on board with this,” said Holien, who added that the bill’s purpose is to preserve competition and protect consumers because it guarantees they can talk with an insurance agent.

The Senate Commerce and Energy Committee voted 6-0 to recommend the legislation’s passage. The full Senate could consider it as early as Thursday afternoon.

Before the vote, the committee heard testimony from a half-dozen independent agents and insurance lobbyists. No one testified against the legislation.

South Dakota has about 1,500 independent agents. One of the larger insurance businesses based in South Dakota that would be protected is Great Plains Brokerage, which handles the Sanford health plan.

The only senator to speak specifically in favor of the plan was Republican Mark Johnston of Sioux Falls, who is employed by Sanford. He said the bill would be “protecting the industry, protecting these great small businesses.”

The bill does allow multi-state plans to participate in the state exchange but prohibits them from offering products on the open market in South Dakota.

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A third key element in the legislation requires that any plan sold through the South Dakota exchange must be placed through a state-licensed insurance producer and the commissions paid must be the same for a plan sold through the exchange as for a similar plan sold outside the exchange.

The bill’s sponsor list shows the names of 27 of the 35 senators and 48 of the 70 House members. The lead House sponsor is Republican Justin Cronin of Gettysburg.

The health insurance exchange — an online marketplace where individuals and small businesses can buy health insurance — is part of the Patient Protection and Affordable Care Act of 2010, also known as Obamacare.

The exchanges must be in place by January 2014. Gov. Dennis Daugaard has said the state will allow the federal government to operate the insurance exchange while hoping to retain its regulatory abilities.

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Opinion page editor

Opinion editor for the Rapid City Journal.