Local Politics

Lawmakers back off co-pay increases for state workers

Posted July 16, 2008

— After intense lobbying from state workers and public school teachers, North Carolina lawmakers on Wednesday backed away from a proposal to raise employee co-payments to cover growing losses by the state employee health insurance plan.

Lawmakers thought the State Health Plan had a $50 million surplus until learning last month that it actually had a $65 million shortfall. After further study of the plan's finances, analysts said Tuesday the plan could have a deficit of about $250 million within a year.

The plan's administrator was fired two weeks ago because the plan failed to meet its fiscal goals.

The State Health Plan provides medical insurance for almost 650,000 state workers, public school teachers and retirees. It also administers N.C. Health Choice, which provides coverage for 122,000 uninsured children statewide.

Lawmakers suggested making state employees pick up some of the tab for the deficit through higher co-pays. The extra $5 to $10 per visit could generate about $40 million in additional revenue a year, officials said.

State Health Plan members bombarded lawmakers with angry phone calls and e-mails after learning of the proposal to raise co-pays.

"Our members have let the Legislature know unequivocally that they will not stand by with manufactured numbers creating cost-shifting to them," said Ardis Watkins, legislative affairs director of the State Employees Association of North Carolina.

"The e-mail consists of frustration, anger, downright outrage," said Rep. Ty Harrell, D-Wake.

House Majority Leader Hugh Holliman said that Wednesday morning, after a caucus of Democratic House members, it was clear the idea would fail if brought to a vote, so it was taken off the table.

"We owe it to our state employees not to make a change this quickly," Holliman said.

Saying the plan was "on intensive care," Holliman said lawmakers would have to dip into the state's reserve fund to shore up the health plan's finances and devise a different long-term solution next year.

"This problem will not go away. It's going to be there when we come back next year, and we're going to have to deal with it," he said.

Lawmakers blamed a combination of rising health care costs, mismanagement and poorly founded projections for souring the health plan's finances so quickly.

George Stokes, the former State Health Plan administrator, has maintained the plan isn't in financial disarray, and SEANC officials also question the doomsday numbers fiscal analysts have presented to lawmakers.

"They're not positive where the problem is. They just keep giving a number that seems to be completely false," Watkins said.


This story is closed for comments.

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  • mpheels Jul 18, 2008

    If you look at the pay bands for state employees, they are set at below-market rates. The State pays less that private sector, but insurance is part of the package that brings compensation back to market levels. We are required to participate in the state health program, the premium may not be a line item deduction on the pay stub, but it definitely comes out of our pay. If I worked for the private sector I would be making $5-10 more/year, but I would have to pay more for health insurance, so it evens out somewhat.

    I think most employees would accept the 2.75% increase in the context of a rough economy if it didn't follow years of paltry increases or no increase at all (instead we got "bonus leave") when the economy was doing well. And yeah, we call and write letters to out "employer" when the legislature gets ready to do something like increase co-pays, but when private sector employees go up for annual review you can talk to your boss about a raise, we don't get to negotiate a raise

  • kenshi Jul 17, 2008

    I have worked in private industry as well as state. I am a research scientist and I now work at UNC Chapel Hill. Heres the thing for those of you that really seem to like over generalization... research pays for its own wages but the State tells us what we can make. We write grants that cover all our salaries and expenses and on top of that the University takes out overhead charges (similar to paying rent). SO why shouldn't I get good health care and why should I have to pay more co-pay? The taxpayers are NOT paying my salary or for my health care. I am paying for it with the grant money I bring in. When I was in the private sector my health care coverage was better than it is as a State employee and cost less. There are tens of thousands of people that are State employees that are in the same situation as me at all the state universities and UNC system. So get off your high horse.

  • ezLikeSundayMorning Jul 17, 2008

    TheAdmiral, state employees are like treasury bonds, nice and safe, not big returns, but safe. Private industry is like the stock market, up and down, but overall a better return. So just relax, we all choose what suits us. If the state was that great a deal, then the state would have no trouble finding fantasically qualified candidates for jobs. If the state paid that poorly, they would just have to take anyone off the street. Clearly it is somewhere in the middle. Private industry is in a downturn and state agencies will benefit with some great hiring for awhile, but most will jump ship when private industry rises again.

  • livermanr Jul 17, 2008

    I am a state employee and currently have 3 specialist doctors I see. There is no way I can afford 60.00 per visit to each specialist.I would have to go to not seeing the doctor at all. I would have to rely on the great physician for all my health needs. By the way even though the employee gets health care free I still pay for my children which is 200.00 per month.

  • Timbo Jul 17, 2008

    TheAdmiral, you think the legislators are pandering to one of the largest voting blocks??? No way.

  • TheAdmiral Jul 17, 2008

    If I don't get a fricken pay raise - they don't get a fricken pay raise.

    If I get a pay cut - they should get a pay cut.

    After all - THAT is fair!

  • ncguy Jul 17, 2008

    State employees need to get over themselves. They are turning into a labor union. The rest of us have no say in wether or not your copay goes up- Either pay it or find it somewhere else.

    Hey and who ever said they have to pay 600 a month for family care is getting a deal. Try like 1,000 a month in the private sector...

  • asdfg Jul 17, 2008

    Here's a link to see the policy state employees actually get. It would cost me nearly $500 each month (out of my pocket) to insure my family and that's for the standard 80/20 policy that is offered.


  • ptmorris Jul 17, 2008

    I am just cracking up at some of these comments. Not many people really understand their own health insurance costs and now they are pretending to understand that of state employees. The new health plan (PPO) for state employees was written in a very tricky manner. If any of you think that they are not paying out the wazoo, you are nuts. With copays for doctor, hospital, meds, coinsurance payments, and so many more items, the cost is astronomical. Private sector & the city have far better coverage. Then some of you talk about how as taxpayers, you pay state employee salaries. Can we say DUH! State Employees are taxpayers and help to pay their OWN salaries. Fools, fools, fools.

  • karrguy77 Jul 17, 2008

    your obviously pretty ignorant if you think state employees are living high on the hog. Apparently your confusing the working mass with the Easleys. Our co-pays are not $5, but more like $20 to $50. As far as the cushy perks, well my son doesnt have health insurance, because I cannot afford it!!!!!!!!!!!! but I can sure pay for all those lay around and have kids welfares moms bills. But then think what you will because apparently no matter what your opinion is formed about state employees.