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Auditor to review State Health Plan finances

Posted July 24, 2008

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— State Auditor Les Merritt said Thursday his office would conduct a performance audit of the state employee health insurance plan, which experienced a financial meltdown in recent months.

Lawmakers thought the State Health Plan had a $50 million surplus until learning last month that it actually had a $65 million shortfall. Analysts have projected a $250 million deficit within a year.

“This audit was prompted by the $115,000,000 disparity between the initial forecast and the current projection and will focus on oversight and financial forecasting” Merritt said in a statement.

The State Auditor's Office has received numerous phone calls requesting an audit of the plan, he said.

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 blamed a combination of rising health care costs, mismanagement and poorly founded projections for souring the health plan's finances so quickly. They had suggested making state employees pick up some of the tab for the deficit through higher co-pays, but they backed off that proposal after intense lobbying from state workers and public school teachers.

The plan's administrator was fired early this month because the plan failed to meet its fiscal goals.


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  • whatelseisnew Jul 24, 2008

    spartanpirate - It is always nice to communicate with fools. Administers can in fact hold a lot of meanings. Maybe you need to find a dictionary or get some common sense and manners. For your apparent needed edification, here is one meaning "dole out some money" Is that plane enough for you oh arrogant one.

  • selmapiper Jul 24, 2008

    After reading the comments about the insurance issue, it makes you wonder who looking out for who? We've often heard that if you don't look after your self nobody will. We entrust ourselves to the state of NC. Everyone knows whats to come. Another rate increase, but to who. If you want any type of insurance you have to pay the cost. By the way who's cost is it and how can a country similar to the US pay Health insurance for everyone? Make you wonder. State employee's you can be thankful for the raise, but don"t exspect to see it for several years.

  • bonowell Jul 24, 2008

    What is more interesting here is the lack of information about the whole problem. What service areas in the plan have increased? Could there be fraud and abuse in the bililngs by some medical providers? Are some of the negotiated rates with medical providers too high? Is anyone looking at the paid claims data and trying to manage this? Seems like all I read or hear from the news media is the report of the shortfall and no investigative reporting into where the problem originates.

  • mwpotter2 Jul 24, 2008

    I think the real solution is pretty simple, use the health plan to reward people for living a healthier life. In my opinion way too many State Employees live unhealthy lifestyles and it ends up driving the cost of insurance up. If you’re a smoker or overweight you should have to pay a higher premium than a non smoker or someone who stays in shape. Once they stop smoking or get in better physical shape the premium should go down. It’s the people who don’t care about their health in the first place who cause most of the problem.

  • Pilot Jul 24, 2008

    Programmers occasionally see an error called "check sum". In this case I think the auditors need to "check sum" POCKETS!

    Had enough yet Noth Calina?

  • spartanpirate Jul 24, 2008

    Spartanpirate - the article said "It also administers N.C. Health Choice, which provides coverage for 122,000 uninsured children statewide." My interpretation of that is these are not children of State Employees. Perhaps I am misunderstanding that point.

    ADMINISTERS is the operative word. DHHS foots the bill. Learn the kings english and look the word up in the dictionary if you don't know what it means.

  • spartanpirate Jul 24, 2008

    The Health Choice that you are speaking about if through DHHS. They piggyback with the State Health Plan. Claims are paid by BCBS out of the SHP Checking account. Before checks are cut the Dept. of Health and Human Services transfers funds to cover claims that are Health Choice Claims. No funds from the State Health Plan budget/income is ever spent for Health Choice. Blame DHHS for the program and not the SHP.

  • walt4ncsu Jul 24, 2008

    Maybe one of the problems here begins with "BC", ends with "NC", and ever-so-fittingly has "BS" in the middle!


  • OLD PIRATE 2 Jul 24, 2008

    I'm on the plan and need a $500 piece of medical equipment. I have the necessary precription for the device. Blue Cross wants me to have a $6000 medical procedure to see if I need the device. (which I have used for 7 years). I've complained and gotten nowhere, must take the test first.

  • neason2001 Jul 24, 2008

    They need to terminate the NC Health Choice program for unensured children. Their parents need to step up to plate and cover them on insurance if they want insurance. All they are doing is turning to State Employees to cover the cost of insurance for these children. I have to pay over $400 a month to cover my family. They need to do the same and quit using the State Employees money to cover these children.