Perdue, lawmakers strike deal on State Health Plan
Posted May 18, 2011
RALEIGH, N.C. — Legislative leaders and Gov. Beverly Perdue reached a compromise Wednesday to overhaul the health insurance plan for state workers, teachers and retirees.
The deal would use reserves in the State Health Plan to provide members with premium-free individual coverage for the 2011-12 fiscal year.
The plan, which serves more than 660,000 state employees, teachers, retirees and dependents, has been in financial trouble for years. It’s projected to lose more than $500 million by the end of the next two-year budget cycle unless lawmakers make changes to it.
Perdue last month vetoed a bill calling for individual premiums for State Health Plan members, calling it a tax on teachers.
The House approved new legislation last week that also requires all active employees and teachers to pay a monthly premium for their own insurance for the first time. Premiums would range from $5 to $21.63 per month, depending on which of the two coverage policies members choose and whether they have Medicare.
After earlier insisting on premiums for everyone, the Senate amended the bill to allow the plan to offer the less generous policy to active workers and teachers without a premium for the next two years.
The Senate passed the bill 33-16 on Wednesday afternoon and sent it back to the House for a final vote, which could come as early as Thursday.
Jack Walker, the administrator of the State Health Plan, said the plan has an extra $40 million to $50 million in cash reserves, which should be enough to cover the move.
Because the legislation also shifts oversight of the health plan to the State Treasurer's Office and a new board of trustees, Walker recommended forgoing premiums for the first year and allowing the new board to decide whether to continue the practice in 2012-13.
“For years, the State Health Plan has been on the verge of financial collapse. Today’s compromise will ensure its future stability and manage health care costs for our teachers and state employees without raising taxes,” Senate President Pro Tem Phil Berger said in a statement.