House panel OKs health plan bailout
Posted April 2, 2009
RALEIGH, N.C. — Despite objections from a group that represents state workers, a key House committee on Thursday approved a proposed $687 million bailout of the state employees insurance plan.
Senate Bill 287 calls for propping up the financially troubled State Health Plan through a combination of higher premiums, fewer benefits and an immediate infusion of $300 million in state cash.
The plan, which provides health coverage for 667,000 state workers, teachers and retirees, has seen its deficit balloon over the past year, and its director said the plan would quickly become insolvent if lawmakers didn't act.
The State Employees Association of North Carolina has balked at the proposed legislation – the group even aired $10,000 of critical radio ads – saying government workers would bear the brunt of the cost while Blue Cross Blue Shield of North Carolina, which administers the plan, would sacrifice little.
"We think Blue Cross Blue Shield should come to the table and share in some of the pain. Their CEO, Bob Greczyn, is making over $4 million a year," SEANC Executive Director Dana Cope said.
Blue Cross has responded with its own ads, and Greczyn spoke to the House committee Thursday to defend himself and his company. He said criticizing his financial compensation wouldn't solve the health plan's core problems.
"I think they have intentionally mischaracterized a lot of the things that have gone on," Greczyn said of SEANC. "We provide a lot of service to State Health Plan members, and we've done that for more than 20 years. But we're not responsible for the pricing, we're not responsible for the benefits, and we're not responsible for the actual areas of the plan."
Cutting Blue Cross' contract price by 10 percent would put 120 jobs at risk, he said.
Lawmakers said a reduction of benefits and increases in premiums are needed to keep the health plan afloat for the next two years.
"I understand families have a hard time with the premiums and the health care costs, but the premiums just reflect the costs," House Majority Leader Hugh Holliman said.