Bill blocking State Health Plan changes clears House

The bill would keep state treasurer from cutting state employee health plan payments to hospitals.

Posted 8:57 p.m. Apr 3, 2019 — Updated 10:53 p.m. Apr 3, 2019

Travis Fain

, WRAL statehouse reporter, & Matthew Burns, WRAL.com senior producer/politics editor

RALEIGH, N.C. — A bill to block changes to the state employee health insurance plan, which would have hit hospital bottom lines around the state, cleared the House on a bipartisan vote Wednesday.

House Bill 184 was filed to stop State Treasurer Dale Folwell and the board that oversees the State Health Plan from moving away from secret payment agreements between hospitals and the plan's administrator, Blue Cross Blue Shield of North Carolina, to set payments for procedures.

Folwell said the shift would save hundreds of millions of dollars, with the savings split between taxpayers who subsidize the plan and employees who pay monthly premiums. Hospitals said the cuts were too deep, endangering rural hospitals in particular.

They put together an advertising campaign against the change, calling it a "risky scheme," and backed the legislation to essentially freeze things in place until the end of 2020 so a committee can study the issue.

"We're genuinely, in the end, concerned about health care in rural areas of the state and in all areas of the state," said Rep. Josh Dobson, R-McDowell, the bill's sponsor.

The bill pitted the state's powerful hospital lobby against another strong group at the statehouse: the State Employees Association of North Carolina.

Rep. Pat McElraft, R-Carteret, said she worries about rural hospitals but also about the growing unfunded liability facing the State Health Plan. She suggested implementing Folwell's changes on the largest hospitals in the state and phasing them in over several years at smaller facilities.

"We're asking taxpayers to foot the bill to protect hospitals," McElraft said.

Folwell wants to attach plan payments to Medicare, paying hospitals an average of 182 percent of what the federally funded health insurance plan for senior citizens pays. That would mean more money for some procedures, less for others and a move away from the hospital-by-hospital contracts Blue Cross strikes with health systems on the state's behalf, which keep detailed price information a secret.

Actuarial analysis on the bill predicted it would cost the plan between $235 million and $509 million over three years to hold off on Folwell's changes. Hospitals said the potentially lost revenue was needed to subsidize other services, like the emergency room care they must provide regardless of a person's ability to pay.

"Let the state treasurer do what he was elected to do," said Rep. Michael Speciale, R-Craven.

But Rep. Darren Jackson, D-Wake, said neither Folwell's proposal nor the bill would affect growing health care costs, and what North Carolina really needs is to expand Medicaid coverage to more low-income adults.

"We're just moving pieces on the board about who pays for uninsured care," Jackson said.

The bill creates a study committee due to report back to the legislature by December, and it locks in the current deal with Blue Cross as well as the current fee schedule through the end of 2020.

The vote Wednesday was 75-36, and the bill moves to the state Senate for more discussion.

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