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State workers could pay more for health coverage

Posted February 24, 2011 7:36 p.m. EST
Updated February 25, 2011 11:38 a.m. EST

— State employees and retirees could soon have to pay for their own health coverage under a plan proposed by Gov. Beverly Perdue and being considered by Republican legislative leaders.

The State Health Plan, which provides coverage for 667,000 state employees, retirees, teachers and their dependents, is underfunded by almost $33 billion, according to an actuarial analysis. To get back on solid financial footing, the state budget and state workers would need to pump at least $3 billion a year into the plan for the next 19 years.

"It's a train wreck that continues to wreck at every crossing," Rep. Dale Folwell, R-Forsyth, said Thursday. "That's going to be sucking all of the money out of the state budget."

If the situation isn't addressed, the foundering health plan could cripple state finances within three years, lawmakers said.

"For about every dollar we take in in premiums, we're paying out $1.20 (to) $1.27," House Speaker Thom Tillis said. "That's an unsustainable model. That's a recipe for disaster."

In the budget she proposed last week, Perdue suggested that state employees and retirees in the most popular plan pay $16 to $21.50 a month for individual coverage. Traditionally, individual coverage has been provided free, and workers paid to cover spouses and dependents.

Lawmakers said they might ask employees to pay even more.

"I think the governor has stepped up and is willing to work with us to solve the problem," Tillis said. "(Paying for individual coverage) has to be one of the options we look at."

State workers aren't thrilled with the idea.

"I don't mind paying for health insurance if they want to pay me what the private sector was paying me," state employee Jenny Critcher said.

"That's going to hit the pocketbook quite a bit," state employee Cathy McCormick said.

Republican legislative leaders said they're also developing other reforms and new plans.

"How can the largest purchaser of something not do it better and cheaper than anybody else can?" Folwell asked.

"Unlike what past legislatures have done, which is kick the can down the road, we're going to solve the problem," Tillis said.

Lawmakers are also looking to address concerns and make changes to the state pension plan, such as having a minimum retirement age.