House OKs State Health Plan changes

The state House gave final approval Thursday to an overhaul of the health plan that insures about 667,000 state employees, teachers and retirees.

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RALEIGH, N.C. — The state House gave final approval Thursday to an overhaul of the health plan that insures about 667,000 state employees, teachers and retirees.

The State Health Plan has run into increasing financial difficulties over the past few years. In 2008, lawmakers scrambled to cover a quarter-billion dollar shortfall. The estimated gap for the coming biennium is more than $500 million.

Senate Bill 265 would cut benefits, raise deductibles and co-pays by around 17 percent and charge workers a monthly insurance premium for individual coverage for the first time.

Employees and teachers could opt for less coverage at around $11 a month or better coverage for $22 a month. Retirees could choose the lower-level coverage for free, but they too would have to pay the $22 premium for the better plan.

State employees’ and teachers’ groups split over the proposal. The North Carolina Association of Educators opposed the premium as a “pay cut” for teachers who haven’t had a raise in years. But the State Employees Association praised provisions that would put the state treasurer in charge of the plan and open its contracts for public scrutiny.

The measure passed the Senate earlier this week. House leaders put it on the fast track and gave tentative OK Wednesday, saying the changes need to be approved by April 1 to give plan administrators time to implement them by the start of the new fiscal year July 1.

Rep. Nelson Dollar, R-Wake, said he doesn’t like the premiums, but he said it was a necessary part of reforming the troubled plan. “Maybe if it had been done a long time ago, we wouldn’t be dealing with the kid of financial situation we are today. But we are where we are,” he said.

House Democrats argued the premiums could be avoided. “We don’t have to put this on our employees. We don’t have to put this on our teachers,” said Rep. Mickey Michaux, D-Durham. “Why not raise the cigarette tax a little bit so it’ll help pay for this situation?”

Rep. Joe Hackney, D-Orange, argued that, between premiums, co-pays and deductibles, the changes in the bill could cost a state employee an additional $1,800 a year.

Republicans responded that things are no better in the private sector. “Folks out in the real world are seeing 30 and 40 percent increases in their insurance coverage,” said Rep. Jerry Dockham, R-Davidson. “Luckily, ours has not been that much.”

Democrats also protested the removal of wellness provisions they instituted in 2009, cutting benefits for workers who are obese or who smoke. But Dollar said the provisions weren’t effective.

“They’re all sticks and no carrots," Dollar said. "They don’t incentivize people to live healthier lives, which is what we need to do.”

Dollar said he’s hopeful that, under the treasurer and a new oversight board, the health plan can develop a better wellness program. He also touted the open records provision, which makes the plan’s contracts with Blue Cross Blue Shield of North Carolina and other providers available to the public.

“Taxpayers are finally going to get to see what they’re paying for. That’s critically important,” Dollar said.

If the bill passes the House, it will go back to the state Senate for one more vote there, and then on to the governor’s desk.


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