State News

Head of N.C. employee health plan fired

Posted July 2, 2008 2:24 p.m. EDT
Updated July 3, 2008 12:35 a.m. EDT

— The executive administrator of the state employee health insurance plan has been fired abruptly after a legislative leader said the plan failed to meet its fiscal goals.

George Stokes was fired after three years at the helm of the North Carolina State Health Plan. A spokeswoman for state Insurance Commissioner Jim Long said he fired Stokes after being told to do so by lawmakers who oversee the plan.

Former administrator Jack Walker would take over leadership of the plan.

House Majority Leader Hugh Holliman and Senate Majority Leader Tony Rand wrote to Long on Tuesday asking for Stokes' termination.

Holliman said Stokes was removed because the General Assembly expected to receive a $50 million surplus from the plan this year. Plan officials told him last week there would be a $65 million shortfall instead.

"We had some financial setbacks in the plan," Holliman said. "This was a surprise, and we just didn't feel like we were kept informed like the way we should and things weren't going in the right direction."

The State Health Plan provides medical insurance for almost 650,000 state workers, public school teachers and retirees. It also administers N.C. Health Choice, which provides coverage for 122,000 uninsured children statewide.

Plan employees were told of Stokes' firing Wednesday afternoon, said spokeswoman Linda McCrudden, who said she had no immediate further information.

Holliman said the fiscal turnaround for the plan won't affect this year's budget for the health plan, but it could affect the 2009-10 fiscal year, potentially in the form of higher premiums.

"We have been operating under projections which cannot be met. This has placed us in a very difficult position and one that needs immediate attention," Holliman and Rand wrote in their letter.

State law gives the committee's leaders the final say over hiring and firing, although Long carries out their wishes, Department of Insurance spokeswoman Chrissy Pearson said.

"The commissioner has no say at this point," she said.

Stokes didn't immediately return a phone call Wednesday. During his tenure, Stokes initiated new, less expensive managed-care insurance options starting in late 2006 that became quite popular with employees.

But the plan faces several long-term challenges, including the costs of covering future health care expenses for retired state employees, which has been estimated to exceed $20 billion.