State to save money on retiree health plan renegotiation

Posted July 26, 2017 12:24 p.m. EDT
Updated July 26, 2017 1:54 p.m. EDT

— Some 150,000 state government retirees with Medicare Advantage insurance through the State Health Plan will see their premiums and benefits held flat in the coming year after a renegotiation of the state's contract with insurance giant United Health Care.

The state itself will actually save money, as the premiums it pays go down 65 cents a month in 2018, to $120 per Medicare-eligible retiree.

The savings came through despite the potential imposition of an a federal tax on insurance plans that is part of the Affordable Care Act. This Health Insurance Providers Fee has been on hold, but it's slated to kick in for 2018. It's fate is unclear, since federal health care policy is up in the air while Congress debates repeal of the ACA, also known as "Obamacare."

State Treasurer Dale Folwell, whose office negotiated the new deal, held a press conference Wednesday to announce the savings and to call on North Carolina's congressional delegation to oppose the fee. If it goes away, the state would save about $45 million next year, Folwell said.

Both the State Employees Association of North Carolina and the North Carolina Retired Governmental Employees Association applauded the new contract.

"A tremendous accomplishment," SEANC Director of Operations Chuck Stone said.

Richard Rogers, executive director of the retired employees association said the plan would remain "strong and premium free." Retirees do not pay a premium for Medicare Advantage, which combines Medicare parts A and B into plan, administered by UHC.

It wasn't immediately clear how this deal compares to similar contracts in other states, but insurance premiums tend to trend up, and Folwell said there was "the potential for these premiums to go up at least 25 percent." Stone said North Carolina's new deal is "probably atypical."

"On a national level, it's very difficult," he said. "A lot of health providers are not willing to sit down and renegotiate existing contracts. I think great credit is owed to the treasurer."

Folwell said that, while most retirees on the Medicare Advantage plan will see no change to their co-pays or benefits, those who with dependent care options will see their costs decrease slightly.