North Carolina State Health Plan benefits stay safe for now

North Carolina’s State Health Plan does not seem to be losing any of its benefits — for now.

The Board of Trustees for the N.C. State Health Plan, which works under the N.C. Department of State Treasurer, met on Feb. 5 to discuss changes for state employees’ health insurance through 2017.

In the days preceding the meeting, there was speculation that spousal coverage and the 80/20 Plan — one of three health care plans offered to state employees that only requires workers to cover 20 percent of their medical bills — could be eliminated.

But no action was taken on either plan during the meeting, and discussion of future changes was delayed until a later date, Brad Young, spokesperson for the Department of State Treasurer, said in an email.

In the 2015 budget, the N.C. General Assembly required the State Health Plan to spend less in fiscal years 2017-19 and maintain significant cash reserves, he said.

“With this legislative directive in mind, the State Health Plan must continue to work through various scenarios beyond 2017 to increase member engagement in order to reduce costs over time while providing meaningful benefits in accordance with the board’s strategic plan,” Young said.

David Rubin, a retired UNC professor, said the cost of health care goes up every year, and the state must either increase employees’ premiums or increase their deductibles.

“Going forward, it is inevitable that premiums will increase. It is the goal of the (State Health Plan) and Board of Trustees to minimize those increases,” he said. “In the past three or four years those increases have averaged about 3.5 percent, which is less than the general rate of inflation in health care.”

Rubin said the 2015 legislative pressure put on the board was brought up in the Feb. 5 meeting.

“The Plan staff and the Board of Trustees are guessing,” he said. “They are trying to figure out how much we need in savings and where to get those savings from.”

The legislature also told the treasurer and the board to take “sufficient measures” to reduce the projected increase in how much money the state contributes to employees’ health care by fiscal years 2017-19.

“We are hoping that the state will clarify this ambiguous piece and perhaps back down with requiring the increase in reserves,” Rubin said.

He said more people need to explore the Consumer-Directed Health Plan, a second health care plan available to state employees, which has high deductibles but additional cost-saving benefits.

“People see ‘high deductible’ and panic,” he said in an email. “If that hasn’t stopped all consideration of the CDHP, then they get down into the weeds and get totally overwhelmed.”

Chuck Stone, director of operations for the State Employees Association of North Carolina, said he opposes changing current plans’ benefits and adding premiums to the 70/30 Plan — an alternative that requires state employees to cover 30 percent of their medical bills.

Instead of increasing out-of-pocket spending, he said he recommends the board look at the way the government spends money on hospitals and health care providers.

“We are paying 216 percent of Medicare rates for outpatient hospital care, and that is far above the national average, which is no higher than 115 percent,” he said. “For the State Health Plan, we should be doing better than the national average.”

Stone said current hospital profit margins are far too high and the SEANC recommends a margin of 20 to 25 percent.

“It makes no sense to be paying that high of a profit level,” he said. “We are way above any reasonable price level for outpatient care.”

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