The leaders of the State Health Plan met Tuesday to debate whether to raise costs on North Carolina state employees who use certain health care providers.<\/p>\n
No final decision is expected until this summer, but Tuesday\u2019s meeting laid the groundwork for how the new model will work. The idea, in general, is that it will soon become much more expensive for people on the State Health Plan to go to certain specialists or surgeons, while at the same time becoming much cheaper \u2014 possibly free \u2014 to go to others.<\/p>\n
\u201cWe\u2019re not saying you have to change providers,\u201d said Tom Friedman, the State Health Plan administrator. \u201cWe\u2019re saying, if you want to save significant money, you can.\u201d<\/p>\n
The State Health Plan provides health insurance for more than 750,000 state workers, retirees and their family members. It\u2019s facing a shortfall of hundreds of millions of dollars, however, driven by rising health care costs, limited financial support from the state legislature and years of frozen premiums for its members.<\/p>\n
State Treasurer Brad Briner and other leaders of the plan voted last year to raise premiums for the first time in nearly a decade<\/a>, instituting a new payment scheme based on people\u2019s salaries. While costs went up for nearly everyone on the plan, they went up only slightly for the most lowly paid state workers. Premium increases for more highly paid state employees were larger.<\/p>\n At the same time, however, the state instituted new benefits including\u00a0a new plan for certain types of surgeries<\/a>. Hundreds of doctors and other providers partnered with the state, promising to do surgeries for far less than they\u2019d normally charge, in exchange for having patients funneled into their practices by the State Health Plan.<\/p>\n State workers were then told they could have free surgeries<\/a> at those providers \u2014 not owing a copay or coinsurance. At the same time, prices went up to use other providers not on the preferred list.<\/p>\n Now the state wants to expand that same model to all types of health care, other than primary care doctors. If the idea is approved, all specialists would be subject to the same rules: For certain providers, state employees would have to pay extra to keep their doctors. But for others, state employees could go get care for free, or at least a very low copay.<\/p>\n \u201cWe fundamentally have two short-term options,\u201d Friedman said. \u201cWe can make everyone’s benefits worse and charge people a bunch more money for everything. Just uniformly flat. The other option there is to get physicians, doctors, hospitals to lower their prices.\u201d<\/p>\n The state has taken that second option, promising to funnel its hundreds of thousands of members to a smaller group of providers who agree to charge the state less in exchange for a guaranteed stream of patients.<\/p>\n The strategy has angered some hospitals and providers around the state who aren\u2019t among the state\u2019s list of preferred providers for surgeries. Expanding that same strategy to all types of medical specialists is likely to invite similar reactions. But state leaders say they\u2019re OK with taking the heat from health care executives, since in the end they believe this plan will lower costs for state workers and taxpayers alike.<\/p>\n \u201cThere are going to be losers in this transaction,\u201d Friedman said Tuesday. \u201cBut it\u2019s not going to be the members of the State Health Plan.\u201d<\/p>\n \t\t\t\t\t\t\tHow it works<\/p>\n The idea is that if, for example, the state would normally pay $30,000 for a procedure but can find someone willing to do it for $15,000, it can afford to erase the thousands of dollars in copays the member might otherwise have to pay \u2014 making the procedure free for patients \u2014 while still coming out ahead financially.<\/p>\n \u201cThe right thing to do is reward the member first, because it is the member who has to make the decision on where to get surgery,\u201d Friedman said. \u201cIt\u2019s really complicated and really hard to shop for surgeries when you’re in pain, when you need care. It is a scary, complicated thing. So we need to incentive, reward and support the member when they need health care.\u201d<\/p>\n Briner said that in addition to helping funnel patients through the doors in those doctors\u2019 offices, the state is also offering automatic preapproval in many circumstances to its preferred providers \u2014 an attempt to cut down the amount of time patients and doctors alike spend fighting with insurance to ensure a procedure or medication will be covered.<\/p>\n \u201cWe are allowing our providers to actually practice medicine, instead of practicing paperwork,\u201d Briner said. \u201cAnd in a lot of cases, that allows more access.\u201d<\/p>\n The State Employee Association of North Carolina, which lobbies for state workers, hasn\u2019t embraced the plans to raise costs on state workers but has also acknowledged the financial difficulties the health plan faces, and hasn’t opposed the new strategies being proposed to cut costs.<\/p>\n Suzanne Beasley, a lobbyist for the group, said at Tuesday\u2019s meeting that they\u2019ll keep pushing to see the contracts of providers who work with the health plan \u2014 believing that bringing public scrutiny on those costs would help drive down prices.<\/p>\n \u201cSEANC is still holding the position that provider contracts be made public information,\u201d Beasley said. Neither Briner nor any other board members responded.<\/p>\n \t\t\t\t\t\t\tMany new changes being made<\/p>\n Briner, a Republican who won election in 2024 and has been the state treasurer for slightly more than a year now, has taken drastic steps to reverse policies of former State Treasurer Dale Folwell, another Republican, who had been in office since 2017.<\/p>\n Among those choices was a decision, announced last week, to reopen bidding<\/a> for North Carolina\u2019s multibillion-dollar State Health Plan contract. Blue Cross NC had run the plan for decades but increasingly feuded with Folwell, who oversaw a switch to Aetna starting in 2025. Another switch could now potentially happen as early as 2028.<\/p>\n A spokesman for CVS, which owns Aetna, told WRAL last week that \u201cwe remain committed to improving the overall health and well-being of State Health Plan members.\u201d<\/p>\n