{"id":689882,"date":"2026-06-07T14:05:18","date_gmt":"2026-06-07T14:05:18","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/689882\/"},"modified":"2026-06-07T14:05:18","modified_gmt":"2026-06-07T14:05:18","slug":"state-health-plan-raises-medicare-rates-shifts-provider-tiers-to-cut-costs","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/689882\/","title":{"rendered":"State Health Plan raises Medicare rates, shifts provider tiers to cut costs"},"content":{"rendered":"

At their board meeting<\/a> on Friday, the North Carolina State Health Plan Board of Trustees voted unanimously to raise rates on its Medicare Advantage plans for older workers and retirees and discussed a new tier system for providers in the state.<\/p>\n

The Humana Medicare Advantage Plans have nearly 177,000 enrolled members.<\/p>\n

Changes in the Medicare Advantage Plan will save the Plan $54 million, close to closing the projected $58 million gap for 2027.<\/p>\n

\u201cI appreciate that this is not going to be wildly popular, but as we work to close that gap, this is something we need to do to make sure that we are financially sustainable,\u201d said Tom Friedman, executive administrator of the State Health Plan (SHP).<\/p>\n

It was noted that there haven\u2019t been significant changes in the plan for at least five years or longer, and although they have heard and respect the feedback from members about affordability across many areas, state Treasurer Brad Briner, who oversees the SHP, said the biggest challenge for the plan and everyone is that medical expenses continue to rise.<\/p>\n

\u201cSo, in the spirit of we\u2019re all in this together, which I think we sincerely have to be, we think this proposal is prudent from that perspective,\u201d Briner said. \u201cBut I understand that it\u2019s not pleasant.\u201d<\/p>\n

\"\"Source: NC State Health Plan<\/p>\n

Out of pocket maximums for the Base Plan will rise from $4,000 to $4,500 and from $3,300 to $3,700 on the Enhanced Plan. All other co-pays will rise as well, including Part B Drug Co-pay, which Friedman said is a \u201ctremendous cost driver of the program\u201d costing thousands of dollars. The co-pay will go from $0 to $50 on both plans.<\/p>\n

Jackson Cozort, director of government relations at the North Carolina Retired Governmental Employees Association, told Briner, Friedman, SHP staff, and board members that while he acknowledges that they inherited a \u201cvery large ship that had a very large hole,\u201d they have grave concerns regarding the substantial increase being proposed for retirees and other members.<\/p>\n

\u201cFor many retirees, health care costs are not simply another line item in their household budget,\u201d he said. \u201cThey\u2019re among the most significant expenses that they face\u2026 They live on fixed incomes..their pensions have remained fixed while cost continues to rise for notches health care but literally everything else.\u201d<\/p>\n

Suzanne Beasley, director of government relations for the State Employees Association of North Carolina, agreed with Cozort, adding that it has been a long time retirees have seen a cost-of-living adjustment, and that their buying power is down 30%.<\/p>\n

\u201cThis is going to be probably pretty unbearable,\u201d she said.<\/p>\n

Changes to Medicare Advantage Plans will become effective on Jan. 1, 2027.<\/p>\n

Proposed 2027 benefit changes for non-medicare members<\/p>\n

Proposed 2027 benefit changes for active\/non-Medicare members were discussed, including the implementation of a new provider tier system that is broken down into Preferred, Access, Non-Preferred, and Out of Network providers.<\/p>\n

\"\"Source: NC State Health Plan<\/p>\n

\u201cWe are asking our members to become shoppers in health care, and we\u2019ve never asked them to do that really before,\u201d Briner said. \u201cWe\u2019ve all just kind of taken what we\u2019ve been given and assumed that that was the best for us. And we can\u2019t assume that anymore. We have to look around for a better price, we have to respond when providers give us a better deal, and we need to educate all of our members as much as we humanly can to all those choices.\u201d<\/p>\n

Friedman said out of pocket costs for members have risen up to $400 since 2022, with almost 140,000 members spent $2,000 or more out of pocket, which he said is not sustainable.<\/p>\n

If these difficult choices aren\u2019t made now, he said things will become more expensive.<\/p>\n

A $1.3 billion deficit was projected in 2027, but changes implemented by the SHP board and the General Assembly were able to reverse this trend and bring the plan about $30 million above its reserve rate, according to Friedman earlier this year.<\/p>\n

The plan\u2019s original projected deficit was $507 million in 2026 and between $800 million and $900 million in 2027.<\/p>\n

The goal of the tier structure is have as many members as possible to use preferred providers, which will save the SHP and the member the most money, with an estimated savings of one-third of out-of-pocket costs. Members who use access providers, which are mainly in rural areas, will basically have the same co-pays and deductible as they do now.<\/p>\n

Friedman stressed that the preferred provider grouping is not an attempt to reduce rural providers and that the program itself is evolving and using Lantern, which has 194 providers.<\/p>\n

He added that they met with every major health system provider in December and repeatedly stressed that there will be \u201cwinners and losers\u201d as far as providers are concerned. Those who become a preferred provider will see the most members and those who are not will see less.<\/p>\n

Briner said they are ready to hear comments from providers about how the system isn\u2019t fair but asked members to ask their provider one question if they are in a non-preferred or out-of-network category.<\/p>\n

\u201cIf your provider tells you that they\u2019re not in the non-preferred tier and they are not happy about it, ask them one question: why didn\u2019t you value my business?\u201d he said.<\/p>\n<\/p>\n

Friedman noted that ER coverage will be the same cost across all tiers and there will be a very robust transition-of-care plan in place for those using maternity\/NICU services, cancer, and transplant treatments.<\/p>\n

Contract negotiations are still ongoing and will be voted on at the board\u2019s July 10 meeting, so Briner said it isn\u2019t too late for a provider to be added to the preferred tier. In addition, 2027 premium rates, a third-party administrator and pharmacy benefit manager will be voted on as well.<\/p>\n

Also at Friday\u2019s meeting, the board also approved its 2026-2032 Strategic Plan focusing on three priorities: protecting affordable premiums and stable benefits, helping members achieve better health, and ensuring members have access to care.\u00a0The initiatives are designed to improve member health outcomes while strengthening the plan\u2019s long-term financial sustainability.\u00a0\u00a0\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"At their board meeting on Friday, the North Carolina State Health Plan Board of Trustees voted unanimously to…\n","protected":false},"author":2,"featured_media":689883,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[59],"tags":[97,252,253,9448,236083,299493,6589],"class_list":["post-689882","post","type-post","status-publish","format-standard","has-post-thumbnail","category-health-care","tag-health","tag-health-care","tag-healthcare","tag-medicare-advantage","tag-north-carolina-state-health-plan","tag-north-carolina-state-treasurer-brad-briner","tag-state-government"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/689882","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=689882"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/689882\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/689883"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=689882"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=689882"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=689882"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}