- Related
- NCCapitol
- health care
- health care costs
- insurance
- state health plan
By Will Doran, WRAL state government reporter
Thousands of North Carolina state employees will pay more for insurance premiums, and many may need to start shopping around for health care in 2027 — including potentially leaving their longtime doctors — under new policies approved Friday by the State Health Plan board
The changeup in doctors will save the Health Plan potentially hundreds of millions of dollars if enough people take part. State officials will try to incentivize that by offering state workers discounts to go to certain doctors, as well as by charging them thousands of dollars more if they insist on using other providers
Some people could save thousands of dollars a year because of those discounts. Dr. Brian Miller, one of the board members, called it “an obscene amount” of savings in an industry like healthcare where costs almost always go up, not down
The board also voted to hike premiums on state employees by 5%, a move that could see people paying anywhere from $1.76 to $32.28 extra per month — depending on which plan they have, what their salary is and whether they also insure any family members through the state
Ardis Watkins, who leads the State Employees Association of North Carolina, told the board before the vote that state employees got no raises in the last fiscal year, when premiums also increased, and that many will be getting only a 3% raise for the fiscal year that began July 1
“A 3% raise for most employees is not going to cover inflation for this year alone, much less the increase y’all gave them last year,” Watkins told the State Health Plan board before the vote Friday. “And then what we assume will be an increase for them all this year. … We think that’s absolutely wrong-headed.”
Most individuals on the plan, who don’t insure family members, would see their premiums rise less than $5 a month. Family plans are more expensive
“That’s less than 1% of the raise that state employees will get, that’s going back to [premium increases]” board member Sam Watts said Friday, referencing the individual premiums. “Well less than 1%.”
The lowest premiums for individuals would rise to $36.76 per month, while the most expensive family plans would rise to $882.04 per month
Pressure to change doctors
But even with premiums going up in 2027, most if not all state workers should have the chance to cut their total healthcare spending — and in some cases ranging from $1,500 to $7,000 a year — even if they use the exact same level of care as this year, officials said
“You do have the opportunity to pay thousands of dollars less,” Tom Friedman, the health plan director, said in a briefing ahead of the votes. “We have never given members that opportunity, and very few health plans do give members that opportunity. So, the premiums are going to go up with inflation. But your total cost can go down.”
That’s because of the new system that encourages people to shop around for new doctors and specialists, which the board voted unanimously to approve Friday morning. Friedman said during Friday’s meeting that for the sickest members on the plan, the new system will give them the opportunity to save as much as $7,000 a year
The system that was approved Friday labels some healthcare providers as “Preferred.” Members of the health plan who go to those preferred providers will have lower deductibles and lower out-of-pocket maximum costs. The providers — UNC Health, Novant and Iredell Health Systems — are expecting to see an influx of new patients from the State Health Plan and have agreed to charge the state lower rates to have that “preferred” designation
State Treasurer Brad Briner, a Republican who oversees the health plan, said state workers can drop their spending down to as low as it was 15 years ago, even in spite of years of healthcare cost inflation, if they use only preferred providers for all their healthcare needs. He encouraged people to focus on that opportunity rather than the premium increases
“When our members choose those preferred providers, they will pay 2012 out-of-pocket prices for their healthcare,” Briner said. “This is [savings of] thousands of dollars to the average member of the State Health Plan. Members know that those thousands of dollars are much more important than the $2 to $4 [monthly] premium increase we’ll be talking about.”
But in order to change people’s habits and get them to go to those providers, there has to be an incentive. So beyond just providing discounts, the State Health Plan is also designating “non-preferred” providers. People who use those will pay substantially higher deductibles and out-of-pocket costs, starting in 2027
There’s also a third category of provider who won’t be affected in either direction. People won’t be charged more for going to them but won’t receive a discount, either
Currently, individuals on the standard plan have a $6,500 annual out-of-pocket maximum. Starting in 2027, if they use only preferred providers, their out-of-pocket maximum will drop to $4,000 annually. If they use the neutral providers, called the “access” tier, their maximum costs will remain stable at $6,500. But if they use “non-preferred” providers, their out-of-pocket maximum will nearly double, to $12,000 annually
What it means for Central NC
The non-preferred providers, so far, include Atrium, Granville Health, and some Duke LifePoint facilities. One decision the State Health Plan didn’t make Friday — and which could affect many in the Triangle and central North Carolina — is what to do with Duke Health and WakeMed
While UNC Health is the region’s preferred provider, the board didn’t immediately decide which of Duke or WakeMed should be non-preferred, and which should fill the neutral pricing spot
“We’ve got some negotiating taking place, to figure that out,” Friedman said Friday
The new tier system won’t apply to emergency room visits, Friedman added, since people shouldn’t be punished for having an emergency. And it also won’t immediately apply to pregnant women, new parents with children in the neonatal intensive care unit, cancer patients or transplant patients
None of them will be pressured to change providers for at least the first year of the program, he said, and perhaps longer. “We are going to be as flexible and as member-supportive as we possibly can” for people in those complex and often stressful situations, Friedman said in a briefing prior to the meeting
