The board that manages the state health plan has voted to allow the plan to charge state employees different premiums based on their salaries.
The state health plan is facing about a $500 million shortfall in 2026, with a higher $800 million shortfall projected the following year. That's driven largely by rising health care and prescription drug costs.
鈥淭he goal is to make sure we're sustainable. This isn't something we take lightly,鈥� said Tom Friedman, the new executive administrator of the state health plan.
The vote Friday will now allow for variable premiums based on salary tiers, but the board will set the actual monthly prices and salary bands this coming summer, to allow for more input from stakeholders and the public. The board viewed a presentation this week that gave an example of premium increases of $20 to $50 per month for different salary bands.
Concerns from educators and state employees聽
The state health plan covers about 750,000 members, and about one-third of those are insured through a K-12 public school employee.
President of the North Carolina Association of Educators Tamika Walker Kelly spoke during the board鈥檚 public comment period.
鈥淲e cannot afford the risk of pricing our educators out of the profession,鈥� Walker Kelly said. 鈥淚 know that if teachers and school employees are asked to pay more for health care, taking more out of their already meager compensation, then we will lose more teachers and more staff out of our classroom.鈥�
Walker Kelly said higher pay for educators would help, while the State Employees Association of North Carolina (SEANC) called for lowering payments to healthcare providers that charge the state health plan significantly more than Medicare rates.
鈥淵'all got to look at providers,鈥� said SEANC鈥檚 Executive Director Ardis Watkins. 鈥淵ou鈥檝e got to stop looking to these lowest paid working people to solve all the problems corporate entities have put on us. It's not right.鈥�
Watkins said, to the best of her knowledge from prior board meetings, some providers are charging the state health plan up to 800% of Medicare reimbursement rates for some procedures.
Comments from State Health Plan Board
鈥淚 don't think there's anyone on the board 鈥� that aren鈥檛 well aware of the burden we're putting on the employees,鈥� said board member Dr. Kerry Willis. 鈥淗ospital pricing in the state's ridiculous. I'm not going to sit here and defend it.鈥�
Forbes Advisor has and the for healthcare quality in the country.
But Willis went on to say that premium increases are one of the few immediate tools the board can use to balance its budget.
鈥淭here's not a rock that I'm not looking under for cost savings to avoid having to do premium increases. Unfortunately, the General Assembly funds the plan. I can't control what they give us,鈥� Willis said. 鈥淏ottom line, at the end of the day, we've got to balance this budget somewhere. We're not allowed to run a deficit.鈥�
The General Assembly increased the state-funded employer contribution in 2022 and 2023, and employee premiums had remained flat for years until a premium rise in 2024.
One board member asked whether the board could consider only raising premiums for state employees and educators with salaries below $65,000. About 53% of all policyholders fall below that income threshold.
贵谤颈别诲尘补苍鈥檚 to the board also outlined possible increases to co-pays, changes to the Clear Pricing Project, and changing the benefit structure for prescriptions among other possible solutions to the deficit.
