Uncategorized

State Health Plan is singing the Blues

 I haven't seen much media coverage of the latest news from the North Carolina State Health Plan, which insures more than 650,000 people across the state. The only documents I've seen are not encouraging.

In reports to the General Assembly and the SHP Board of Trustees , Executive Director Jack Walker projects that the plan will lose between $264 million and $280 million for fiscal year 2008/2009.

The original budget estimated that the SHP would have a $228 million cash balance by the end of July 2008, according to Walker. The actual cash balance at the end of July was $72 million. 

Why the shortfall?

Dr. Walker stated that both medical and pharmacy claims increased 7.2% during the past fiscal year as opposed to the projected increase of 1.9%.

 And what accounts for the original rosy projections? Higher than expected administrative payments to Blue Cross and Blue Shield of North Carolina. That's right, the same insurer that was overcharging the state's Health Choice program is also sinking the SHP.

The SHP Board went into closed session in August to discuss the "shared savings component of the BCBSNC contract." There's no word about what happened in that meeting.

So what does all of this mean?

Using a claims projection of 9 percent the SHP says that it needs $300 million from the state for 2009. The SHP says that it needs $100 million of that in January. Using a 10.5 percent trend model the SHP says it needs $325 million for 2009, $125 million of which it needs in January.

The state, in case you missed it, will not have a ton of cash sitting around in January.

And the North Carolina Medical Society is warning doctors that the SHP is likely to delay payments to providers if the state does not pony up the money.

State employees are worried that all of this will end up costing them more at the doctor in the form of higher copays and deductibles. It could also mean increasing the premiums for dependent coverage.

Two groups from the state auditors office are conducting performance and financial reviews of the SHP, which should shed some light on the situation. The auditor has not shown the same deference to BCBSNC that legislators exhibit, so hopefully the report helps explain the higher administrative charges. 

Word is that the auditor could release one or both of the audits in early November. We'll be watching. 

One Comment


  1. Marsha V. Hammond, PhD

    October 14, 2008 at 1:05 am

    Monday, October 13, 2008
    http://madamedefarge2scutinizingbcbsnc.blogspot.com/

    Will BCBSNC be accurately audited in terms of reasons for asking for hand-outs—-whileas NC State Legislature looks the other way?

    At least someone is watching the matter—-and it sure is not the NC STate Legislature which is supposed to be doing that as associated w/ its ‘standing’ (maybe they’re lying) committee:

    “…..The auditor has not shown the same deference to BCBSNC that legislators exhibit, so hopefully the report helps explain the higher administrative charges.

    Word is that the auditor could release one or both of the audits in early November. We’ll be watching…..”

Check Also

Context is key for understanding Insurance Commissioner’s Affordable Care Act comments

Many people were surprised to see a story ...

Top Stories from NCPW

  • News
  • Commentary

With just a few hours left until the crossover deadline, the state of North Carolina’s environment i [...]

On Monday morning, there was only one way left to save the Court of Appeals and a few hours with whi [...]

The political compromise that repealed HB2 was enough for the NCAA and ACC, both of which have retur [...]

Conference comes a day after new report lauds benefits of same-day registration The new line-up for [...]

How many times do we have to say it? Well, it’s worth repeating – especially in the aftermath of rec [...]

As the national pundits weigh in on President Trump’s first 100 days in office and the General Assem [...]

How the General Assembly is spending “crossover week” and what it ought to be doing The last week of [...]

To casual observers, the recent controversy surrounding public school class-size mandates in grades [...]

Featured | Special Projects

Trump + North Carolina
In dozens of vitally important areas, policy decisions of the Trump administration are dramatically affecting and altering the lives of North Carolinians. This growing collection of stories summarizes and critiques many of the most important decisions and their impacts.
Read more


HB2 - The continuing controversy
Policy Watch’s comprehensive coverage of North Carolina’s sweeping anti-LGBT law.
Read more