If the two part series on the “State Health Plan In Crisis” on WUNC sounds familiar, it’s because we’ve been hearing that the State Health Plan is in a “death spiral” for nearly a decade. If you want a little deja vu this afternoon click the headline in the News & Observer from 2001 on the right.
It’s not accidental that legislators and State Health Plan officials would push the “death spiral” line to WUNC. If the problem with the State Health Plan is that employees are lazy, fat smokers then troubles with the plan have nothing to do with the plan’s administration.
The State Health Plan has a short-term and a long-term problem. Legislators and State Health Plan administrators want to conflate the two issues — the press and the public shouldn’t let them get away with this misrepresentation.
The short term crisis, the reason for the bailout, was mismanagement and nonexistent oversight. The State Health Plan needed a massive cash infusion because it missed its projections, and in budgeting, projections are everything. If you know that you have to buy a new car in two years, it might be a financial strain, but it’s not a crisis. If you unexpectedly have to buy a new car tomorrow, that’s a crisis.
The State Health Plan missed its projections because of the ridiculous contract it signed with Blue Cross and Blue Shield of North Carolina. Don’t take my word for it — read the audit. The short term crisis had nothing at all to do with the average age of state employees.
It’s true that the State Health Plan faces a long term challenge, and it’s the same challenge faced by every health plan that does not discriminate against women, or the middle aged, or the unhealthy, etc. Private insurers have sliced and diced their risk pools to the point that only young, healthy, white males can afford insurance. That leaves everyone who is not a young, healthy, white male scrambling for any coverage they can get. Many people end up in the State Health Plan as a last resort, because the State Health Plan does not yet engage in unethical discrimination when setting rates. Not yet.
As a quick scan of State Health Plan Board of Trustees materials would reveal to the curious reporter, the State Health Plan is currently considering following the discriminatory lead of private insurers. Administrators want to charge female spouses of state employees more than male spouses and older spouses more than younger spouses.
Chopping up risk and forcing older and sicker workers out of the State Health Plan is certainly one way to save money. Or we could prohibit private insurance companies from engaging in unethical behavior. Many of us bleeding hearts who tend to frown on discrimination favor the latter approach.
I don’t know if it’s a death spiral, but anyone following the State Health Plan will certainly feel like we’re driving in circles. Every several years a new audit reveals gross mismanagement at the State Health Plan. Every several years the plan needs a bailout that involves jacking up cost sharing and cutting benefits. And every several years politicians blame state employees for rising expenses.
The press should be questioning every claim made by legislators and State Health Plan officials. Otherwise, it will get taken for a ride.