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Missing the mark on what ails the State Health Plan

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.

4 Comments

  1. Leadership Conference

    May 29, 2009 at 6:50 pm

    A coalition of advocacy groups, meanwhile, is holding a national day of action Saturday for the establishment of a single-payer healthcare system. Events in more than fifty cities are set to include town hall meetings, rallies, vigils and protests outside insurance companies that profit from the medical system. The day of action is being organized by the Leadership Conference for Guaranteed Health Care

  2. EBB

    June 3, 2009 at 7:33 pm

    Thanks for laying this out so clearly. You have probably already done so, but how about sending this to the N&O? We need to put this in the news big time – The deficiencies in the mental health system caused somewhat of a furor; perhaps with enough publicity this too can create some commotion. The question then is: would it bring about real change?

  3. […] by claiming a crisis every couple of years” style at the State Health Plan – and why this is not only misleading, but a terrible way to run the most important benefit for our teachers, highway patrol members, and over 600,000 other […]

  4. Alex

    June 2, 2010 at 5:23 pm

    I just hope whoever the Legislature picks to take Mr. Walker’s place cares more about the State workers and less for BCBSNC. I have a hard time thinking he is on our side.