State Health Plan NOT in Crisis

Once again today, Jack Walker, CEO of the NC State Health Plan, is down at the NC General Assembly announcing a “crisis” at the plan. This time it’s a need for a $400 to $500 million infusion in cash – but a year and a half or two years from now. Walker attributes this latest “crisis” to rising medical costs. Before we go overboard about this latest so-called crisis, it pays to take a step back and consider the following:

1. Adam Linker has written extensively about the historic “management 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 state workers and their families. The State Health Plan of course will need more funding over the next few years to cope with rising medical costs but this is something that should be well known and planned for far in advance.

2. If that isn’t enough consider Adam’s post from this year, pointing out that the latest independent audit of the SHP found that NC pays less (yes, less) to insure state health plan members than Georgia, Tennessee, and Virginia pay for each of their state employees in their state health plans. NC is getting a bargain on its plan.

3. Also consider that despite stunning revelations last year of the ridiculous contract with NC Blue Cross to manage the plan – this is the one where Blue Cross uses SHP revenue to pay for CEO travel, skyboxes at big-time sporting events, and the like – that Blue Cross continues to manage claims! Seems like if we want better projections on cost and ways to save money, bidding out this no-bid contract last year might have been the place to start.

4. Finally, the State Health Plan last year raised co-pays and co-insurance to levels which, if they aren’t already causing people to delay or not get care, they are pretty close. More increases are truly unsustainable. Usually these new calls of a “crisis” are attempts to lay the groundwork, yet again, to start charging premiums to individual state employees without asking for similar sacrifices from NC Blue Cross or other key stakeholders.

Rather than ring the tired “crisis” bell again, maybe it’s time to face up to the special interests and think about how to save money and adequately fund the state health plan.


  1. Adam Linker

    June 2, 2010 at 4:03 pm

    There is a management crisis.

  2. […] more: The Progressive Pulse – State Health Plan NOT in Crisis Share and […]

  3. kellam

    June 2, 2010 at 4:54 pm

    I am interested in are these states self insured? Tennessee, Georgia and Virginia or do they have normal insurance and not having to pay someone to administer their plans?

  4. HunterC

    June 2, 2010 at 10:58 pm

    Ben Niolet of The N&O and Cullen Browder of WRAL should be slapped with a wet noodle for running these flat out lies as news stories.

    No matter how many corrections and updates The N&O tries to post, they just can’t get the facts right.

    And WRAL’s Browder? Geez. Why doesn’t he just hand a mic to some foaming nut who can’t even define a fiscal year.

    They are embarrassments to journalism and should be shamed by their press corps colleagues for running these stories.

  5. NCDude

    June 3, 2010 at 7:50 am

    First of all, the SHP is in crisis, because until recently, anyone with 5 yrs of service received free health care at 65. Talk about government largess and a ticking time bomb!

    The solution is to raise premiums and raise deductibles on everyone, unless you would rather raise them based on length of service. You can’t have it both ways, there’s no free lunches.

  6. Adam Searing

    June 3, 2010 at 9:08 am

    The other states named all run their plans like we do (or any huge private employer does for that matter) – they are self-insured and each hire administrators to pay claims, project costs, develop provider networks, etc.

    Oh, and NCDude – you don’t have to believe me, just read the independent audits done for the SHP – the stubborn fact is that NC pays much less per person for its health plan than our surrounding states. So we are getting a bargain. But I agree, you can’t have a free lunch. You can’t overpay NC Blue Cross (another couple of independent audits – see above) and underfund the plan and expect everything to work great.

  7. Kay Hovious

    June 3, 2010 at 1:30 pm

    I say AMEN in response to Searing’s analysis. Out with BCBS … In with a plan managed by the NC Department of Insurance.

  8. Wendy Wenck

    June 3, 2010 at 4:53 pm

    @NCDUDE: I don’t believe your statement is true. A state employee must have a minimum of 20 years of service before being eligible to retire with health benefits from the state, that provides coverage until age 62, when one becomes eligible for coverage through Medicare.

  9. appendicitis symptoms

    June 17, 2010 at 1:48 am

    what is the difference between health insurance and a health plan?

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