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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 [1]. 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 [2] 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 [3] 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 [4], 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.