State Health Plan Boosts Premiums for 26,000 North Carolina Members

Thousands of North Carolina state employees and retirees may face higher health care premiums as the State Health Plan grapples with a significant funding gap.

In a recent development, the health plan’s trustees have made the decision to raise premiums for a significant number of individuals. Specifically, this increase will impact 4,200 retirees who were not fully vested in the health plan, as well as 22,000 dependents of employees for the upcoming 2025 benefit year. Starting Jan. 1, members enrolled in the Medicare Advantage Base Plan will experience a monthly premium increase of $33.

Approximately 150,000 retirees who are part of the state health plan, which boasts a total membership of 750,000, will not experience any increase whatsoever.

State Treasurer Dale Folwell, the chairman of the health plan’s board, warned that the health plan would be dealing with a significant $1.5 billion budget gap over the next three years if no action was taken. According to him, the state budget fell short by $240 million in funding the plan.

According to Folwell, the state’s Medicare Advantage plans will see a significant increase in cost over the next few years due to changes in federal laws and regulations. In recent news, it has been reported that the plan has incurred expenses of $528 million due to COVID-related issues. Surprisingly, almost 60% of these expenses have not been reimbursed by the General Assembly. Folwell, who is responsible for managing the plan, has reached out to state lawmakers for assistance in this matter.

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In a letter to state legislative leaders on Monday, Folwell acknowledged that despite their best efforts, significant challenges still lie ahead. The leaders are currently in negotiations regarding the allocation of a $1 billion budget surplus.

Requests for comment made on Friday were left unanswered by representatives for legislative leaders, state Sen. Phil Berger, R-Rockingham, and House Speaker Tim Moore, R-Cleveland.

According to the treasurer, the health plan requires an extra $89 million to meet reserve requirements by the end of 2025, in addition to the rising costs. In a recent development, the health plan’s board has made the decision to withdraw a significant amount of $155 million from the retiree trust fund.

In a recent development, Folwell has made a request to lawmakers, urging them to grant authorization for the reimbursement of federal pandemic-related funds that were distributed to the state. Lawmakers are being urged to address the recent withdrawal from the retirement fund.

The health plan has been making efforts to reduce expenses through contract negotiations. Folwell has been advocating for increased transparency from health care providers and drug makers as the state aims to reduce expenses.

In a recent development, the health plan has made the decision to discontinue coverage of medications like Wegovy and Saxenda for weight loss purposes, effective April 1. The reason behind this decision is the high cost associated with these medications. Folwell has stated that if the coverage were to continue, the plan would be required to increase its monthly premiums for many members.

“In a time of high state government and teacher vacancy rates, it is crucial to offer an affordable and valuable benefit that can effectively attract and retain talent,” stated Folwell in his letter to lawmakers. “Investing in the plan’s future is a matter of numbers, not politics.”


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