Members of the North Carolina House of Representatives filed a bill during the last week of February to stop the State Health Plan’s board from continuing with a new initiative. The plan that was barred would have allocated $300 million for the State Health Plan itself and another $66 million for teachers, highway patrol and others in public service positions at the state and local level.
The initiative is known as the Clear Pricing Project and was passed unanimously in October of 2018 by the State Health Plan’s Board of Trustees. If the Board is allowed to proceed, the plan will go into action on Jan. 1, 2020, and is intended to provide more transparency for patients and providers. It suggests a shift from a commercial-based pay model to a reference-based pay model that is tied to Medicare and government-regulated pricing for services and medications. The plan would support independent primary care doctors, behavioral specialists and specialized critical care hospitals by increasing their wages. Providers would be reimbursed based on Medicare rates, plus an additional amount to create a profit.
H.B. 184, the bill filed by the North Carolina House of Representatives at the end of February, would prevent the State Health Plan from using any “reference based model to reimburse providers” through 2021. It would instead maintain the current system of the State Health Plan purchasing health care plans and services for its members based on confidential pricing models, which often result in extremely high pricing with little explanation and a high out-of-pocket cost to members. The bill would also create a “joint study committee” of sixteen members, which would be appointed by the legislature and special interests groups, and would dictate that the State Treasurer is a non-voting member.
“This legislation locks in a failed and bankrupt system resulting in less transparency, higher costs, and more control for many who’ve been using the State Health Plan to increase their profits for decades,” said State Treasurer Dale Folwell. “It ignores the fact that the Plan is right behind Illinois in per capita debt, owing more than $30 billion. It forces entry level teachers, state troopers and other state employees to continue to have to work one week out of the month just to afford the family premium.”
Up until 2012, the North Carolina General Assembly dictated the State Health Plan without oversight, but it was quickly voted upon that additional oversight was helpful in creating an efficient system. H.B. 184 would revert back to the NC General Assembly being much more involved in the administration of the health plan, and would remove some of the oversight from the treasurer and Board of Trustees. North Carolina taxpayers currently pay around $3.4 billion to provide care to 727,000 members covered under the Plan. If H.B. 184 was implemented, taxpayers would need to spend an extra $1.3 billion in the next few years in order to prevent the program from going bankrupt.
The bill could easily block transparent and affordable care for the teachers, lawmakers, law enforcement, social workers, university employees and retirees covered on the plan.
“…We don’t have millions of dollars to spend on advertising and lobbying,” said Folwell. “What we offer is devotion to good government and a promise to the people that we will do everything…to attack the problem and make healthcare more affordable and transparent for public employees.”