RALEIGH — During its Feb. 7 meeting, the North Carolina State Health Plan Board of Trustees discussed solutions to address significant projected State Health Plan deficits of $507 million in 2026 that could reach $800 million to $900 million in 2027.
In a press statement before the meeting, N.C. State Treasurer Brad Briner said the deficit could reach $1.4 billion by 2027.
The State Health Plan’s (SHP) financial challenges stem from unchanged employee premiums and benefits over seven years despite rising health care costs and state assembly contributions of 3.3%.
A key proposal discussed by the board would raise monthly premiums by an average of $30, utilizing a set of “salary band” adjustments ranging from $20 for lower-paid employees to $50 for those earning more than $100,000.
Salary band examples presented to the board included four tiers: under $40,000; $40,000-$65,000; $65,000-$100,000; and over $100,000.
Current premiums for the 70/30 plan, which is the most utilized, range from $25-$50. According to the presentation heard by the board, increases to 70/30 Plan deductibles would go from $1,500/$4,500 a year to a possible range of $5,000/$15,000. The out-of-pocket maximums under the proposal would go from $5,900/$16,300 to $9,000/$18,400.
During public comment, speakers including Tamika Walker Kelly, president of the North Carolina Association of Educators, strongly opposed the proposed premium increases, arguing they would worsen existing challenges for educators and suggesting state lawmakers should address the funding gap instead.
The Clear Pricing Project (CPP), instituted under former Treasurer Dale Folwell, was intended to improve pricing transparency but has resulted in higher-than-expected costs due to increased reimbursement rates and reduced copays. The increases occurred due to health providers previously in the program failing to sign up for the current year.
The SHP board approved a motion to advance salary-based premiums and signaled it will continue discussions on the topic, which is intended to be finalized at their August meeting.
Last month, the SHP transitioned from Blue Cross and Blue Shield of North Carolina to Aetna. Folwell’s office had estimated $140 million in administrative savings by moving to Aetna, whose third party administrator contract will run through the end of December 2027.
The SHP Board of Trustees meeting can be viewed at tinyurl.com/nsj-shp.
