Image: Adobe Stock, State Health Plan
North Carolina State Health Plan officials faced pushback from public sector workers during a meeting Friday, as they discussed potential increases to address a looming $500 million deficit.
The meeting, held by the State Health Plan Board of Trustees, explored various options to close the gap, including adjusting the plan’s benefit structure, revising its formulary (the list of covered medications), and introducing income based premium increases.
In his presentation, plan administrator Tom Friedman said a salary-based premium structure would tie individual premium increases to a member’s salary. He said this aims to protect the lowest-paid workers while requiring higher-earning participants to pay more.
While the likelihood of higher premiums is an unpopular option for teachers and state employees, the health plans trustees note that employee premiums and benefits have not been adjusted for seven years despite rising health care costs.
Tamika Walker Kelly, president of North Carolina Association of Educators, warned that such increases could send teachers looking for different employment. “We cannot afford the risk of pricing our educators out of the profession,” she said. “Our crisis was created by state lawmakers who have failed to provide salaries that meet the rising costs that we are all dealing with. And therefore, I say it is the state lawmakers who should pay to close the health care gap, not our school employees,” Walker said during a public comment period.
The proposals discussed Friday were put forth as examples, not recommendations, for closing the state’s budget gap.
Though it did not approve specific rates, Friday’s vote authorized the board to set premiums based on salary tiers. A vote on specific premium rates is expected sometime this summer.
The board agreed to bring back detailed premium increase scenarios for further discussion at the March meeting, including an option that would exempt those earning less than $65,000 per year.
The State Health Plan covers over 750,000 active and retired state employees, teachers, and their dependents.
The board also discussed several other options for closing the 2026 budget gap, including increasing copays/deductibles, and out-of-pocket maximums; changing prescription drug coverage; and adjusting Medicare primary plan options.
Clayton Henkel contributed to this report.