Legislative Report #07-12

Report 07-12
April 13, 2007

STATE HEALTH PLAN PUSHES PREMIUMS

On Thursday, April 12, the State Health Plan (SHP) distributed information to all members of the General Assembly promoting the SHP proposal to charge a monthly premium to all active and retired state employees and teachers who have decided to remain in the indemnity plan. The information that was distributed by the SHP staff indicates that benefits in the indemnity plan would be reduced if their proposal to impose premiums is not adopted by the General Assembly. According to the SHP information, the following benefit changes would be required if no premiums were allowed:

• Annual Deductible: increase from $350 to $500

• Office Visit Co-payment: increase from $15 to $25.

The information that was provided to legislators also promotes an alternative Indemnity Plan that the SHP staff believes would reduce costs and provide the same level of benefits as the old plan. Essentially, the proposed alternative would link the benefit structure of the existing indemnity plan with the medical provider network that is used by the State Health Plan PPOs.

Although many legislators already have said that they cannot support the proposal to charge premiums to retired and active employees, the SHP staff continues to promote this proposal as a means of encouraging current members of the old indemnity plan to move to the new alternative. Currently, a total of 257,000 people are enrolled in the existing indemnity plan. The number of retired state employees and teachers in this total is 121,000.

We see a great deal of merit in the proposed alternative indemnity plan. The alternative appears to offer comparable benefits to members and includes a few improvements, such as no deductibles or co-insurance for office visits to primary or specialty care physicians. Additional details need to be addressed, including the question of the availability of network providers in all areas of the state. We believe these issues can be resolved. Also, we believe that a majority of the members who currently are enrolled in the existing indemnity plan would voluntarily switch to the new alternative if enrollment were offered in September without the threat of premiums to force their decision.

However, we cannot support any effort to charge monthly premiums to retired state employees and teachers. State employees were promised free medical coverage during their active careers and in retirement. To impose premiums on individual members is a breach of this promise. We remain adamantly opposed to the proposal to charge premiums to active or retired employees. 

TAKE ACTION (AGAIN!)

Please contact your members of the Senate and the House even if you already have done so. Urge them to reject the proposal by the State Health Plan to impose premiums on retirees and employees who have decided to remain in the existing indemnity plan.

You can obtain legislators’ telephone numbers and addresses on the General Assembly web page (www.ncga.state.nc.us). Once you have access to the web page, you can find individual members by clicking on the Senate and House links. Thank you for your efforts.