Legislative Report #07-28

Report 07-28
August 1, 2007

SUPPLEMENTAL REPORT: APPROVED STATE HEALTH PLAN CHANGES

Our Legislative Report of July 27 summarized the highlights of the conference report on the state budget that was before the House and Senate for approval. We indicated that we would provide a supplemental report to cover details of the major changes to the State Health Plan during the 2007-09 biennium. Governor Easley signed the budget yesterday and the provisions affecting the State Health Plan are presented below.

CHANGES EFFECTIVE IN 2007-08

The General Assembly authorized the usual two-year increases in premiums, deductibles, and co-payments. Unless otherwise noted, these changes are effective on October 1, 2007.

Monthly Premiums

Indemnity Plan: 11.4% increase for Family Coverage
PPO Options: 11.2% increase for both Member/Spouse and Family Coverage

(Please note that specific figures on monthly premiums are not yet available.)

Annual Deductible

The annual deductible will increase from the current $350 to $450. This change applies to the indemnity plan only. The annual deductibles in the three PPO options were not changed.

Doctor Visit Co-Payments

The co-pay for office visits, in-home visits, and nursing facility visits will increase from $15 to $25 for members of the indemnity plan. There is no change in the co-pays for the PPO options.

Drug Co-Payments

The co-pay for preferred brand name drugs with no generic equivalent will increase from $25 to $30. The change applies to both the indemnity plan and the PPO options. This increase becomes effective on August 6, 2007.

PPO Benefit Improvements

The annual limits on physical, occupational, and speech therapy visits have been removed. Chemical dependency and mental health benefits have been added to the PPO options.

Information for Retirees and Employees

The budget includes a provision that requires the State Health Plan to conduct multiple meetings across the state to provide active and retired members with information on plan options and to solicit feedback. These meetings will be an important part of the process to replace the indemnity plan with a PPO or other health benefit option. (See below)

CHANGES EFFECTIVE IN 2008-09