RALEIGH (AP) — Some North Carolina state employees, teachers and retirees could see even higher premiums if they smoke or fail to make other health choices starting next year under a proposal approved Monday by State Health Plan board members.
The trustee board backed new premium rates that would go up on average by 4.7 percent annually in 2014 and 2015.
Enrollees in more generous plans would have to pay a $20-per-month surcharge for smoking and another $20 per month if they fail to choose a primary care doctor and take a health assessment. They could receive up to $50 per month in premium credits if a worker and his or her spouse don’t smoke and decide to choose a doctor and other wellness initiatives. The more generous plans also would provide free preventive services.
State workers would continue to keep zero premiums for a less generous insurance plan, but they are likely to be subject to similar surcharges in 2016, according to plan officials. Leaders at the health plan, which provides insurance for 668,000 employees, retirees and their dependents, hope the changes will encourage healthier lifestyles and contain increasing health care costs.
“It’s fairly well-documented that smokers cost (plans) more money,” said Mona Moon, the State Health Plan’s chief financial officer.
The changes also are designed in part to reduce projected double-digit premium increases in 2016 and 2017. Under the changes, the potential average annual increases would fall from 15 percent to just more than 10 percent.
Representatives of several worker or retiree organizations generally supported the proposal except for the State Employees Association of North Carolina, a union representing about 55,000 current and active workers.
Ardis Watkins, a lobbyist for SEANC, told the board her group likes wellness efforts but calls the extra monthly cost “a huge stick you’re trying to disguise as a carrot.” The plan should lobby legislative leaders to spend more on insuring members, not less.
“We’re already not doing right by our employees and this will be doing worst,” Watkins said. “You can call it a premium, you can call it a surcharge. It’s money out of folks’ pockets that they have to jump through hoops to get back. That’s flat out wrong.”
The board voted 7-1 in favor of the change. Board member Michele Shaw, a state employee, cast the only “no” vote, saying she wanted more time to discuss the proposal. But other board members said it was time to move ahead with a proposal which offers workers and retirees three different tiers of coverage.
“I do not feel like we are throwing premiums on the back of members,” said board member Bill Medlin. “We have choices.”
The smoking surcharge brings the question full circle in state government. While under Democratic control, the legislature approved changes to the State Health Plan that penalized smokers with less-generous coverage starting in July 2010 and would have applied to very obese people starting July 2011.
But the Republican-led General Assembly repealed those programs after state workers found the rules too intrusive.
The General Assembly shifted State Health Plan governance to State Treasurer Janet Cowell’s office in the 2011 legislation that also helped close an estimated $515 million shortfall for the plan through mid-2013. The plan had faced repeated shortfalls since the early 2000s that required higher premiums and narrowed benefits.
Lawmakers don’t make choices on insurance plans but will still have influence because the proposal requires lawmakers to provide extra cash to help cover claims. Monday’s plan would need $181 million from the state’s coffers over two years, including $45 million in the 2012-13 fiscal year.
The current State Health Plan coverage charges state employees no premium for a less generous plan and $22.76 per month for a more generous plan. The monthly premium for state workers and their families combined is $543.54 per month for the less generous plan and $666.18 per month for the more generous plan.