State Health Plan Likely Target as Legislators Eye Budget Shortfall

Recent published reports indicate that significant changes are likely in the state employee health plan when the General Assembly convenes in January. Earlier this month, a legislative task force recommended that oversight of the plan should be shifted from the General Assembly to an executive branch agency to increase operational efficiency.  Currently, the plan comes under a legislative oversight committee, which has struggled to find ways to close the gap between premiums and the $2.5 billion spent yearly on health care expenses. The state health plan covers 665,000 state employees, retirees and their dependents, who saw their premiums increased after lawmakers approved a $675 million bailout last year.

The task force action follows an outside consultant’s report that the current plan’s operational structure lacks adequate oversight and monitoring. Legislative leaders say the shift would not stop increasing health care expenses for state employees and their dependents. The News & Observer reported earlier this month that legislative analysts say the plan would need an additional $572 million through mid-2013 to maintain current benefit levels and handle more patients. Republican leaders indicate they want to discuss ways to reduce the billions of dollars spent on medical expenses for state government retirees.


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