Audit blames plan administrators

Administrators of the State Health Plan did not tell legislators for four months last year about multi-million dollar financial problems.

They underestimated both revenues and claim expenses for the plan, which insures 667,000 teachers, state workers and retirees, creating a nearly $80 million loss last year.

Auditors criticized the administrators, since replaced, for agreeing to a contract with Blue Cross Blue Shield of North Carolina that gave it no incentive to contain costs and was not reviewed by a contract lawyer.

The audit blames much of the problem on too much secrecy among health plan staff and Blue Cross. A company spokesman also faulted forecasting by the health plan's staff. (N&O)