Under the Dome

GOP and Perdue reach compromise on State Health Plan

Republican leaders at the state legislature say they have reached a compromise with Gov. Bev Perdue on sweeping changes to save the State Health Plan.

According to a media release from Senate President Pro Tempore Phil Berger, the agreement will give State Health Plan administrators the option to use available cash balance reserves in the upcoming fiscal year to offer a free coverage option to active state employees and teachers – at no additional cost to taxpayers.

The cash reserves are higher than previously expected based on recent forecasts, the release said.

“For years, the State Health Plan has been on the verge of financial collapse," Berger, a Republican from Eden, said, according to the release. "Today’s compromise will ensure its future stability and manage health care costs for our teachers and state employees without raising taxes."

The plan, run under a contract with Blue Cross/Blue Shield of North Carolina, covers 633,000 state employees, retirees and dependents. 

Budget projections predicted a funding shortfall for the health plan of about $515 million. The governor vetoed the original bill approved by the Republican Controlled legislature, which would have for the first time required state employees to pay a monthly premium for basic coverage.

The Senate Insurance Committee passed the compromise bill Wednesday morning. The full chamber is scheduled to vote on the bill at its 3 p.m. session today.

UPDATE: Perdue's spokeswoman, Chrissy Pearson, said Perdue wanted assurances that a no-premium option would be available because teachers and state employees have not received raises in years.

"Some of those people can't afford more," Pearson said.

Pearson said Perdue met with Berger and House Speaker Thom Tillis last last week to come up with a compromise.

She asked for a letter from health plan administrator Jack Walker assuring that there would be enough in the plan's cash reserves to provide an employees-only, no-premium plan next year. 

Walker's letter to Perdue, Tillis, and Berger is dated today.

Pearson said Perdue is prepared to sign both the supplemental bill the Senate is set to vote on today, and the last health plan bill they passed.


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Another notch in Perdue's belt

The GOP caved in again. State employees still will have no skin in the game by not having to pay a small portion of their insurance. The health plan dollar shortfall has been temporarily kicked down the road by a stopgap measure.

The great majority of private sector employees pay a portion of their insurance costs, and many of them have not had raises during the recession.

It is time for Phil Berger to man up.


atleast you know your fate the 37,000 dont have clue and that is just sad

you pay for it through lower

you pay for it through lower salary, or you get higer salary and pay out of pocket.  You can't have both low salaries and high insurance costs.

State Benefits

I wouldn't have minded if they told me this 20 years ago. I would have gladly gone to work in the private sector so I could afford to pay what others pay for insurance. Instead I have been working for peanuts anticipating I would have a decent retirement with the state.

I'm well aware that many private sector employees' have had their retirement rug pulled out from them too but most of you have earned salaries, for many years, much higher than most state employees.

Is there wasteful spending in the state...Yes.
Are there some state employees making more than they deserve...Yes
Have most state employees been paid well and given great benefits through the years...NO 

Privileged, right. No pay

Privileged, right.

No pay raise in over 3 years

Constantly increasing medical costs

Hiring freezes despite increases in work volumes

Required to pay back some of our earned salary

Possible layoffs coming soon

Considered to be leeches on society by the people we serve

Low morale

Sounds to me like you've got sour grapes, and just want everyone else to be as bad off as you are.

why shouldn't state employees have to pay for health insurance..

... like eveybody else? It's just another case of the privileged class (politicians and public employees) living better than the people who they are supposed to be working for (taxpayers).

$515 MILLION Shortfall

First of all, the actual size of the shortfall is $515,000,000 instead of the $515,000 indicated in the post.  I am glad to see Governor Perdue working with the General Assembly instead of her "obstructionist" tendencies.  

Back in 2008, the Democrat-controlled General Assembly inked an lucretive agreement (filled campaign coffers of Basnight, Rand, Easley and Perdue) with Blue Cross & Blue Shield of North Carolina.  A N&O report found that the Democrats really screwed the state employees, teachers, state retirees with the deal.


The plan also underestimated administrative expenses by $36.3 million due to the fact that the consultant hired to forecast expenses did not have access to Blue Cross and Blue Shield of North Carolina’s costs to accurately predict expenses…  The auditor’s report places much of the blame for the administrative expense overruns on the failure of State Health Plan officials to draft a reasonable contract with BCBSNC.  The current contract does not specify what costs BCBSNC is able to charge to the plan and provides no incentives for BCBSNC to keep its costs down.  In fact, according to the audit, it does the exact opposite.  The plan agrees to pay BCBSNC its costs – plus a percentage of the insurer’s costs to provide a profit margin.  Such a setup, however, means that BCBSNC makes more as the state’s costs rise.  The audit report notes that the federal government stopped using such contracts in 1941.”

So the Republicans are actually cleaning up the mess created by Governor Perdue and the Democrats (she was Lt. Governor and cast a vote in the Senate - i.e. lottery at the time).

If the state health plan

If the state health plan paid BCBS the ~$1.80 a claim that medicare/medicade pays instead of the $8+ per claim, there would be a surplug of $.


Another sign of the legislature protecting the insurance industries profit margin.


$515,000 shortfall divided by 633,000 state employees = $0.81 per covered employee per year to cover the shortage. WHAT IS THE PROBLEM!!!!

Retirees and cash balance

What about retirees? and what was the purpose of this cash balance?

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