A major fix for the State Health Plan is ready for a Senate vote.
The Senate Appropriations Committee today approved legislation that would cost the general fund $250 million for the current fiscal year ending June 30, and another $609 million for the next two fiscal years, Dan Kane reports.
The legislation also reduces benefits to the roughly 667,000 state employees, teachers and retirees on the health plan by raising co-payments and deductibles.
The committee rejected an amendment offered by state Sen. Doug Berger, a Franklin County Democrat, that would open up plan contracts to the public. He offered the amendment on behalf of the State Employees Association of North Carolina, a group that has questioned the need to cut benefits for employees.
State law keeps nearly all the details of contracts the plan has with vendors secret. Berger said the secrecy prevents the public from having information to make informed decisions about the plan's operations.
"I think now more than ever there needs to be an opening of this process so there is more information," Berger said.
More after the jump.
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So far, the only details made public regarding the contracts are the total cost and the amount of claims handled in the 2007-2008 fiscal year. That information showed that Blue Cross and Blue Shield of North Carolina was paid $97.5 million to administer 9.4 million claims. That comes out to more than $10 per claim.
The state's contract with Electronic Data Systems to administer Medicaid claims comes out to 57 cents per claim.
The information also showed that the plan's financial consultant, Aon Consulting, had underestimated Blue Cross' cost to the plan to administer a Preferred Provider Organization by more than 40 percent, or $20 million annually.
State Sen. Ellie Kinnaird, a Chapel Hill Democrat, asked if plan officials had looked at whether the Blue Cross contract was too costly. Jack Walker, the plan's executive administrator, said it was not.
He cited information provided by Aon that compared the plan's cost per member with 11 other states, including four in the southeast. North Carolina's cost was equal to or less than most states, none of which were identified.
Walker also said that comparing the Blue Cross and EDS contracts was like comparing apples to oranges. Blue Cross provides other services that EDS does not.
Blue Cross officials have yet to provide a breakdown of its costs, leaving lawmakers to move the legislation without knowing the full picture.
Senate Majority Leader Tony Rand, a Fayetteville Democrat and sponsor of the legislation, told his colleagues the bill needs to clear the legislature by the end of this month so that plan changes can take effect by July 1. A failure to do so could reduce savings by 15 percent, he said.
He contended Berger's amendment would do more harm than good, because it would expose discounts that Blue Cross had negotiated with hospitals, doctors and other medical providers.
"This takes a private company, Blue Cross, and makes all their provider contract information public, but it doesn't for their competitors," Rand said.
Berger asked Walker if that information was private in other states. Walker said he didn't know.
If the bill clears the Senate, it will still need House approval.
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Re: Health Plan fix ready for Senate vote
It would be un-American to make the individual responsible for their own health. A person's heath should be the responsibility of the government. If we choose to smoke, drink or eat like a big, sweaty hog.....that's our right. Healthy people just don't know all the fun they are missing by not getting fat, smoking and waking up with a hangover.