The state Senate passed a major fix for the State Health Plan today that eliminates a competitive threat to independent pharmacists but increases the cost to taxpayers by another $53 million and raises health insurance costs for the dependents of state workers, teachers and retirees.
Pharmacists and their lobbyists had stalled passage of the bill over concerns that deep discounts they would have been required to provide to belong to a new pharmacy network component would drive them out of business, Dan Kane reports.
They reached agreement with the bill's sponsor, Senate Majority Leader Tony Rand of Fayetteville, to drop the network, but it was contingent upon their helping the plan save $38 million in pharmacy costs over the next two years.
"We're not getting off by any means," said Andy Ellen, a lobbyist for the N.C. Retail Merchants Association. "We have a lot of skin in this."
The network would have saved taxpayers an estimated $91 million, so the compromise adds another $53 million to the plan's cost. The bill passed by a 28 to 18 vote.
More after the jump.
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Dependents also would have benefited from the network savings. Without it, their premiums will increase from 7.8 percent to 8.6 percent each year over the next two years.
The total cost to the state's general fund is more than $660 million. The legislation now goes to the House. Rand said the bill needs to pass by April 1 to give the plan enough time to enact benefit changes by July 1, the start of the fiscal year.
Those changes include increases in deductibles and co-payments for the roughly 667,000 members on the plan.
Representatives for the State Employees Association of North Carolina said the compromise bill is even worse than the original one, in that the premium increases take more out of the pockets of state employees through increases in dependent coverage costs.
Ardis Watkins, the association's lobbyist, said the changes will only exacerbate a trend in which the oldest and sickest stay on the plan, while those who are healthy seek cheaper options.
"It's just going to dig the plan a worse hole to get out of," she said.
Rising health care costs and inaccurate cost projections left the plan in need of a major bailout.
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Re: Senate passes Health Plan fix
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— RTB