Major Changes To State Health Plan Announced

North Carolina State Treasurer Dale R. Folwell recently announced significant changes to the State Health Plan, a division of the N.C. Department of the State Treasurer, which may affect individual healthcare options for many Plan members. The Plan will be changing its reimbursement strategy from commercial-based pricing to reference-based pricing, beginning January 1, 2020.

The State Health Plan provides health care coverage to “more than 727,000 teachers, current and former lawmakers, state university and community college personnel, retirees and their dependents,” according to the Plan’s website. For decades, State Health Plan members have been able to obtain medical services from Blue Cross and Blue Shield of North Carolina’s commercial network of providers. These providers consider the costs of services within the network to be confidential, meaning the fees charged for medical services are not actually provided to the Plan or its members. As a result, the State Health Plan has continued to reimburse these providers without knowing the specific costs of treatment, making it hard to predict how much it will pay out to providers each year.

In an effort to increase transparency and predictability, the State Health Plan will be changing from its current commercial-based payment model to a reference-based, government pricing model based on Medicare’s published fee schedule. The new model will use Medicare rates as a reference point and pay providers a percentage above that rate. If providers do not accept the new reimbursement method, they will have to submit a form indicating that they do not agree, and will be considered out of network.

Regarding the new reimbursement plan, the State Treasurer’s Department stated, “The Plan’s overall goal is to offer quality health care to its members and to generate savings of $300 million, making it possible for the Plan to reduce premiums and make the Plan more affordable for state employees and their dependents.”

While changes to the Plan may result in long-term member savings, they also may affect member healthcare. Glenda Jones, Assistant Superintendent of HR/Communications for Cabarrus County Schools (a member of the Advisory Board for the State Health Plan) and NCASA President-Elect, expressed concern over these changes in a recent note to Personnel Administrators of North Carolina, which is one of NCASA’s affiliates. She said the changes are something personnel administrators need to be aware of and communicate to school employees because they have “potential to limit the availability of in-network doctors” in both rural and urban communities across the state.

The State Health Plan has already sent letters to providers announcing their new reimbursement rates, and will be collecting data from providers regarding their interest in participating in the new rate strategy.

NCASA members who have questions about the changes or who want to share concerns should review this link,, and contact the State Health Plan’s Board of Trustees. Elizabeth Yelverton, 919-703-2487.

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