RALEIGH — The General Assembly on Thursday wrapped up a final compromise on cost-cutting measures to the state employee and teacher health insurance plan that's expected to retain a premium-free option for current workers for their own coverage.
The House voted 90-24 on the final piece of legislation that, combined with another bill on Gov. Bev Perdue's desk, helps close an estimated $515 million shortfall for the plan through mid-2013. The Senate had agreed to the compromise Wednesday.
The political fight already had led to one Perdue veto, but the governor said Thursday that she'll sign both pieces of legislation to end the impasse. The legislation, combined with a letter from the State Health Plan executive administrator, ensures that the premium-free option will remain through at least June 2012 and likely another year, bill supporters said.
The pair of bills ends a monthlong stalemate over whether the state would require the 322,000 active workers to pay for the first time a monthly premium regardless of which of the two policies they choose.
"This is truly a happy day," said Rep. Jerry Dockham, R-Davidson, who had shepherded the State Health Plan bills through the House.
Perdue blocked the original bill because she said it would have resulted in a pay cut by requiring premiums of $8 to $22 per month. Under the agreement, only teachers, employees and retirees who want the more generous of the two policies would pay the premium of $10 or $21.63 starting in September.
"These folks are giving great services to the families and the children of this state," Perdue told reporters after an education event in Research Triangle Park. "I'm glad this is something that we finally resolved."
The agreement still will require starting Sept. 1 higher out-of-pocket co-payment and deductibles, as well as 5.3 percent annual premium increases for dependent coverage, raising premiums for family coverage for the more generous policy to more than $650 a month. It also does away with penalties for smoking and overweight workers and retirees, who were forced into the less generous plan.
State Health Plan Executive Administrator Jack Walker told Perdue, House Speaker Thom Tillis and Senate leader Phil Berger this week that the plan will have enough cash reserves to ensure a premium-free option for the less generous policy. The bill also directs health plan leaders to extend the free option though mid-2013 by other operational savings.
The measure also shifts oversight of the plan from the legislature to the State Treasurer's Office. The State Employees Association of North Carolina had sought this change for years. Association leaders said it will reduce political considerations from carrying out the plan and should result in large cost savings.