Health insurance premiums go up for state employees, teachers and some retirees next year, as the state ends its tradition of offering at least one insurance plan at no monthly charge.
The health insurance plan for employees and teachers that now carries no premium is going to cost $25 a month next year under a package of changes to the State Health Plan its board of trustees approved Wednesday. Retirees enrolled in this basic plan would continue to pay no monthly charge.
For employees and retirees who choose a different option known as the 80/20 plan, minimum monthly costs will go from $15.04 to $50.
The decision came despite objections from some groups representing teachers and retirees who said rising health-care costs are hurting their members, some of whom have not had raises or cost-of-living adjustments that have kept pace with expenses.
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Mark Jewell, president of the N.C. Association of Educators, said premium increases will make it harder to recruit and keep teachers.
“Out-of-pocket costs for health care have increased for our members, while they have seen little in the way of pay raises, especially our most experienced teachers,” he said.
State Treasurer Dale Folwell, head of the trustee board, said the goal is to allow the health plan to freeze out-of-pocket expenses – the co-pays and deductibles people pay when they see doctors – through 2021. After the latest increase, officials also want to freeze premiums for employee and family coverage through 2021. The premiums can help stabilize the health plan, which is spending at a rate that will deplete its reserve fund in about two years, Folwell said.
The new premiums spread “the impact for cost increases across the entire population,” Folwell said.
Eighty percent of the people using state health insurance enroll in the employee-only plan because the other options – enrolling with a spouse, children, or an entire family – are expensive. Only 5 percent of people enrolled have family coverage, which costs $600 a month or more, and Folwell wants to make that a more affordable option.
The Republican treasurer also wants to reduce costs to the health plan by using its purchasing power to negotiate more favorable contracts.
Chuck Stone, director of operations for the State Employees Association of North Carolina, said members want a premium-free coverage option. He called the increases “bitter medicine,” and said they should be offset by other savings.
The rate increases were approved as a lawsuit filed in 2012 by state retirees challenging the 80/20 plan premiums and other insurance changes imposed after 2011 is pending in court. A trial court judge has ruled in retirees’ favor, though a written order hasn’t been signed. The case covers about 177,000 retirees.
“We are perplexed that the state is considering these types of increases,” said Christopher Whelchel, a lawyer representing the retirees, said in an interview.
Richard Rogers, executive director of the N.C. Retired Governmental Employees Association, said retirees should not be changed a premium for the 80/20 plan, and that the higher cost could increase the health plan’s future liability.