More than 600 people were just kicked off the State Health Plan.
North Carolina officials said the recipients shouldn't have been getting the taxpayer-funded insurance benefits.
When Dale Folwell took over as state treasurer in 2017, one of the first things he did was begin an audit into the State Health Plan, which provides health care benefits for about 730,000 state employees, retirees and lawmakers, as well as many of their dependents.
After nearly a year, that audit is now complete.
"The first thing you do when you're trying to drive down the cost of health care is you make sure you're not spending money on people who shouldn't be on the plan," Folwell said in an interview Wednesday.
The findings resulted in 601 people losing their state-funded health coverage. They've all been notified and can appeal.
It's unclear how much public money has been spent on those people's health care, but Folwell said the state spends an average of $6,000 per person per year for the health plan. Using that figure, the state's savings could be roughly $3.6 million a year.
Keeping the State Health Plan solvent has been a big focus for Folwell, whose office has said the plan is $33 billion underfunded. He also oversees pension plans for state employees, which are more stable.
Folwell said Wednesday that removing ineligible people will help everyone else by driving down costs.
"We have state employees who can't afford a family premium," he said.
Depending on several factors, family coverage plans from the state can range from $218 to $720 a month. That's as much as $8,640 a year.
The State Employees Association of North Carolina, a lobbying group for state workers and retirees, praised Folwell's work.
“We’ve asked that the Treasurer guard the plan from fraud and abuse by providers, and it’s important to hold recipients to the same standard," Robert Broome, SEANC's executive director, said in a written statement.
"SEANC made a concerted effort to inform our members of how to comply with this audit when it was conducted. We are glad that so many families took the necessary steps to avoid a gap in coverage.”
Jonathan Owens, a spokesman for SEANC, said the group has heard only one complaint so far about the changes and is working with that person to resolve the issue.
Everyone who was removed, according to the treasurer's office, had been listed as a dependent of someone else enrolled in the plan. Some were removed because the person they enrolled through never submitted proof that they were a legitimate dependent. Others admitted they didn't qualify for the coverage they were getting.
"We had some people who wrote in and said, 'You got me. I'm no longer married to this person,'" Folwell said.
Other ways to save money
The audit isn't the only cost-saving measure aimed at the State Health Plan.
Folwell's office has also raised the rates for some levels of coverage. In one case, the state started charging $25 a month for a coverage plan that used to be free.
And the legislature recently passed a law that will take away post-retirement health care benefits for everyone who becomes a state employee after 2021. But those savings will take decades to show up. In the meantime, Folwell has repeatedly said that the country's rising life expectancy rates and prescription drug prices are not helping with the plan's finances.
The treasurer's office also recently changed the look of state employees' health insurance cards to emphasize that taxpayers help pay for their care.
Helping with all these changes is the fact that Folwell has more power to alter the State Health Plan than previous politicians in his office.
The State Health Plan has a board of directors, but in last year's budget, Republican legislators rewrote laws to take away power from the board and let the elected state treasurer make decisions without the board's input.
The changes allowed Folwell to fire people who worked on the State Health Plan without having to give them the same due process that most state employees get. He also was given direct control over who leads the plan, how much they're paid and other details.
Those changes happened shortly after Folwell, a Republican, took over the office from former Treasurer Janet Cowell, a Democrat.