The special interest health plan

The special interest health plan

- in Fitzsimon File

Not long before the end of the last summer's General Assembly session, legislative leaders learned that the State Health Plan was in serious trouble and might run out of money before the end of the state's fiscal year.

The House quickly approved spending $250 million of the state's savings account to make sure the plan could pay its bills, but Senate leaders shrugged off the proposal and the session adjourned with the status of the health plan up in the air.

The emergency didn't go away. The plan still needs $250 million to stay afloat in the current year and faces a $1.2 billion shortfall in the next biennium.

Addressing the problems with the plan has been one of the most contentious issues this session and provides a case study in the role of special interests in the legislative process and the way procedural rules are unevenly applied.

Senate leaders kicked things off with a proposal that would raise premiums for family coverage by 7.8 percent a year for two years, increase the out-of-pocket maximum for employees by $1,000, and double the annual deductible to $600.

The plan also included what was described as a wellness initiative, which amounted to charging people more who smoke or suffer from obesity. An official with the State Health Plan told lawmakers that random checks of employees with a smokerlyzer could ensure that workers were being truthful about their smoking status. 

The Senate proposal also reduced costs by $50 million through the use of mail-order pharmacies for prescription drugs. At least that was the proposal as it headed to the Senate floor. But then the lobbyists for the Association of Community Pharmacists flexed their political muscle and the mail order pharmacy provision was removed with an amendment during the Senate debate.

That would not only cost the taxpayers $50 million, it would raise the increase in the annual premium for state employees with family coverage to 8.6 percent a year.

The House Insurance Committee picked up things from there, bowing to the wishes of the lobbyists for chiropractors and physical therapists by reducing the co-pays for their patients to same level as primary care physicians. 

That would raise the premium for family coverage to 10.1 percent a year.

The House Appropriations Committee was next and Wednesday morning's meeting began with Chair Mickey Michaux announcing that any proposed amendments could not increase the cost of the plan, which is exactly what the Insurance Committee had done days before.

That didn't stop Rep. Martha Alexander from proposing that co-pays for mental health visits be reduced, which seems only fair since they are at least as important as seeing a chiropractor. Michaux promptly ruled that out of order because it would cost the state more. The rules that apply to chiropractors apparently do not apply to psychologists.

Rep. Verla Insko did convince the committee to approve a provision to direct the administrator of the health plan to come up with a middle ground for co-pays for mental health treatments, chiropractor visits and physical therapy sessions—one that is higher than the co-pay for primary care but lower than the co-pay for other specialists.

The committee eliminated the smokerlyzer provision at the request of Rep. Pricey Harrison, so at least the smoking police won't be showing up at anybody's door with a smokerlyzer any time soon.

Wellness strategies will now be considered by a blue ribbon commission that the bill sets up. The Appropriations Committee approved the amended bill by a 44-40 vote.

It now goes to the House floor, and you can bet the special interest lobbyists are working overtime to restore their exemptions and to create new ones.

The overhaul of the state health plan is complicated but a couple of things are clear. Almost every time the bill changes state employees pay more and the rules seem to be different depending on who wants to make adjustments.

Despite the good intentions of many of the bill's supporters, that makes it hard to have much confidence in the proposal or the process that created it. State employees and retirees deserve better.

About the author

Chris Fitzsimon, Founder and Executive Director of N.C. Policy Watch, writes the Fitzsimon File, delivers a radio commentary broadcast on WRAL-FM and hosts "News and Views," a weekly radio news magazine that airs on multiple stations across North Carolina.