State Health Plan board approves three-tier provider network for 2027

The more than 770,000 participants in the State Health Plan will have a three-tier network structure to chose from when enrolling for 2027.

The SHP's board of directors approved Tuesday changes to 2027 benefits after receiving an update on the plan's financial outlook.

The final premium, co-pay, ambulatory, inpatient, outpatient and surgical deductible amounts associated with the tiers will be voted on at the June 5 board meeting.

The state Treasurer's Office has oversight of the SHP, which is North Carolina's largest purchaser of medical and pharmaceutical services. It covers teachers, state employees, legislators, retirees and their dependents.

Since state Treasurer Brad Briner took office in January 2025, he had focused primarily on reducing expenses as part of an effort to provide more financial stability to SHP.

Briner said the three-tier network structure is meant to encourage members to choose high-value providers with the SHP "banking on people thinking with their wallets."

The SHP presentation listed that there would be no change in the $10 co-pay for a preferred provider, and a $30 to $50 co-pay range for other providers.

"The Plan is working to make getting care easier no matter where members live in a fiscally sustainable manner," according to Tuesday's presentation.

"By reducing geographic and logistical barriers, the Plan will help members access primary care, specialists and mental health services in ways that are convenient, timely and close to home.

"We must strive to break down barriers and improve care options for rural and urban members. Access isn't limited to distance driven to care; it is also measured by affordability and times to appointments."

The three tiers

The Preferred Provider Program is asking participating providers to "trade increased volume and reduced cost-sharing for discounts and/or a share of savings."

The 2027 goal is to expand access to preferred providers beyond the Triad, Charlotte metro and Triangle to smaller metros centered around Asheville, Fayetteville, Greenville and Wilmington.

About 70% of care for SHP participants takes place at facilities in 10 counties with Forsyth and Guilford counties ranking fifth and seven, respectively. Catawba County was ranked ninth.

By emphasizing those four smaller metros, the SHP is hopeful of increasing essential access points to surrounding rural communities.

The second tier is branded as access providers, which will be focused on rural communities and more on primary care coverage than specialty providers and services.

"Median cost provider options is the target," according to the SHP.

The third tier is branded Non-Preferred Providers, which are considered by the SHP as "higher-cost providers who have not participated in the preferred provider program."

The SHP said preferred providers will generate more revenue from an increase in patients, while access providers are projected to have similar revenue to current totals and higher-cost providers would have lower revenue as patients move to the other tiers.

The SHP cautioned that members who don't shift to preferred providers from higher-cost providers will continue to pay higher co-pays, premium and deductible costs.

If enough SHP members don't switch, the plan warned that it could "disincentivizes future provider discounts."

When the SHP increased health insurance premiums for 2026, it was for the standard and plus PPO plans, with those with higher annual base salaries paying more.

For 2027, the SHP proposal would link premium increases to wage growth, such as a 1% raise would mean a $1 monthly insurance premium increase.