State Health Plan provider network plan could lower NC costs for some members, raise them for others

RALEIGH, N.C. (WNCN) — The cost of healthcare for more than 750,000 North Carolina state employees, teachers and retirees could soon depend on which doctor or hospital they choose.

The State Health Plan Board of Trustees moved a step closer Friday to adopting a new three-tier provider system that would reward members who use certain healthcare providers with lower out-of-pocket costs.

State Treasurer Brad Briner says the changes to the State Health Plan could save about $54 million while also saving money for members as healthcare costs continue to rise.

"Every one of our active members on this plan should have the opportunity to save material amounts of money under this new strategy," he said.

At the heart of the proposed overhaul is a new three-tier provider network: preferred, access, and non-preferred. Members would pay different amounts depending on which doctors and hospitals they use.

"Every major provider in this state was invited to participate in this competition," Briner said.

Providers can earn preferred status by agreeing to lower prices, giving members an incentive to use those doctors and hospitals through lower out-of-pocket costs.

"By choosing preferred providers, you will be able to cut your out-of-pocket costs by a third or more," Briner said.

Members who use access-tier providers would see costs similar to what they pay today. However, members who choose non-preferred providers would face higher costs.

"If your current provider is ultimately not in the preferred tier, it will be because your provider does not sufficiently value your business," Briner said. "They chose not to compete for it."

Briner said the plan would include transition-of-care protections for members undergoing cancer treatment, transplant care, or pregnancy-related care.

"We want to be very, very careful about changing benefits on folks that are undergoing active cancer treatment, transplant treatment or pregnant. Even if your providers are in the non-preferred tier, we are going to have a robust transition of care plan so you can keep your benefit at the benefit that you have to date," he said.

Under the proposal, premium increases for active employees would be tied to pay raises.

"If you're paying $50 a month now and your wages go up 5%, the premium next year should be $52.50," Briner explained. "In a state where commercial premiums are well over triple that and growing even faster than wages, that is a fantastic bargain for our state employees."

On Friday, the Board of Trustees also approved their strategic plan and Medicare Advantage benefits for 2027. Those changes include higher premiums and increased out-of-pocket costs for some retirees as the plan works to close a funding gap and improve financial sustainability.

The Medicare Advantage changes drew criticism from retiree advocates during public comment.

Jackson Cozad, director of government relations for the Retired Government Employees Association, warned the proposed increases could hurt retired seniors living on fixed incomes.

"We are deeply concerned that substantial cost increases for Medicare Advantage participants would place a disproportionate burden on a population that has very limited ability to absorb all these additional costs," he said.

Trustees will take a final vote on the three-tier provider network and other 2027 benefit changes during their July 10 meeting.

"The July meeting is perhaps the most consequential meeting this board has ever had," Briner said.