State Health Plan approves provider tiers, premium changes
RALEIGH, N.C. (WTVD) -- The State Health Plan Board of Trustees has approved a series of changes that will affect health care costs and provider access for hundreds of thousands of state employees, retirees and dependents.
The newly adopted system introduces four provider tiers -- Preferred, Access, Non-Preferred and Out-of-Network -- with patient costs varying based on where they receive care. State officials say the changes are designed to reduce overall health care spending.
"We're creating incentives that benefit both our members and taxpayers and are great for the providers too. This is novel in health care, but it's actually normal in business. Competition drives value. It encourages innovation, and ultimately it delivers better results for our members," said State Treasurer Brad Briner
The board voted to designate UNC Health and Novant Health as the plan's Preferred providers. Members who use those systems beginning Jan. 1, 2027, will receive the lowest costs for care under the new structure.
"The word preferred means something. We prefer you go there. We are making it very, very affordable to go there," said Thomas Friedman, executive administrator of the State Health Plan.
The decision means some state employees may need to switch health care providers if they wish to take advantage of the lowest available rates.
Dr. Cristy Page, CEO of UNC Health, said the system is already preparing for the increased demand.
"We are actively working on those adding physicians, improving our access tools and expanding our virtual care, knowing that this is coming and that access is such an important aspect," Page said.
The Board also approved premium increases. Monthly premiums for individual coverage will rise from $1.76 to $8.05. For non-Medicare family coverage, monthly premiums will increase from $28.76 to $42.04.
Briner emphasized that officials are focused on reducing members' total health care costs rather than premium costs alone.
"I understand why people fixate on premiums," Briner said. "But if you look at the examples we provided, it is just the tip of the iceberg, total cost to care for people. We are really focused on lowering total cost of care."
According to examples presented during the meeting, members who use Preferred providers are expected to pay less overall for care than they do under the current system.
The board also selected Blue Cross NC to serve as the State Health Plan's Pharmacy Benefit Manager and to handle Third-Party Administrative Services beginning in 2028. The agreement will run for three years with options for two additional one-year extensions.
Briner said officials expect significant long-term savings from the combined provider and administrative changes.
"We estimate that over the term of their contract and through our own efforts with our new preferred provider strategy, we will be trending towards over $1 billion in savings," he said.
Currently, Aetna handles Third-Party Administrative Services, following a 2023 vote.
Discussions are continuing to determine whether WakeMed or Duke Health will serve as the Access provider in the Triangle region. Neither health system will be eligible for Preferred provider status under the new structure.
"Today's actions strengthen the state health plan through better partnerships, smarter purchasing, and a new approach that rewards high-quality, lower-cost care," Briner said.
To view the slides presented during Friday's meeting, click here.
ABC11's Sean Coffey contributed to this report.
