Rx for insurance

From the Charlotte Observer



It covers 590,000 people. It has cost taxpayers $750 million more in the past four years. And it still doesn't provide affordable family medical care for North Carolina's workers. The state health insurance plan is broken, and citizens should demand that lawmakers follow through and fix it.



North Carolina may be first in flight, but it's in the rear when it comes to health insurance for state employees and their families. What's wrong? The plan's expensive, it's out of date and it puts the state at a competitive disadvantage when luring top workers. Those things should change -- without delay.



Here's the problem. Even though managed care dominates in the private sector, North Carolina has the only state employee health insurance in the country that offers no choice beyond the traditional fee-for-service indemnity plan.



The practical effects are costly.



? Though the state pays premiums for workers and retirees, prices are higher than the market rate for spouses and families -- $480.14 a month.



? Insurance cost increases have outpaced employee raises in recent years. This year state employees got raises of 2 percent maximum. But monthly premiums for family coverage rose 12.3 percent.



? The number of enrolled retirees who incur high health care expenses is outpacing the number of young, relatively healthy workers entering the plan. That has forced the legislature to kick in money to keep the plan financially sound. Taxpayers have contributed $750 million since 2001.



Those trends can't continue. State workers deserve affordable family coverage. The state needs to be able to draw the best workers by offering top benefits. North Carolinians deserve more efficiency for their money.



The solution is not complicated. George Stokes, executive director of the state health insurance plan, has rolled out two managed-care programs based on a network of preferred provider organizations (PPOs). The details will change, but lawmakers will be asked to approve one of them in the 2006 General Assembly.



Estimates show considerable savings to both employees and taxpayers. The state's chief operating officer said North Carolina could save $460,000 for every 1 percent of the plan's members who switch to the PPO. The overall savings could be tens of millions of dollars annually.



Reform is not without obstacles. The state must find an administrator for any PPO plan. The state also plans to ask doctors and hospitals to agree to lower reimbursements for PPO patients than those now paid under the current plan. Doctors and hospitals are groups with powerful lobbies in the General Assembly. They could make any change politically difficult.



Yet there is no excuse for foot-dragging. It's past time North Carolina updated its state health insurance plan, making it flexible and affordable. That's an important piece of housekeeping on behalf of state employees -- and on behalf of all citizens, who foot the bills.