Premium increase in State Health Plan detrimental

The board of trustees for the State Health Plan has approved a 2018 benefit design change that imposes a $50 monthly premium for non-Medicare retirees enrolled in the 80/20 plan, a significant increase from the $15.04 per month they pay now.

That’s $600 in premiums over the course of one year—more than a 330 percent increase on current annual payments.

For government retirees, every dollar counts. This $50 premium will cause a 2 percent reduction in an average non-Medicare retiree’s pension, on top of an already staggering reduction of 12 percent since 2008 due to inflation.

The North Carolina Retired Government Employee Association supports many of the initiatives proposed by State Treasurer Folwell, including simplification of the enrollment process for the State Health Plan, and various tactics that can lead to a reduction in overall costs of the State Health Plan. Strategies include using the State Health Plan’s size to leverage better contracts with providers to offer opportunities to reduce healthcare costs, as well as eliminating fraud and abuse of the State Health Plan. Carrying out these tactics have the potential to save the state millions of dollars. We appreciate his plan to address the unfunded liability of the State Health Plan, as we understand and support the management need to avoid a potential negative impact on the state’s AAA bond rating.

NCRGEA cannot support the proposed $50 monthly premium increase on the 80/20 health plan. The rising costs of inflation, with no relief from a cost-of-living-adjustment, combined with increased healthcare costs is already hurting retirees. Moreover, this premium increase does not honor the obligation of the state to provide retirees a premium-free option for an 80/20 health plan. Plus, an added premium opens the door for future liabilities should the state be required to reimburse retirees for those premiums paid.

Government retirees dedicated their careers to serving our state. They worked under the assumption they would receive delayed benefits and should not have to choose between putting food on the table and filling an essential prescription.

Richard Rogers

Executive director

NC Retired Governmental Employees’ Association