On Wednesday the North Carolina State Treasurer announced the renegotiation of the contract between the State Health Plan (SHP) and UnitedHealthcare, resulting in the stabilization of the premium rate for the state’s Medicare Advantage plan in 2018.
Treasurer Dale Folwell said that the rate for the basic plan was decreased to $120 a month for 2018, down from $120.65 a month in 2017, avoiding a possible 25 percent cost increase.
The average national increase in premiums bought in an exchange or private market from 2017 to 2018 is 25 percent, Folwell said.
The renegotiated rate includes the assessment of the Health Insurance Providers Fee assessed as part of the Affordable Care Act, which was put on hold by Congress for 2017 last year.
The fee is charged to “each covered entity engaged in the business of providing health insurance” such as the state.
Folwell and representatives of State Employees Association of North Carolina and North Carolina Retired Governmental Employees Association have called on the North Carolina Congressional delegation to take the lead on extending the moratorium, or repealing the tax altogether, which would result in an additional savings for the state in 2018 of $45 million.
Nationwide the assessed costs for the fee are expected to top $14 billion.
Here in the state a continued moratorium or repeal of the fee could mean a further reduction of 30 percent for the state’s cost in 2018.
“Our loyalty is to the participants of these plans and taxpayers. That’s what our fiduciary responsibility is,” said Folwell. “When we think about negotiating contracts on behalf of our participants, we think about people like you,” Folwell said to a 50-year veteran employee of the Robeson County school system at the press conference who is Medicare-eligible and about to retire.
“We also think about our responsibility to provide these benefits in a financially sustainable manner,” he said. “This renegotiation achieves all our goals.”
Currently there are 150,000 Medicare-eligible state retirees using Medicare Advantage plans through the SHP, maintained by UnitedHealthcare.
The Medicare Advantage plans combine Medicare Part A and Part B into a single plan and come from a Medicare-approved private insurer, who contracts with the federal government.
Many of these plans offer extra benefits beyond Medicare, including prescription drug coverage, at no additional cost beyond the monthly plan premium, which also allows a Medicare participant to be able to utilize one simple card for their needs instead of juggling multiple plans working in concert.
While the renegotiation on its face saves the state money in 2018, those who pay premiums for dependents will also see cost savings in 2018.
The SHP currently provides health care coverage to more than 700,000 teachers, state employees, retirees, current and former lawmakers, state university and community college personnel, and their dependents.