RALEIGH, N.C. — The board that oversees health insurance for North Carolina teachers, state workers and retirees takes up a proposal Tuesday to pull roughly $415 million from a retiree reserve fund, as the State Health Plan warns its cash on hand could run dry around the turn of the year.
The plan covers about 750,000 employees, retirees and dependents, which makes it the biggest purchaser of health care in the state. Its own report for the meeting projects the daily cash balance will slip under $100 million in January and fall below zero early in 2027 if current trends hold.
The slide has been steep. The plan held $298 million in cash on Sept. 30, compared with $504 million a year before and $849 million in 2023. For much of the past year daily balances ranged from $400 million to $800 million.
Plan officials point to more hospital admissions, especially for heart, nervous system and digestive conditions, a rise in individual claims above $100,000 tied to cancer, cardiac and neurological care, and higher costs for cancer drugs. Member health has also declined by 13% over five years as more people live with chronic conditions.
The fix up for a vote would raise what the Retiree Health Benefit Fund pays into the plan to $600 per retiree each month for July through December, double the current $300. The rate would drop to $378 in January. Members would not see a premium change from this step.
A bigger fight is also weighing on the plan. In mid-October a Superior Court judge refused to issue a temporary restraining order the plan had sought to halt an Atrium Health pricing program. Treasurer Brad Briner, who chairs the board, said afterward that the plan must consider every option to stay solvent, including raising premiums for all members by as much as $50 a month in 2028. For some members, that increase would be larger than their entire 2027 premium.
Atrium, the largest health system in North Carolina, is now treated as out of network by the plan, a change that would hit members in the Charlotte area and the Triad hardest. Plan leaders expect relief as more members use a new tiered pricing setup next year that steers care toward Novant Health, UNC Health and Iredell Health, which agreed to lower rates.
The General Assembly is ultimately on the hook to fund the plan, and board members hope the reserve transfer helps them avoid asking lawmakers for more money.
Filed under: Raleigh NC Health News
