North Carolina’s State Health Plan Board has approved sweeping changes to employee health coverage in an effort to address a staggering $507 million deficit. The decision affects approximately 775,000 state employees and retirees who will see higher deductibles and copays starting next year.
Under the revised “Standard” plan, previously known as the 70-30 plan, annual deductibles will double from $1,500 to $3,000. Prescription drug copays will also rise across the board. Board members said the changes are necessary to avoid even steeper premium increases.
Tom Friedman, executive administrator of the State Health Plan, emphasized the urgency of the situation. He told board members that the state must either cut benefits or raise premiums substantially—and doing nothing is not an option.
State Treasurer Brad Briner, who chairs the board, acknowledged the hardship the changes may cause but expressed confidence in the new direction. He stated that the adjustments, along with expanded provider partnerships, are designed to make the plan more sustainable. Briner added that the goal is to focus on trusted providers, financial predictability, and better member health support.
The board also introduced a Preferred Provider Plan that will offer significantly lower costs for members who choose certain hospitals and outpatient surgery centers. The idea is to guide patients toward more cost-effective care options without reducing access.
Additionally, the new copay structure is intended to leverage pharmaceutical company assistance programs. By raising copays, the state can extract more value from manufacturer coupons and rebates, ultimately reducing overall plan costs.
The board is set to reconvene in August to evaluate premium adjustments. Officials expect that the current benefit changes will help minimize those increases.
