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When it comes to changes in health insurance in October, two things appear
inescapable.
First, out-of-pockets costs are going to go up. Just how high remains to be
seen.
Second, the choice of plans will not only go down, but will be reduced to only
the State Health Plan. That much is already known. Laurie Charest, associate
vice chancellor for Human Resources, gave the latest update on the health
insurance situation at a May 2 Employee Forum meeting.
"Choice is no longer limited but non-existent, and costs are going to go up
dramatically," she said.
According to State Health Plan administrators, Charest said, likely changes in
the plan are:
* An increase in deductible from $250 to $400;
* An increase in maximum out-of-pocket costs from $1,000 to $1,500; and
* A 30 percent premium increase.
Charest also said there is the possibility of a separate $100 deductible for
prescription drug coverage. Final changes for the next insurance "plan year,"
which begins Oct. 1, must be approved by the N.C. General Assembly.
As of May 1, 9,635 employees were enrolled in some health insurance plan with
the University, with 8,242, -- 85.5 percent -- enrolled in the state's
traditional plan. Of remaining employees in a plan, 1,037 employees (10.8
percent) were enrolled with WellPath and 356 (3.7 percent) with PruCare.
Neither HMO made a proposal to be offered to state employees for the upcoming
plan year.
Both, like the handful of other HMOS that had previously been offered to state
employees, were unable to make a profit.
And this year, the State Health Plan has a fiscal crisis of its own.
Jack Walker, the plan's executive director, has said that the plan could have a
deficit of $780 million by 2003 if steps are not taken to stem the red ink.
The severity of the plan's operating deficit became known earlier in the
year.
In response, Human Resources, with the encouragement and support of the
Employee Forum and Faculty Council, conducted an informal survey of University
employees in early March to get their thoughts on what the state might do to
return the plan to fiscal solvency. Walker, the State Health Plan's top
administrator, had asked for such input.
"This is a way to ensure that our employees' voices are heard," Charest said.
The survey results will be made available to University advocates so that they
can share the information with State Health Plan administrators and legislators
during the budget process that is now under way.
The survey was developed based on questions posed by Human Resources staff
along with Faculty Chair Sue Estroff and Employee Forum Chair John Heuer. The
Office of Institutional Research critiqued the survey before it was sent out to
make sure questions were clear and would prompt people to respond.
About 9,600 permanent faculty and staff received the survey by e-mail, and the
survey form was also printed in the Gazette. By the March 16 deadline, a total
of 3,534 responses had been received for a response rate of 37 percent.
The first section of the survey sought employees' preferences on proposed
changes in the plan, including such things as higher premiums and deductibles
and reduced or restricted coverage.
The most unacceptable proposals were the proposal to increase co-insurance from
20 percent to 30 percent and the proposal to increase the deductible from $250
to $500. Nearly 80 percent of responses found both of these changes to be
unacceptable (see accompanying chart).
Additionally, 76 percent of employees found unacceptable the introduction of
out-of-pocket premiums for single health coverage, while 71 percent objected
both to raising the premium for family coverage or raising the out-of-pocket
maximum from $1,000 to $1,500.
The only proposed change that was acceptable to more than half of respondents
was the idea of adding a $100 outpatient surgery co-payment. Its approval
rating was a slim 51 percent.
Another key finding is the number of employees who depend on the State Health
Plan for their families.
In the survey, 1,627 employees (46 percent of respondents) said they had
children and 903 of them covered their children on their health insurance
through the University.
Human Resources extrapolated from the survey findings that there are probably
about 2,500 employees on the family plan for about 5,000 children. Human
Resources administrators fear that a hefty increase in premiums would put so
much weight on family budgets that more employees than are already doing it
would opt out of any health plan.
Out-of-pocket premium costs for family coverage now stand at $281.04. It's
$117.16 for employee/children. The state covers the entire premium cost for
employee-only coverage.
Employees have some options for coping with costs. Some already qualify for
Medicaid or N.C. Health Choice, a statewide program instituted with federal
money several years to offer health coverage to children of the working poor.
And all employees can use an NCFlex spending account to pay for uncovered
expenses on a pre-tax basis.
For more information about health insurance benefits, call the Benefits
Department at 2-3071. Employees should also look for information in future
issues of the Gazette, mailings from the State Health Plan and e-mail messages
from HR Facilitators.
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