NC HEALTH REPORT: Not Good Business

May 6, 2009

Editors:  Adam Searing and Adam Linker
Check out all our videos on HAC's  YouTube channel.
VIDEO:  It came out a week or two after the legislature passed the bill "reforming" the state health plan, but State Auditor Beth Wood's report on the whole mess is still devastating.  She puts blame squarely not only on missed financial projections but also on NC's ridiculous contract with NC Blue Cross to administer the plan, calling it "not good business."  And why didn't legislators demand that nonprofit Blue Cross renegotiate its contract?
VIDEO:  Wilmington mom and health care advocate Kay Zwan lays out her reasons for getting involved in health reform - and what politicians need to do to solve the problems faced not only by her family but by millions of other families. 
NC Judge Bill Belk and his need for good health insurance.
NC Member of Congress Mike McIntyre is again one of very few Democrats in the country voting against the federal budget last week.  Health reform cannot happen without the money in this budget - so McIntyre wants to tell people he's for reform, but he doesn't want to pay for it.  Ridiculous.
It shouldn't be a surprise that state taxpayers got taken to the cleaners in the $100 million NC Blue Cross contract with the state health plan - not only did no state attorney even read the contract before it was signed, they didn't even know what they were paying for.  State Auditor Beth Wood's full report is devastating.
Pharmaceutical industry is in full offensive mode to target budget savings on drugs proposed by Governor Perdue and the NC Senate.
By Adam Linker
See the full article in today's Raleigh News and Observer
RALEIGH:  Smoking hurts North Carolinians by increasing disease, shortening life spans and raising health costs for smokers and nonsmokers alike. But North Carolina legislators are still reluctant to take definitive steps to curb smoking. Reluctant, that is, unless the target is state employees.
State Rep. Hugh Holliman's legislation to ban smoking in workplaces like bars and restaurants escaped the House but not before opponents slapped the bill with enough amendments to knock its teeth out. And the General Assembly has so far balked at Gov. Beverly Perdue's bold proposal to raise the cigarette tax by $1 per pack, a step that we know would drastically reduce teen smoking rates and save the state millions in health care expenses.  Even at the federal level, U.S. Sens. Kay Hagan and Richard Burr oppose allowing the Food and Drug Administration to regulate tobacco products.
Legislators did not hesitate to pass smoking and obesity provisions in the recently adopted State Health Plan bailout bill. These initiatives are designed to force obese and smoking state employees into more expensive insurance plans.
I should state our position up front: At the N.C. Justice Center's Health Access Coalition we are proponents of wellness programs. We support workplace restrictions on smoking, the $1 cigarette tax and federal regulation of tobacco.  But we are adamantly opposed to the specific wellness provisions in the State Health Plan bill. These measures are shockingly invasive, punitive and poorly designed. They will also hurt all state workers -- healthy and unhealthy alike.
The first step in the wellness program is to shift every State Health Plan enrollee into the most expensive insurance coverage option -- the so-called "basic plan." That bears repeating: Every current and former state employee, even if he or she has never touched a Marlboro or a MoonPie, will move to the basic plan.
The burden of proof is then on the employees to verify that they, and all of their family members, are properly proportioned nonsmokers. Verification in hand, employees then earn the right to move back to the less expensive insurance coverage option known as the "standard plan."
This is an administrative train wreck waiting to happen. The insurance enrollment process is confusing and chaotic enough without juggling families back and forth between health plans.  But let's suspend disbelief for a moment and assume that administration and enrollment go smoothly. Then what?
Starting in 2010, if any State Health Plan enrollee smokes, the entire family will get booted into the basic plan. And to ensure that none of those crafty state employees tries to sneak a cigarette, the State Health Plan will subject all enrollees to random blood and breathalyzer tests. Plan officials will conduct the random tests with a device called a "Smokerlyzer," which sounds like something lifted from Saturday Night Live.
The bill also authorizes plan officials to dream up additional punishments for employees caught lying about their smoking status.  In 2011 the State Health Plan will institute a similar program to punish those with body mass indexes, in the words of the bill, "within a range determined by the Plan" based on undefined "clinical guidelines."
These initiatives are so far-reaching that no other state designs its wellness programs like those proposed in North Carolina. The few states that punish smokers tend to charge a monthly fee. And only Alabama has a law on its books to charge a fee for obesity.
The idea to force state workers into new insurance plans is much more dangerous than the fee system used in other states. Health researchers know that if a state employee is suddenly required to pay steeper deductibles it will likely deter him from seeking needed medical care.
Legislators have time to craft more reasonable and effective wellness provisions before 2010. State Rep. Pricey Harrison wisely called for more study of these programs to fully understand the unintended consequences. Let's hope a few lawmakers listen.
State Health Plan officials and legislators claim they want to save money and improve the lives of state employees by showing them tough love.  The problem is that state actuaries have not predicted any savings from these ill-defined wellness programs. Even under the rosy assumptions presented by the plan's executive director, Jack Walker, the initiatives would only break even over the first three years.
And if legislators and State Health Plan officials want to do something nice for the people who guard our prisons, patrol our highways and teach our children -- especially in a year when we are cutting salaries and laying off workers -- I'm sure a simple "thank you" would suffice.
Durham:  May 7th;  6pm to 8pm; Dinner provided.  Goldenbelt Building; 807 E. Main St.  Bldg. 2, 3rd Floor.  (Suite 2-300)  HAC is organizing a small business roundtable discussion about health reform and what small business concerns are moving forward.  BE SURE TO RSVP TO HOPE FOR THIS MEETING IF YOU ARE A SMALL BUSINESS OWNER/WORKER AND WISH TO COME.
Wilmington: Friday May 8th;  8:30-10am;  Cape Fear Health Policy Council meeting ;  New Hanover Health Department Auditorium;  2029 S. 17th St.
Raleigh: Saturday May 16th; 12-5pm; Yolanda Adams Health Fair; Wake Chapel Church
Raleigh: Monday May 18th;  10am-12pm; NC Health Access Coalition quarterly meeting; AARP-NC office.  Note:  We will have capability to call into this meeting for members outside of the Raleigh area.  Please contact HAC Assistant Director Nicole Dozier at  to RSVP and to get phone information to call in.  919-856-2146.
Raleigh:  Wednesday, May 20th:  The Coalition, an organization advocating for people needing services for mental health, developmental disabilities and addictive diseases, is having its legislative advocacy day at the General Assembly. 
For more information on above meetings:  HAC Outreach Coordinator Hope Marasco ( 919-863-2405)
CHILD HEALTH COVERAGE - ANOTHER PARENT FORUM:  On Thursday evening, April 30th at East Garner Magnet Middle School, HAC participated at the Newcomers' Open House.  Over 200 parents attended with their rising 6th graders in tow and we had the wonderful opportunity to speak with so many parents.  We discussed eligibility for the state's affordable health plans (Medicaid and NC Health Choice) and how new eligibility numbers could mean eligibility this year if the family was just slightly over-income last year. Lastly, we provided the necessary tools for parents to work with us to make sure that North Carolina becomes a state where every parent can afford a health plan for his or her child.  For more information on upcoming parent meetings - or to request help with a parent meeting, contact Nicole Dozier, Health Access Coalition Assistant Project Director  (
TROUBLE WITH A HEALTH INSURANCE PLAN?  The NC Attorney General's Managed Care Patient Assistance Program has helped thousands of people having trouble with their health insurance companies.  They get results and they are there to help all North Carolinians.
FREE OR LOW COST HEALTH CARE RESOURCE:  The NC Institute of Medicine maintains an excellent resource for information about how to get health care in NC if you don't have much money.
MORE STATE REVENUE:  Check out the NC Budget and Tax Center's alternative revenue plan to raise additional revenue to close the budget gap by closing tax loopholes and making our tax system more fair.
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