NC Officials Hear From Other States on Running Employee Health Insurance Plans
State Treasurer Janet Cowell invited administrators of state employee health plans from around the country to Raleigh Friday to hear other states’ experiences with insuring their workers.
By Rose Hoban
State officials from around the country convened on Raleigh Friday to share experiences of managing the health insurance plans for their states’ employees and retirees.
The gathering was organized by State Treasurer Janet Cowell, whose office assumed governance of North Carolina’s State Health Plan last year.
Instead of the plan being run by the General Assembly, there’s a new board of trustees that governs the State Health Plan. Trustees are looking for ways to control costs in the plan that covers more than 663,000 teachers, state employees, retirees, and their families, and is the largest insurance plan in the state.
All of the gathered officials shared their common challenges: providing decent benefits for their current workers in lean economic times and providing promised benefits for retirees who are living longer.
“We want folks to see a snapshot of what’s going on around the country,” Cowell said. “We wanted lots of ideas, a menu of options for everyone to think about as we’re going into the strategic planning process.”
Getting employees to be healthier
One overarching theme of the day was how states managed to induce workers to get and stay healthier, as well as share in the costs of insuring them. States’ solutions have been widely divergent.
Rhode Island Department of Administration head Susan Rodriquez described how her state government negotiated for a year and a half with the state’s heavily unionized workforce to get workers into programs to be healthier, as well as pay more of their insurance costs.
“We were in difficult bargaining discussions with all union leadership. We weren’t able to get anywhere. The state had nothing to give,” Rodriguez said about their negotiations in 2008. “But governor felt strongly that employees needed to pay more.”
In the end, Rhode Island officials were able to convince union officials that it was their job to help their members get healthier.
“The unions turned out to be our biggest advocates,” she said of a deal that eventually saw union members pay more in premiums in exchange for receiving breaks on insurance costs by engaging in weight loss and smoking cessation programs, and by managing their chronic diseases.
Now in its fourth year, Rhode Island’s program requires employees to have a preventative screening visit, engage in physical and weight loss activities, and certify they’ve stopped smoking or are in a tobacco cessation program to receive all the cost breaks. Each workplace has a ‘champion’ who encourages co-workers to participate and to succeed.
Rodriguez said slow phase in of the changes was key, as well as leadership from the top and lots of communication.
“If we’d done all this in the first year, we would have failed miserably. People would have seen it as intrusive,” Rodriguez said of the program. “But by doing it step by step, raising the bar, we were able to build slowly, increase trust with them.”
Rhode Island’s experience contrasts with that of the failed Comprehensive Wellness Initiative attempted by North Carolina’s State Health Plan, and approved by the General Assembly in 2009, that included many of the same elements.
“In retrospect, we would have had more success if we did more grassroots support building,” said Lacey Barnes, the interim executive administrator of the State Health Plan.
“I do think it was a strange time in state government in respect to the State Health Plan. If we had not gotten into that $250 million hole, and could have done a premium discount as an incentive to participate, it might have worked,” Barnes said, referring to a massive shortfall in State Health Plan revenues that occurred in 2009.
The Comprehensive Wellness Initiative was repealed last year. Instead, state lawmakers voted to raise premiums for almost all state employees. “We believe that the only way to bend the cost curve is that people in it with skin in the game change their behavior.”
Attendees heard from health plan official sfrom other states that have taken a variety of steps to reduce their overall costs:
– Tennessee is in the early phases of a wellness initiative focused on managing state employees’ chronic diseases. More than 140,000 Tennessee state employees now have had wellness exams in exchange for getting a discount on health insurance premiums.
– An official from Virginia detailed a plan to reduce the costs of weight loss surgery. Now members who want it are required to attend a year’s worth of health coaching before and a year’s worth after the surgery. Virginia official Gene Raney said the plan has proven popular, has saved the state money, and has improved outcomes for the people who have had the surgeries since the plan began.
– Georgia official Trudie Nacin described how their state employees were given incentives to accept health insurance plans that are less generous plans than prior ‘gold plated’ plans that covered all but a small co-payment.
– Over the course of several years, officials in Indiana moved almost all of their employees into plans with high deductibles by offering to cash incentives and by reducing the state contribution for employees who stayed in traditional fee-for-service insurance plans.
“We believe that the only way to bend the cost curve is that people in it with skin in the game change their behavior,” said Dan Hackler from the Indiana State Personnel Department.
NC Treasurer Cowell said she believes there are few ways to find more savings in the State Health Plan as it currently exists, but can see how difficult it was in other states to do it well.
Cowell said her sense is that the new board of trustees won’t make radical changes, but will have to work with legislators and state employees to find solutions that are more ‘realistic.’
“We’re already shifted costs onto employees enough, we’re seeing that people aren’t going to the doctor,” she said. “We have to think about new changes to keep the plan strong.”
“We won’t see many changes in the short session, there won’t be the time,” Cowell said. “So we’re getting ready for the long session in 2012.”