At their board meeting on Tuesday, the North Carolina State Health Plan Board of Trustees voted in favor of making benefit changes to the State Health Plan (SHP) for its 750,000 members for the 2026 benefit year.
With the change for Active and Non-Medicare members, those under the 70/30 plan would see their annual deductibles go from $1,500 for singles and $4,500 for families to $3,000 and $9,000, respectively. Under the 80/20 plan, deductibles will go from $1,250 for singles and $3,740 for families to $1,500 and $4,500 respectively.
Primary care office visits and specialist visits would see little or no increase.
The plans will also have a name change. The 70/30 plan will now be known as the Standard PPO Plan and the 80/20 will be known as the Plus PPO Plan.
Health premiums will be voted on at the board’s next meeting in August.
North Carolina State Treasurer Brad Briner and SHP administrators said the changes were necessary to address the plan’s projected deficit — $507 million in 2026 and between $800 million and $900 million in 2027.
He noted that premiums haven’t increased in eight years. Cash reserves had been used to offset any changes to the plan, but the plan is almost out of reserves, necessitating the change.
Where Is the money going?
The following shows a breakdown of where the money has been going in the SHP.
There was some good news addressed by Briner as premium increases for the lowest-paid employees were only expected to rise $5 per month rather than the $20 per month that was originally projected when they last met in February, thanks to work by the SHP team and the federal subsidy.
Under the new benefit design, out-of-pocket maximums for families in the base program do not substantively change, and all prior authorizations for independent primary care are eliminated.
Tamika Walker Kelly, president of the North Carolina Association of Educators and the State Public School Employees Union, reiterated the same points she made at the February meeting during the public comment period.
She stated that if premiums increase, more people, such as bus drivers, cafeteria workers, teacher assistants, and even teachers, may decide to quit, noting that more than 8,000 school positions were vacant at the start of this year, and one in five teachers left the classroom over the past two years. She stressed that the burden should fall on the General Assembly to pay for the increasing costs.
Thomas Friedman, SHP executive director, said both the state Senate and House have agreed to make a 5% contribution in their budget proposals, up from 3.3% in the last fiscal year. The 5% increase equals $500 million over the biennium. He commended them for their efforts, given the ongoing needs in western North Carolina from the devastation of Hurricane Helene and the projected budget shortfall next year.
Briner also commented in a press release on Monday on the House’s proposed budget.
“State House leaders have taken the needs of state employees to heart in this budget proposal,” he said. “The House proposal fully funds the pension plan and increases funding to the State Health Plan to help in our effort to provide affordable, high-quality health care for state workers. Investments made in salary increases and cost-of-living bonuses will help ensure that the state can retain top talent.”
In March, Briner was critical of Democrat Gov. Josh Stein’s $33.6 billion budget proposal for Fiscal Years 2025-2027, saying it would create a $206 million shortfall in retiree funds over the next two years.
Friedman said that funding for GLP-1 weight loss medications was not included in the House budget, but was in the Senate’s version, and they will have to wait to see what happens in conference.
He said the goal of the overall benefits structure changes was for members to pay as close to $0 as possible.
Members who receive covered benefits through preferred providers or facilities participating in a bundle program will have a lower out-of-pocket cost for specific programs, such as orthopedic services and procedures. Members can still choose to see whichever provider they prefer, but it may come at a higher cost if they aren’t in the bundle program.
Friedman said that under the bundle program, they went with providers with a long history of performing procedures routinely.
Clear Pricing Project going away
The Clear Pricing Project will end in its current form on Dec. 31 and evolve into Preferred Providers for primary and specialty care, and behavioral health.
New benefits coming
Friedman said some new benefits are coming for members that will aim to keep them healthy, including Hello Heart, a service that provides rural members with tools to monitor blood pressure daily and receive health coaching; and Food As Medicine, a pilot program that provides high-quality food to rural members.
Very little change in medicare advantage plans
Very few changes are coming to Medicare Advantage Plans, including the change from one to two ID cards, one for medical and the other for pharmacy. That change will save the SHP $70 million.
But, there are changes coming to the Medicare 70/30 PPO Plan, including a higher deductible, higher out-of-pocket costs, and other adjustments.
next Steps
The next board meeting on Aug. 15 will determine the premiums for 2026. Open enrollment for members will take place from Oct. 13-31.
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