State employees could see lower costs for healthcare services next year under a new "preferred provider" program approved by the State Health Plan board Tuesday — if they're willing to choose a specific provider that might come with a longer drive.
The Health Plan is negotiating new contracts with specialists and other medical providers. The providers agree to offer services at a lower cost, and in return the State Health Plan will steer more patients to them by lowering co-pays and deductibles.
State Treasurer Brad Briner says patients who choose those providers will pay less in 2027 than they do currently for the same services.
"That's not just good for you, that is good for the sustainability of the (State Health Plan) too, which is also good for you," Briner told WUNC News. "So that's why it works in the long run. It's good for the provider too. So it's not this game of annual whack-a-mole, of trying to extract more and more discounts. The providers love it. They're getting more business at a good margin, and that's better for their practice."
Patients in urban areas who choose providers that aren't participating — labeled "non-preferred providers" under the new tier system — could see their costs increase, and they'd face a higher annual out-of-pocket maximum.
In rural areas with fewer providers, costs likely won't change. Most in-network providers there would be termed "access providers," with the same patient cost structure as State Health Plan members currently see. That will also apply to patients who see providers in other states.
"We have to create the incentives for the member to do something differently," said Thomas Friedman, the health plan's executive administrator. "The best way to incentivize members to do things is to give them a better deal. I think people like $0 surgery. People like cheap primary care, so that is where we're going to double down."
The approach expands on the State Health Plan's relatively new surgery benefit program. Using a third-party administrator called Lantern, Health Plan members can get free surgery if they use providers who have agreed to lower prices. The Health Plan pays less overall for the service, and it passes some of that savings to the patients by eliminating their share of the cost and helping with travel costs if the surgeon isn't nearby.
Briner says the discounted contracts with healthcare providers could save hundreds of millions of dollars. The State Health Plan has been working to reduce a $1.4 billion deficit, which resulted in cuts to some costly treatments like new weight-loss drugs.
"The reinstatement of some kind of weight-loss program with GLP-1 (medications) would be something we'll do with those savings," he said. "We're not there yet, but it's really important, because we have these members for life, and there's no risk factor bigger than obesity."
After a big increase in premiums this year, the State Health Plan is also looking at tying future premium increases to employee pay increases. So if a state worker gets a 2% increase in their salary, their monthly health insurance premium would also increase by 2%.
"There are lightning bolts out of the blue that could come that might disrupt that, but we really think we can achieve that for the long run," Briner said. "We think it's extremely likely that we can hold that promise."
Charles Owens, a state employee who works at the Cherry Hospital mental health facility in Goldsboro, urged the State Health Plan board to keep costs down.
"We're hurting because our healthcare costs have gone up, and we're at a point where we can't afford to get sick," he said during the board meeting's public comment period. "I've watched people, my employees, that can't get to preventative care because they can't afford it, so they ended up in critical care."
Details on the new "preferred provider" program will be finalized later this spring at the board's next meeting.
