NC State Health Plan Abandons Commercial Carriers

If you have not already heard the State of North Carolina, our home, is abandoning the commercial health insurance market January 1, 2020 as announced by Dale Folwell, the State Treasurer.

The reason is simple. There is no other way for the State to control the costs of healthcare services for its massive base of staff all over the State. This is a big move for a historical BCBS of NC shopper, as a state plan, which is not indifferent from many old-antiquated insurance purchasers all over the U.S. The Blue Cross Blue Shield organizations have historically had a strangle hold on that marketplace.

So just like our mission at Navinsure, the State will move towards a reference-based pricing methodology. This is something we have focused on for the last 5 years as the traditional insurance carriers have left consultants and employers little choice than to take matters in to their own hands. Much like other states that have instituted similar strategies (Montana and Maryland for example) North Carolina is expecting to both control costs, increase transparency, customize plans and to stabilize hefty annual renewal increases.

As Folwell stated, “We’re going to be asking a little from a lot of people, and a lot from a few. I’m asking health care providers in the state to help us sustain this benefit for teachers, public safety officers and other public servants,” Folwell said. Let’s hope healthcare providers will embrace this bold move and help our State become what it once was prior to the ACA – specifically I mean not a top 3 worst states in the country for health insurance costs, limited choices, and at the same time, poor healthcare services. Yes, you read that correctly, today North Carolina is rated at the bottom of the US healthcare market, and at the same time we have some of the worst premium structures and choices as well. It was not always this way.

As consultants like us work hard to break the monopolistic behaviors of some carries, and mega-hospital systems, I am hopeful we will be able to return to an affordable structure both here, and across our bordering states. It will take time, commitment, and most of all, and open-mind from providers. The status quo is unacceptable, unaffordable, and unsustainable. Way to go State of North Carolina. Lead the way for employers all over our State to break from network-based insurance carriers, and in to solutions provided by dozens of great third-party administrators. They can and do provide strong, customizable and transparent models for employers all over the country, no less, our great State here at home.

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