Premiums must rise at least $20 for State Health Plan members, new NC treasurer says
Newly elected State Treasurer Brad Briner said Thursday that health insurance premium increases for 2026 are under consideration for State Health Plan members due to financial shortfalls.
Briner’s comments came during a meeting of the State Board of Education in a discussion on priorities by the board for the 2025 legislative session. “We’ve tried to be very transparent about the State Health Plan being in a reasonably dire financial state,” he said.
Briner said there is a $507 million deficit under the plan, which provides health insurance to approximately 750,000 state employees, teachers, retirees and family members, even after what he described as record contributions by the state legislature.
“There may be more juice to squeeze under that particular orange,” Briner said, but “the truth is everybody knows who buys health care in this country (that) the underlying problem is a cost problem.”
He said that he expected that after all possible savings are made, “we will unfortunately have to raise premiums” for the first time in nine years for all state employees.
He said he hoped to put in place a means-tested approach to minimize the impact on lower-paid employees. He said they were looking into a minimum increase of $20 per month per employee and proposed the education board could ask the General Assembly to offset the cost.
The State Health Plan’s board of trustees will meet on Feb. 7 to discuss the topic, with premium increases remaining a “2026 problem.”
“We do have a little bit of time, but not a lot.”
The Republican-controlled legislature passes a two-year budget, and this year, it’s expected to pass a budget for the two years ending in June 2027. The State Health Plan is primarily funded through premiums paid by employees and contributions from employers, such as state agencies, school systems, universities, and community colleges. Employer contributions for active state employees and eligible retirees are funded by the state through the budget.
During the board of trustees’ meeting in July, the health plan’s staff forecasted the plan to be $816 million in the red by calendar year 2027, with the plan “likely to be unable to pay bills in fall 2026.”
The previous treasurer, Republican Dale Folwell, often called attention to the plan’s financial shortfalls, which he said were caused in part by underfunding by the General Assembly.
Before Briner’s comments, Kim Jones, a Chapel Hill-Carrboro teacher and adviser to the board of education, urged the board to advocate for increased funding for the health plan. “It would be very powerful if the state board could stand in alignment with the treasurer’s office and very strongly speak to increasing funding for our State Health Plan for teachers and retirees,” she said.
Jones said the funding issues with the State Health Plan, along with insufficient compensation for teachers, could harm teacher retention.
“When we can’t afford to take ourselves or our children to the hospital, can’t carry our families on our health plans, and don’t receive compensation increases to cover inflation and the rising cost of living, we will lose good teachers,” she said.
Asked for comment, a spokesperson shared a statement from Briner, who said: “The magnitude of the State Health Plan’s financial challenge is well understood and demands swift, prudent remedies, some of which may be uncomfortable. We are not taking anything off the table — including the inevitability of premium increases.”
“We will collaborate with our legislative partners, who have provided the plan with record appropriations, and we will partner with providers to stabilize and reverse the cost trend. We will continue to work closely with our State Health Plan Board of Trustees to constantly identify areas where we can reduce costs through plan design, steerage and pharmacy modifications that maintain and improve the health of our members,” he said.
State Employees Association reaction
On Tuesday, Ardis Watkins, executive director of the State Employees Association of North Carolina, said the State Health Plan’s funding challenges are self-inflicted, attributing the problems to a lack of transparency in health care contracts and to some politicians’ failure to take action.
Without pricing transparency, “to think you should go to the employees and ask them for anything is outrageous,” she said.
“The State Health Plan would be perpetuating everything that’s wrong with American health care. Keep the people in the dark. Tell them health care is going up, but you can’t tell them exactly why, and they have to pay for it as the working people,” she said.
In 2019, Folwell launched the Clear Pricing Project aimed at increasing price transparency and controlling health care cost growth. The initiative set provider reimbursement rates based on Medicare payments, plus an average markup of 96%, cutting hospitals’ ability to negotiate rates. However, this plan faced resistance within the legislature, and most hospitals and providers did not participate, opting to continue under Blue Cross Blue Shield contracts.
The health plan is managed by a third-party administrator. Previously, Blue Cross Blue Shield handled the administration, reimbursing providers based on negotiated contracts that were not disclosed. This meant health plan officials couldn’t compare costs for the same procedure at different hospitals, such as UNC Health Care in Chapel Hill versus Duke Medical Center in Durham. Under Folwell, the plan announced Aetna would take over as administrator and share provider contracts with the plan.
Watkins said she had urged Briner to advocate for increased health care transparency in the legislature during his “honeymoon period” as the new treasurer. She said she believed Briner would propose something but argued that in the meantime, state employees should not be asked to bear the burden.
Retirees’ premium-free option
Another potential change could affect retirees’ premiums.
A 2025 Strategic Planning Document on the health plan’s website suggests possible updates to the option known as the Base PPO Plan (70/30). Specifically, it indicates that this plan might no longer be offered as a premium-free option for eligible retired employees.
Instead, the Medicare Advantage plan could become the sole premium-free option, with exceptions for Medicare-eligible retirees who are ineligible for Medicare Advantage.
The state board of education establishes policies and procedures for public schools statewide. It includes the lieutenant governor, the treasurer, and 11 members appointed by the governor and approved by the General Assembly.
This story was originally published January 9, 2025 at 2:54 PM with the headline "Premiums must rise at least $20 for State Health Plan members, new NC treasurer says."
