State House and Senate leaders approved their compromise of Senate Bill 287 late yesterday afternoon. House Democrats, especially the Wake County delegation, let working families and retirees down by passing on costs to the 667,000 State Health Plan members.

SB287 will cost taxpayers $675 million, while drastically reducing benefits for health plan members and their families. The 90/10 PPO Plus option will be eliminated July 1, 2009. As of July 1, 2010, smokers will move into the 70/30 Basic PPO plan. As of July 1, 2011, overweight individuals (determined by a State Health Plan body mass index chart) will move into the 70/30 Basic PPO plan. If dependents are smokers or overweight, all covered family members and the employee will be moved to the 70/30 plan. Dependent coverage premiums will increase 8.9 percent a year. Routine eye exam coverage will also be eliminated.

These changes will make North Carolina 50th in the nation in health care spending for family coverage, putting children, minorities and family members into the pool of millions of uninsured North Carolinians.

“You had one horrible bill that was made even more horrible by another chamber. And what else were they going to end up with? Something worse,” SEANC Legislative Affairs Director Ardis Watkins told The Associated Press.

“The devastating effect this bill will have on the working families of this state was not considered,” Watkins said in The News & Observer.

Read NC Health Access Coalition leader Adam Linker’s take on the bill.

Legislators admitted this bill was not a long-term fix for the plan, which drives younger, healthier members from the pool with rising dependent costs. SEANC will continue to seek transparency in the health plan contracts and ways for the health plan to control costs without punishing the members it serves.

SEANC members were present today during a House Insurance Committee meeting, where Blue Cross and Blue Shield of North Carolina CEO Bob Greczyn, who is paid a $4 million compensation package, said it was not his company's fault the State Health Plan is facing a deficit. He threatened to legislators that BCBSNC would have to lay off 500 employees if the nonprofit were not administering the health plan.

Greczyn also claimed if BCBSNC were to reduce their costs by 10 percent, presumably to save the state money, 120 jobs would be at risk and services such as claim turnaround times and customer service would suffer.

In the committee meeting, Greczyn claimed the nonprofit only makes $478,000 from health plan business. However, SEANC recently learned BCBSNC purchased $108,000 worth of radio ads to attack SEANC and Executive Director Dana Cope.

"Something doesn't add up here," said Cope, during a press conference this morning. "If Blue Cross only makes $478,000 on the State Health Plan, why are they spending a quarter of that to attack those helping the state's working families?"

Greczyn defended his $4 million compensation, stating it "won't solve the funding problems" of the State Health Plan. "Corporate executives are easy targets during tough economic times," he stated.

Greczyn's comments demonstrate his unwillingness to be a part of any solutions to alleviate cost increases for the state's 600,000-plus members in the health plan, in spite of BCBSNC's $1.3 billion reserves. His comments were all centered on the $250 million deficit from last year instead of addressing why projected costs are so high for the next two years.

In the committee meeting, SEANC Legislative Affairs Director Ardis Watkins presented the association's solutions for the health plan instead of passing Senate Bill 287, which increases health care costs for state employees and retirees:

The House Insurance Committee quickly passed the bill after giving Greczyn 20 minutes to address the committee and employee groups five minutes. The House Appropriations Committee will hear the bill next. SEANC members will continue to urge legislators that the bill is bad for the state's working families and fails to fully examine potential overpayments and other hidden costs in BCBSNC's administration of the plan.

To hear why it's a bad idea that legislators rush to pass SB287, listen to SEANC's latest radio ad here.