The State Health Plan's Board of Trustees voted today to increase premiums by 5% for most members in 2027 and approved sweeping changes to how the plan pays for care — changes that will require every member to make more deliberate decisions about where they seek treatment.

SEANC Executive Director Ardis Watkins made clear before the votes what was at stake: the 3% average raise state employees received in this year's budget "is not going to cover inflation for this year and much less the increase y'all gave them for their health plan last year, and then what I assume will be an increase for them all this year." She's right. For the second straight year, health costs are outpacing what the state is willing to put in members' paychecks.

What's changing with premiums

For active employees, the 5% increase translates to modest dollar amounts for individual coverage — between $1.76 and $8.04 more per month, depending on your salary band — but family coverage increases are larger, ranging from roughly $26 to $42 more per month.

Retirees face some of the steepest increases. Non-Medicare retirees on the Plus Plan who cover dependents will see corrections to rates set too low in 2026, meaning some tiers are going up by 8% or more compared to last year. The per-retiree contribution from the Retiree Health Benefit Trust also jumps 26%, from $300 to $378 per month.

The bigger change: a four-tier provider network starting in 2027

Beginning Jan. 1, 2027, the plan moves to a four-tier network — preferred, access, non-preferred, and out-of-network. Where you go for care will now have a direct and significant impact on what you pay.

Members who use preferred providers will pay the lowest copays and deductibles. Access providers, which include hospitals and practices in rural areas where alternatives are limited, will largely remain cost-neutral. Non-preferred providers, however, will trigger sharply higher out-of-pocket costs. A specialist visit at a non-preferred provider, for example, means 30% coinsurance after meeting the deductible — compared to a $40 copay at a preferred provider on the Standard PPO Plan.

Which hospital systems are where

The board voted in closed session on preferred-provider contracts. When members emerged, the announcement was significant:

• UNC Health and Novant Health — Preferred (full systems)
• WakeMed or Duke (main system) — Access in the Triangle (still being finalized)
• Atrium Health and Duke Specialized — Non-Preferred

That last point matters enormously. Atrium is the dominant health system for much of the Charlotte area and western North Carolina. Duke Specialized serves many members in the Triangle who rely on Duke for specialty care. Members with established care relationships at those systems will pay significantly more starting in 2027 unless those negotiations change.

Emergency care is protected — any emergency department will be covered at the access level, regardless of the hospital's tier. Members currently in treatment for maternity care, cancer, or transplants will also have transition of care protections for at least the first year.

SEANC's take

We understand why the plan is making these changes. The State Health Plan was running a projected $500 million deficit, and something had to give. A tiered network that rewards lower-cost, higher-quality providers is a legitimate strategy — and we support efforts to make the plan financially sustainable.

But we are concerned about what this means in practice for members who live closest to Atrium or Duke facilities, for retirees on fixed incomes who cannot absorb another year of double-digit increases in dependent coverage, and for the broader reality that state employees keep being asked to pay more without proportionate increases in their pay. A 3% raise and a 5% premium hike — plus higher out-of-pocket exposure for anyone whose doctor lands in the non-preferred tier — is a net loss for too many of our members.

We will continue to push for better pay, better retiree protections and transparency about how these network decisions were made. Watch for updates as more details emerge — including the announcement of the plan's new third-party administrator and pharmacy benefits manager, which were being announced this afternoon.

What you should do now

• Check whether your primary care provider and any specialists you see regularly are in the preferred network. The plan's preferred provider tool is live at the State Health Plan website.
• If you are a retiree with dependents, review the 2027 premium tables carefully — your increase may be larger than 5%.
• If you rely on Atrium Health or Duke Specialized, start asking questions now. There is still time for those negotiations to change before 2027.