Well, that was weird.  S287, Tony Rand's State Health Plan Reform bill, has been on hold for close to two weeks.  It was on today’s calendar again, but no one expected it to come up for a vote – least of all the Sen. Maj. Leader's fellow Dems, several of whom were clearly caught off-guard by the news as well as by the amendment Rand offered on the floor.

The main point of the amendment was to do away with the whole prescription maintenance network proposal. (That was the 3-month mostly-mail-order rule.)  That change reduced the projected pharmacy savings from $91M to $38M, and Rand says the state will have to make up the difference of around $53M for employees. 

But the change drives up the cost of dependent care, too: employees who insure their spouses or families will see their premiums increase by almost 18 percent by 2011.  For perspective’s sake, 18% is more than $1000 a year, which amounts to roughly 2.5% of the average state employee's $41K annual pre-tax salary. 

Supporters of the bill say it’s the only way to keep the plan solvent. But SEANC’s Ardis Watkins says it’ll do precisely the opposite.

It would increase the dependent coverage, which drives even more of the people away from the plan that you want to get in it – the healthier, younger people that have left the plan. So it’s just going to dig the plan a worse hole to have to get out of.  Brilliant.

Some Democratic Senators apparently agreed.  Franklin Dem Doug Berger said the state should cap the increase and cover the rest, much as it did with the gas tax.  Cumberland Dem Larry Shaw asked for more time to consider the changes.

Sensing a brewing mutiny, Rand called a recess for a Dem caucus. The Republicans met, too.  By the time they all returned, what looked likely to be a wild-card vote had returned to the Senate’s usual straight party line – all Dems for, all Republicans against. 

There was one final amendment, but it was largely ceremonial:  It makes SHP contracts “public record,” except for all the info that isn’t public record (most of it),  which is already pretty much the case, anyway.   

Say what?

Your guess is as good as mine as to what happened in the Dem caucus.  But Tony Rand was a wee bit testy on the way out, asking one hapless TV reporter, “Where would you like to me to kick you? What kind of damn question was that?”  Rand was joking, but it was pretty clear he’d had enough fighting for the day.  Click below to listen to Testy Tony in his entirety. (4:34)

What's the rush?

A good question, not to mention the topic of considerable debate.

Early versions of the bill included $250M from the Rainy Day Fund needed to bail out the Health Plan, which is expected to run out of money by the end of the month.  But Gov Perdue put the kibosh on that when she seized the Rainy Day Fund, pledging she’d make sure the Plan got the $250M it needs to stay afloat. 

House and Senate leaders insist that only they, not the Gov, can appropriate Rainy Day Fund money to the Health Plan.  In theory, maybe so. But the Gov had previously declared a budget emergency, and possession being nine-tenths of the law, it looks from here like she's got the power to spend the money however she needs to.

So if the plan bailout’s in the Gov’s hands, then that leaves only one other matter of urgency:  getting the changes in place as soon as possible to save money.  It takes 60 to 90 days to change the SHP billing system, educate providers, etc. The plan year starts July 1, so Rand says S287 has to be passed and signed by next Wednesday.

If we don’t get it passed by April the first so we can put the benefit changes in place by the beginning of the fiscal year – if it’s postponed by a quarter, it costs us 45 million dollars.

But Chuck Stone with SEANC says a delay of a few days wouldn’t necessarily cost that much – and there’s nothing magical about changing on the quarter, either. “They could put (the changes) in place August the first or September the first,”  Stone said, adding that he’s “been getting irritated at the fact this thing is being rushed through.”  Hear more on that below. (:58)

Sen. Minority Leader Phil Berger didn’t think much of the rush job, either, and said so on the floor: “This is just not the way we ought to be doing business. I have some real concerns about us operating in this fashion.”

But it is true that each month’s delay in raising premiums will cost the state anywhere from $15M-30M, depending on whose numbers you trust.  And as Rand put it, “Why should you pay fifteen million when you don’t have to? ‘Cause if you go on and do it now, you save whatever that is, and I don’t know exactly what it is.”

The bill’s now headed for the House, where rank and file Dems have come to exactly zero consensus on what to do with it.  The House has less party discipline than the Senate, and more members who openly support state employees, so S287’s trip through the lower chamber could make the Senate battle look like a Sunday drive. 

"We won't whine, but...."

UNC president Erskine Bowles warned lawmakers today the system can’t sustain the deep budget cuts proposed by Governor Bev Perdue.  Her spending plan recommended permanent cuts of 192 million dollars from UNC’s bottom line.  Bowles says that would mean larger classes, less tutoring and advising, more college dropouts, and some serious layoffs.

For those who aren’t clear on the magnitude of the problem, Bowles offered this helpful comparison:

We’re gonna have to cut enough people on the Chapel Hill campus that if we were gonna keep our student to faculty ratio the same after the cuts as before – and that’s a good measure of your quality – we would have to not admit the entire freshman class. Now obviously, we’re not gonna do that.

Bowles says Perdue’s plan would do long-term damage in response to a short-term budget crisis. He’s asking legislators to make the cuts temporary, instead of permanent, and to allow UNC to furlough workers for 9 to 10 days instead of laying them off.  

Smokin’

House Majority Leader Hugh Holliman’s smoking ban, H2, passed J1 today, but not without a bump or two on its way to the House floor.

The bill the committee voted on today had been changed to reflect the fact that state law defines public spaces as "enclosed."   So the measure wouldn’t prevent smoking in outdoor areas, and it wouldn’t allow cities to ban it either, except on city-owned land like parks or playgrounds.  To put it another way, restaurant owners fortunate (or wealthy) enough to have outdoor areas or patios will still be able to accommodate smokers, while others won’t.  Trouble?

Two GOP amendments were advanced and then withdrawn.  Gaston Rep. Wil Neumann proposed exempting “patriotic, fraternal, or benevolent” non-profit clubs that have been in existence for 20 years and were not open to the general public.  But defining those clubs got tricky, so Neumann took it back for more work. 

Minority Leader Skip Stam also ran an amendment to specify that private business owners with no employees and no public traffic area could smoke in their workplaces.  Stam agreed to withdraw it at the request of sponsor Hugh Holliman. It was as pragmatic a move as it was gentlemanly: Republicans are so badly outnumbered on House J1 that both amendments will almost certainly find more support on the floor.  Both will likely resurface when the bill comes up for a vote, tentatively set for next week.

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