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Tues. II: State Health Plan bill passes
posted at 2009-04-15 00:19 | Last modified 2009-04-15 08:41
State House lawmakers voted 64-52 along party lines today to approve S287, a controversial measure that aims to keep the state health plan solvent by raising out-of-pocket costs and cutting benefits.
The bill underwent several floor amendments. The most notable was run by Wake Dem and former Blue Cross lobbyist Rep. Dan Blue. It requires the whole plan to undergo an "independent financial audit” (the findings of which Blue Cross is contractually allowed to censor), stipulates that any money reclaimed from overbilling be spent on lowering member costs (which won’t help the members who had to drop family coverage in the interim), and recommends that House budget writers consider apportioning extra money (which they don’t currently have) to offset the cost increase for low-income employees.
Critics were quick to denounce Blue’s amendment as a political CYA move. But it was evidently enough to persuade a handful of recalcitrant Dems to hold their noses and support the measure. Every Dem but two present in the chamber voted for the bill (and Speaker Hackney, who doesn’t vote unless there’s a tie), and all Republicans voted against it.
Correction: Two Dems did vote against S287 -- Marian McLawhorn (Pitt) and Darren Jackson (Wake). Sorry about that!
Also of note:
Rep. John Blust (R-Guilford) made a spirited attempt to transfer oversight of the State Health Plan to the Executive Branch, where he argues (probably correctly) it truly belongs. House Dems offered a slew of attempts to derail it, including a spurious call for a fiscal note by Senior House budget chair Mickey Michaux (D-Durham). Hackney fairly overturned that request, and he ought to get credit for it.
Logically speaking, this should have been the most attractive amendment on the House floor today. Fixing the state health plan has cost House leaders no end of time, energy, and political capital, and it’s a pretty safe bet they'll pay some political price for it in 2010. Yet they fought to maintain oversight of the Plan. Why? Because state lawmakers hate to cede any power to another branch? Or because Blue Cross's PAC is one of the legislature’s most generous campaign funders? You tell me.
Bottom line
State employees will go on paying nothing for their coverage. But those who want spouse or family coverage will pay a lot more for it – 21% more by 2011, under the House version of S287. That’s $103 more per month by 2011 for family coverage, $97 a month more for spouse only.
Opponents say the increase will only drive more healthy people out of the plan. Forsyth Republican Dale Folwell argued the current rates are already so overpriced that younger state workers can easily find cheaper family coverage on the retail market. He says raising the price will only make the problem worse. And he doesn’t understand why the price hike is necessary in the first place.
North Carolina, as an employer, is the largest purchaser of health care in North Carolina. Why can’t we do it better and cheaper than anyone else in the state?
Many of the Dems who voted for the bill didn’t think much of it, either. House Health Chair Verla Insko (D-Orange) admits S287 moves the State Health Plan in the wrong direction. But she voted for it anyway as the lesser of two evils. The other option, she said, was to approve the $250M bailout needed for this fiscal year, but hold off on changes till next year – a choice she says would have cost the state an additional $100M for the year.
You know it’s like having two – that you have no good choice? I thought going ahead with this was the better of the two choices that I didn’t like. I didn’t like either choice.
The House approved the measure on second reading, and, after House Minority Leader Paul Stam (R-Wake) withdrew an objection, it went on to win third reading as well. It now heads to the Senate for concurrence. It’s likely to go to conference, but you never know – Senate sponsor Tony Rand just might be ready to wash his hands of it by now.
Making Bailout
In case you were wondering, Governor Bev Perdue has not yet bailed out the Health Plan.
Last month, the Gov. seized the state’s $787M Rainy Day Fund, promising to earmark $250M of it to keep the State Health Plan afloat. Her action touched off a battle with legislators over the authority to spend the reserve fund. Lawmakers say they alone can appropriate the money. But Perdue seized it under a budget emergency, which gives her the right to use it however she needs to.
Possession may be nine-tenths and all that, but it seems Madame Gov would prefer to let legislators spend the money themselves, as long as they do it soon. Perdue spokesperson Chrissy Pearson confirmed late last week the Gov has not yet sent the health plan a $250M check: “She hopes the General Assembly will pass a bill.”
Health Plan chief Jack Walker warned lawmakers months ago the plan would run out of money by the end of March, but we haven’t yet heard of any bouncing SHP checks. I’ll let you know if we do.
Comments? Drop me a line.
