Home Opinion GUEST EDITORIAL: NC lawmakers want to waste $500M on hospital markups

GUEST EDITORIAL: NC lawmakers want to waste $500M on hospital markups

Dave DiFilippo

In a standoff pitting patients and taxpayers against the powerful state hospital lobby, a majority of your representatives in the N.C. House voted against your interests this week. 

Lawmakers advanced House Bill 184, which authorizes a study on the ailing State Health Plan and blocks the state treasurer from enacting cost-saving reforms, on a 75-36 vote Wednesday. Unless the Senate rebuffs the bill, expect health care costs for state employees and the taxpayers who fund their care to keep rising. 

This showdown’s been brewing since at least last September, when State Treasurer Dale Folwell went public with hundreds of blacked-out pages he received in response to a public records request for UNC Health Care’s insurance reimbursement contract. Folwell wanted to know if the State Health Plan was being overbilled, so it asked for the public hospital system’s reimbursement rates for BlueCross BlueShield of North Carolina, which administers the state plan.

“We know what we’re billed,” Folwell told the Carolina Journal newspaper last year. “We’re trying to figure out what we’re supposed to pay.”

UNC Health Care said its reimbursement rates are confidential and produced a comically redacted copy of the contract. Folwell had a problem with that. Collectively, we’re all on the hook for state workers’ health care costs. He simply wanted to ensure we weren’t being ripped off. 

In October, Folwell announced his Clear Pricing Plan, which would tie state employee health care reimbursement to Medicare rates plus an average 82 percent markup. That would provide price transparency and lower costs while providing what Folwell called “a substantial” profit margin for health care providers. 

It’s a careful, precise reform that balances taxpayers’ interest in saving money with doctors’ and hospitals’ need to make money. We’d call it a win-win — except Medicare plus 82 percent wasn’t rich enough for the health care industry. 

Under current North Carolina law, Folwell has the autonomy to change the reimbursement rate structure because he’s the elected keeper of the public purse and is tasked with ensuring the State Health Plan remains solvent. 

Rep. Josh Dobson, R-McDowell, filed HB 184 to defang Folwell and delay any change to the status quo by punting the matter to a legislative study committee. 


Conservative pundit Brant Clifton of The Daily Haymaker blog contends North Carolina Healthcare Association lobbyists had a hand in drafting the bill and accuses Republican sponsors of abandoning fiscal conservatism by putting special interests ahead of good governance. 

As the bill sailed through the House Health Committee on a voice vote — individual yeas and nays weren’t counted — Clifton knew the fix was in.

“Big government has won,” he wrote. “The rest of us are left standing on the sidelines, mouths agape in shock and awe, watching what’s being done with our money and wondering what the hell it is we voted for in 2010,” the year Republicans won control of the General Assembly for the first time since 1898. 

While the GOP campaigns on low taxes and small government, effective management of the State Health Plan boils down to basic fiscal prudence, and that’s not a partisan issue. As Folwell said in February 2018, “it’s not emotional, it’s not political — it’s mathematical.”

And the math is on Folwell’s side. The General Assembly’s Fiscal Research Division said in an actuarial note that enacting HB 184 and scuttling Folwell’s Clear Pricing Plan will cost the state $429 million to $591 million over the next three years. 

“The State Health Plan was moved to the treasurer’s department for a reason,” Folwell said in a statement. “This bill will cost taxpayers hundreds of millions of dollars, taking us back to where providers of health care and drug companies control the plan. When you have administrative responsibility without operational control, you have nothing but chaos.”

Your elected representatives in the House voted to waste half a billion dollars of your money in order to appease the hospital lobby and keep health care costs high.  

If you want to stop this brazen betrayal in its tracks, contact your state senators. Urge them to oppose House Bill 184 and let the treasurer manage the State Health Plan without legislative interference. 

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