Navigating Changes to the State Health Plan: What North Carolina Employees and Retirees Need to Know

North Carolina’s State Health Plan is undergoing significant changes aimed at controlling rising healthcare costs while maintaining access to quality care for its 750,000 members. These adjustments, driven by a need to address a recent $507 million deficit , will impact state employees, teachers, retirees, and their dependents. Here’s a breakdown of what you need to know.

The Core Challenge: Controlling Healthcare Costs

The State Health Plan faces the common challenge of escalating healthcare expenses. Administrator Tom Friedman has outlined two primary approaches to address this: increasing costs for plan participants or negotiating lower prices with healthcare providers . The chosen strategy focuses on the latter, aiming to leverage the plan’s size to secure better rates.

Introducing a Three-Tier Network Structure

The Board of Trustees recently approved a three-tier network structure designed to incentivize members to choose preferred providers . This system will categorize providers as follows:

• Preferred Providers: These providers have agreed to lower costs for plan participants and will likely offer the lowest out-of-pocket expenses.
• Access Providers: This tier is designed to maintain access to care in rural areas and outside of North Carolina where provider options are limited.
• Non-Preferred Providers: Providers in this tier have not agreed to lower costs, and plan participants will face higher out-of-pocket expenses to witness them.

Copays associated with each tier will be determined at the board’s June 5, 2026 meeting .

Steering Patients to Value-Based Care

A key component of the plan is directing more patients to preferred providers. The State Health Plan has already seen success with a partnership with Lantern, offering no-cost surgeries to members who choose Lantern providers. More than 400 surgeries and procedures have been completed through this platform . The plan aims to replicate this approach for non-surgical care.

Potential for Premium Adjustments

Plan officials are also exploring tying future premium growth to wage growth. For example, a 1% raise could result in a 1% premium increase . This approach aims to make premium increases more predictable and aligned with employee earnings.

Calls for Transparency and Re-evaluation of Aetna Contract

The State Employee Association of North Carolina has urged trustees to make provider contracts public information, believing greater transparency could aid in negotiating lower costs . Some union leaders have called for a re-evaluation of the contract with Aetna, the state’s third-party administrator, citing concerns about rising premiums and copays. Aetna clarified that it does not set premiums, copays, or benefits, stating that these decisions are made by the State Health Plan’s Board of Trustees .

What This Means for You

The changes to the State Health Plan are designed to ensure its long-term financial stability while providing affordable healthcare to its members. As the plan evolves, it’s crucial for employees, teachers, and retirees to stay informed about their options and understand how the new network structure will impact their access to care and out-of-pocket costs.