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Treasurer Folwell Announces Medicare Advantage Premium Reduction

 

FOR IMMEDIATE RELEASE

July 26, 2017
 
Treasurer Folwell Announces Medicare Advantage Premium Reduction

 ​Treasurer, Groups Call for North Carolina Congressional Delegation to Take National Lead in Extending Moratorium on ACA Health Insurance Providers Fee

 
Raleigh, N.C. – North Carolina State Treasurer Dale R. Folwell, CPA, held a press conference today where he announced the renegotiation of the contract between the State Health Plan (SHP) and UnitedHealthcare to provide Medicare-eligible retirees with Medicare Advantage health insurance plans in 2018. 

Treasurer Folwell said that the rate for the basic plan was decreased to $120 a month for 2018, down from $120.65 a month in 2017. According to 2017 data, the average national increase in premiums bought in an exchange or private market is 25 percent. He also noted that this rate includes the Health Insurance Providers Fee (HIPF)/ACA Health Insurance Tax which had not been assessed during 2017 due to a moratorium passed by Congress in 2016. 

Folwell and representatives of State Employees Association of North Carolina and North Carolina Retired Governmental Employees Association called on the North Carolina Congressional delegation to take the lead on extending the moratorium, or repealing the tax altogether. If this occurs, the additional savings for the state in 2018 will be approximately $45 million.

During the press conference, Treasurer Folwell acknowledged a 50-year employee of the School Systems of Robeson County who is Medicare-eligible and about to retire. She was at the Department of State Treasurer to attend retirement counseling provided by the Retirement Services Division, but was invited to the press conference as a guest of the Treasurer.

“Our loyalty is to the participants of these plans and taxpayers. That’s what our fiduciary responsibility is,” said Folwell. “When we think about negotiating contracts on behalf of our participants, we think about people like you. We also think about our responsibility to provide these benefits in a financially sustainable manner. This renegotiation achieves all our goals.”

There are currently 150,000 Medicare-eligible state retirees using Medicare-Advantage plans through the SHP.

Also in attendance were Dee Jones, Executive Administrator, North Carolina State Health Plan; Carl Hill, Sr., Strategic Account Executive, UnitedHealthcare Retiree Solutions; Yolanda McClain, Client Services Manager, UnitedHealthcare Retiree Solutions; Chuck Stone, Government Affairs, State Employees Association of North Carolina; and Richard Rogers, Executive Director, North Carolina Retired Governmental Employees Association.


For complete audio of the press conference click here

A complete video of the press conference will be available here at 4 PM today

Background

UnitedHealthcare Medicare Advantage Contract Renegotiation
Health Insurance Providers Fee (HIPF)/ACA Health Insurance Tax

Overview

UnitedHealthcare provides Medicare-eligible retirees with health insurance plans. These plans combine Medicare Part A and Part B into a single plan and come from a Medicare-approved private insurer, like UnitedHealthcare, who contracts with the federal government. Many Medicare Advantage plans offer extra benefits beyond original Medicare, including prescription drug coverage, at no additional cost beyond the monthly plan premium.
UnitedHealthcare provides Medicare Advantage insurance coverage, through the North Carolina State Health Plan (SHP), to Medicare-eligible state retirees. Treasurer Dale R. Folwell, CPA, and the SHP team were able to renegotiate the contract with UnitedHealthcare to decrease the rate paid by the state for each retiree choosing one of the offered plans. 
In addition, the negotiated rate includes the Health Insurance Providers Fee (HIPF)/ACA Health Insurance Tax which had not been assessed during 2017 due to legislation passed by Congress in 2016. Whether the tax is allowed to be reassessed in 2018 is dependent on whether it is addressed as part of Congressional health care or tax reform. Participants are calling for the North Carolina Congressional delegation to take the lead on extending the moratorium, or repealing the tax altogether. If this occurs, the additional savings for the state will be approximately $45 million.

Facts about the renegotiation with UnitedHealthcare:

There are 150,000 Medicare state retirees using the plans through the SHP
Rates paid by the state decrease to $120/month for each Medicare-eligible retiree for the Medicare-Advantage Base Plan in 2018 (2017 rate was $120.65)
Maintains $0 premium for the Medicare Advantage Base Plan (subscriber only)
Rate includes HIPF that was not part of 2017 rates
If Congress extends the moratorium on the tax, rates could further decrease by approximately 30 percent
Average national increase (2017) in premiums bought in an exchange or private market: 25 percent

Facts about Health Insurance Providers Fee (HIPF)/ACA Health Insurance Tax

Section 9010 of the Patient Protection and Affordable Care Act (ACA) imposes a fee on each covered entity engaged in the business of providing health insurance in the United States 
A moratorium on the fee/tax for 2017 was passed by Congress in 2016 (for 2017)
The fee/tax will be reassessed in 2018 if not suspended/eliminated by Congress as part of either health care or tax reform
The tax/fee increases premiums by approximately 30 percent in 2018 if not repealed
If repealed, the state would save approximately $45 million in 2018
HIPF/ACA Insurance Tax expected to assess $14.3 billion in taxes nationwide in 2018

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The State Health Plan, a division of the Department of State Treasurer, provides health care coverage to more than 700,000 teachers, state employees, retirees, current and former lawmakers, state university and community college personnel, and their dependents.


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