North Carolina's state health plan needs a $250 million injection, state treasurer says

North Carolina's state health plan needs an injection of $250 million from the state legislature to avoid a looming shortfall of capital, according to outgoing State Treasurer Dale Folwell.

Why it matters: Without the money, the plan — which covers hundreds of thousands of current and former state employees — could struggle to cover costs by 2026, Folwell warned.

• "We're one pandemic away from not being able to pay our bills," he added.

Driving the news: Folwell told reporters Tuesday the state health plan is facing a loss of more than $106 million in the upcoming fiscal year due to increased drug and health care costs as well as lingering COVID-related expenses.

• The state health plan has more than $500 million in COVID-related expenditures, but the most recent state budget reimbursed the plan for less than half of that, he said.
• A spokesperson for Senate leader Phil Berger has not yet responded to a request for comment.

Between the lines: The $250 million Folwell is requesting would only cover COVID-related expenses and is not a long-term solution to the health plan's financial outlook.

• Because of growing health care and drug costs, the state will need to appropriate more money in the coming years to the health care plan, Folwell added.
• He also is hesitant to raise premiums for members of the state health plan, when many of them are already struggling with inflationary pressures.
• "We need them to fully fund the state health plan based on the cost, period," he told reporters.

Context: Folwell's office has been cutting administrative spending and trying to negotiate with drug makers and hospitals for lower costs.

• Notably, the state health plan stopped covering weight-loss drugs like Ozempic because of their high cost.

What they're saying: "This is not a crisis that's going away, and ultimately, it's going to impact those that teach, protect and serve," Folwell said. "That's why look forward to a real honest, open, mathematical conversation about where the state health plan is going forward."

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