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Rand bill stirs outcry: Effort to change health plan rapped
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Published: March 14, 2009
RALEIGH - North Carolina pharmacists are up in arms over proposed changes to the State Health Plan, which is on the verge of running out of money without legislative intervention.
A sweeping bill intended to repair the plan's finances is scheduled to be voted on by the N.C. Senate on Monday night.
The bill would provide an immediate infusion of $250 million from the state's "rainy day" fund to help close a shortfall in the State Health Plan, which provides health insurance to 667,000 state employees, retirees and their families.
The bill would also raise co-payments and deductibles for state employees, eliminate the most generous tier of coverage, and set up future cost increases for people who smoke or are obese.
All of those provisions are being hotly debated. But the portion of the bill that has perhaps raised the most ire would dramatically expand the use of filling mail-order prescriptions from out of state.
Pharmacists say that it would cause millions of dollars in lost business and cause thousands of layoffs at pharmacies across the state.
"You can't take half a million dollars out of a $5 million a year store," said Dave Marley, the president and chief executive of Marley Drug, an independent pharmacy in Winston-Salem.
But that's just what Marley fears that this bill would do to his pharmacy. It would be a severe blow, he said, especially since the recession is already hurting his business.
"We've made the employees aware. They are scared to death," Marley said.
The bill tries to save money on long-term prescription drugs for chronic conditions, such as diabetes or heart disease. The bill would set up a network of in-state pharmacists at which members of the State Health Plan could get those types of drugs. If members didn't use the network, they would have to use mail-order prescriptions, which would likely come from out of state.
If pharmacists joined the network, they would have to accept contracts with Blue Cross and Blue Shield of North Carolina, which administers the State Health Plan. Pharmacists say that the in-network rates would not cover the cost of providing prescription drugs.
For that reason, many pharmacists would probably not join the network, forcing many patients to order prescriptions through the mail.
"No one has calculated the trickle-down effects to the state economy," Marley said. "No one has asked what happens if we take this money out and send it to New Jersey," where a major mail-order drug-distribution center is located. A chief architect of the bill, Sen. Tony Rand, D-Cumberland, the majority leader, defended it this week, telling fellow legislators that the health plan's fiscal emergency is urgent and requires quick legislative action.
Under Rand's bill, there would still be no monthly premiums -- an important priority for some legislators and Gov. Bev Perdue.
Employees do pay premiums for family members enrolled in the State Health Plan. Rand said that the cost-saving provisions in his bill will prevent a 30 percent rise in premiums over the next two years.
According to Fred Eckel, the executive director of the N.C. Association of Pharmacists, "The problem with the State Health Plan is that you've got more older and sicker people in there, so they're using more medications."
And many of those medications are for chronic conditions that would fall under the bill's mail-order requirements. Some legislators say that the State Health Plan cannot be financially healthy if the state doesn't do more to encourage young, healthy employees and their families to enroll.
Eckel also worries that the bill's reliance on mail-order prescriptions would hurt patients, who may no longer be able to get all of their medications at their community drugstore from a pharmacist with whom they have a personal relationship.
"When you start fragmenting medication so you get some from here and some from there, we just think it could lead to more people not adhering, not bothering to get their medication," Eckel said.
■ James Romoser can be reached at 919-210-6794 or at jromoser@wsjournal.com.
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