The North Carolina General Assembly has passed a budget to fund the state government for the next two years. Alongside the drawn-out budget fight, lawmakers also considered a proposal, House Bill 246 (HB 246), that would push health care costs even higher.
Increasing health-care costs for families and taxpayers while already struggling to reach consensus on existing priorities is reckless and fiscally irresponsible. North Carolina workers with health-care coverage through their employers already pay the second-highest premiums of any state in the country. As leaders in the General Assembly wrap up this year’s session and begin planning for next year, they must abandon health care proposals like HB 246 that will increase costs and make future budget debates even harder to resolve.
North Carolina has nearly 500,000 employees and dependents covered by the state health plan, the fourth most of any state; that’s more than 10% of all North Carolinians with employer-provided health insurance. So, when health care costs go up, the state — and the taxpayers that fund it — is left on the hook.
HB 246 includes new, burdensome government health-care mandates that would undermine North Carolinians’ pharmacy benefits. Pharmacy benefits are an often-underappreciated set of services in health plans that help control costs and increase access to prescription drugs. The benefits include creating pharmacy networks that allow patients to pick up prescriptions from lower-cost pharmacies, providing convenient prescription home delivery, and ensuring the quality and safety of complex medications.
Pharmacy benefits are proven cost-savers. Research has shown that, nationwide, companies that provide pharmacy benefits generate $145 billion in value annually and, on average, they save $1,040 per person covered each year. Here in North Carolina, the treasurer of the State Health Plan Board of Trustees, Dale R. Folwell, recently noted that pharmacy benefit management contract negotiation saves the state nearly $800 million.
So why do pharmacy benefits find themselves in legislative crosshairs? By increasing competition in the health-care industry and putting pressure on big drug companies to bring down prices, the companies that provide pharmacy benefits have made some enemies. The health-care industry is complex, and it can be easy for others to deflect blame by misdirecting attention to pharmacy benefits.
HB 246 would increase costs for health plan sponsors, like employers, by limiting their ability to use lower-cost pharmacy options in the coverage plans they provide. It would also add a new $10.24 fee for most prescriptions filled in North Carolina and take choices away from patients by preventing employers from covering certain pharmacies, like those that offer home delivery.
Thankfully, leaders in the Senate have considered these concerns and — despite pressure from special interests — did not allow HB 246 to pass, for now. Not only would the bill increase costs for North Carolina patients and employers in the short term, it would also make future state budget negotiations even more difficult by driving up health-care costs. Passing HB 246 would saddle the state with additional costs that future General Assemblies and taxpayers would have to deal with for years to come. I encourage the Senate to continue protecting our families from higher health care costs and reject HB 246.