North Carolina State Treasurer Dale Folwell gave more insight Tuesday as to why the State Health Plan (SHP) decided to end coverage of popular weight loss drugs, including Ozempic and Wegovy, as of April 1. During the Council of State meeting, he said the drugs had the potential of costing the SHP $170 million this year for 22,000 people. He said the cost to the state would be the same as a 4% bonus to 253,000 state employees and would double the individual premium for everyone else on the state health plan from $25 to $50.
Folwell said his staff, as well as the SHP Board of Trustees, have for five months tried to find a solution that would help pay for the drugs, but every suggestion that they made to Eli Lilly, Novo Nordisk, or their pharmacy benefit manager was rejected, even one that would take the required BMI for prescription of the medicine from 28 to 35.
“DHHS has talked about the virtue of Medicaid actually paying for this weight loss drug,” he told the executive branch members. “So, if you think $170 million is a lot to the State Health Plan, wait till you see the actuarial note on what this can cost Medicaid in this state, and now CMS Medicare is looking at covering this drug. So, when the ingredients of this product are in short supply, and then the demand for this product is going to be continuing, all you can expect is for the price of this to go up.”
He said it wasn’t a decision that the board took lightly and that they do care about members, adding they made a decision five years ago to eliminate the cost of insulin and diabetes testing equipment for state employees. But they will continue negotiating with their pharmacy benefit manager, and the suppliers of this drug.
Folwell would later follow up with reporters in his monthly “Ask Me Anything” call, saying during the last seven years they have followed through on negotiating for better prices for those in the state health plan, including negotiating a Medicare Advantage product with a $0 premium for members. The move saved a billion dollars, which in turn was used to freeze family premiums for those on the SHP.
He said every penny that they save in the state health plan doesn’t get reverted back to the General Assembly, but instead stays in the plan to keep it solvent.
“We’re constantly looking for ways to do the most good for the most number of people, but when you have certificate of need laws in this state that allow the cartel to control the supply, quality, access, and pricing of healthcare, and they kneecap if you don’t pay your bill,” Folwell said. “As long as all of those things are continuing to go in that direction, it’s very, very difficult to sustain a plan like ours that is $34 billion in the hole just for the state health plan, according to the actuaries.”
Folwell went on to say that Gene Woods, CEO of Advocate and Atrium Health, along with other hospital executives, and the General Assembly could resolve a lot of the issues in a matter of hours. More than just increasing the quality and increasing the access, Folwell said, they could work towards lowering the cost of healthcare and more broadly protecting the consumers against unbelievable practices that are going on with healthcare billing.
He also said that his office plans to ask the General Assembly to put in a match of up to $25 a month for the 401k or the 457 plan for state employees.
“As the budget writers are writing the budget, there’s about a 50% gap between the local employee participation and the 401 and the state employee participation and the 401,” Folwell said. “You can’t talk about being retirement ready when you have that big a gap, and I think one of the biggest differences is the fact that many of the local counties and cities actually match their 401 or 457. Twenty-five dollars doesn’t sound like that much, but I think that’s, recurring, over $140 million a year, and we think it’s important for our plan to get people to do everything we can to encourage them to put money in 401s and 457s and be retirement ready.”
After his stint as state treasurer ends later this year, Folwell said he has no plans to run for political office going forward. He lost in his bid for the Republican nomination for governor to current Lt. Gov. Mark Robinson in the March 5 primary.
When asked if he has any plans to support Robinson, he repeated a statement that he said he made in the past.
“I’m not going to waste my vote going forward in my life on anyone, and you know what I’ve said previously about why I thought I was the best person for the job,” Folwell said. “It’s up to the Republican nominee to prove to the voters why, including me, why he’s the best person for the job.”
He said his office is proud of the work they’ve done, including retiring 60% of the state debt over an eight-year period.
Folwell ended the call by saying he thinks North Carolina needs to understand how vulnerable the state is to the federal government when it comes to inflation. Such fiscal recklessness drives up costs for everyone, including the cost of business for the state itself, he said, which is the largest business in the state.
“It’s going to have to be states of the union to keep this country together, and I don’t say that emotionally I don’t say it politically, because both political parties are responsible for this, but I do say it mathematically,” he stated.