It's 5.06 and welcome in to a Monday edition of the Carolina Journal News Hour on Charlotte's FM News Talk, 107.9 FM, WBT, I'm Nick Craig. Good morning to you. On Friday, the North Carolina State Health Plan Board of Trustees, SHP, voted on what are being called monumental changes to the plan over the next four years, including preferred provider hospital systems, benefit changes, and premiums for 2027. This was all alongside the announcement of a third-party administrator known as a TPA and a pharmacy benefit manager known as a PBM for 2028. All of this in effort to make improvements and reduce overall costs for the nearly 750,000 members that are covered by the state health plan.
According to Tom Friedman, the executive administrator of the state health plan, he said at the meeting on Friday, quote, we're beginning a new chapter in healthcare for the state health plan, one that's going to evolve. The goal of today is to change the status quo. It's moving through a different direction State Treasurer Brad Briner, who oversees the state health plan, likened the status of the plan in 2024 when it was projected to lose $507 million in 2026. and possibly go bankrupt soon after. He likened it to the state of IBM in the early 1990s, in which it was too teetering on bankruptcy and slated to run out of cash.
He said the company, much like the state health plan in 2024, had no plan to change, no coherent strategy, but then one of the greatest turnarounds in American corporate history because it developed a plan knowing what its strengths were and were building on them. And that, he said, is what they have been doing over the past two years with the state health plan, leveraging its key strengths, which are the size of the plan. As I mentioned, more than 750,000 members, engaged members, and providers that want to work with the plan and its members, which in turn works to help key members and keep them healthy. State Treasurer Brad Bryner said the tactics that go with our strategy will continue to evolve. Noting that even though the preferred providers were announced, they're still negotiating with other providers and kind of put the call out that it's not too late for others to join the preferred provider list within the state health plan.
A new provider tier system, including preferred access, non-preferred and out-of-network providers, were voted on during the meeting on Friday, with UNC Health and Novant making the cut for the preferred tier, joining the Iredaro Health System, Atrium Health, Granville Health, and some Duke Life Point. Healthcare facilities. In the non-preferred category, Freeman said in an announcement that the announcement will be made sometime in the next week on provider access in the triangle as negotiations are still underway between Duke Health and Wake Med. The board also voted to approve further, future rather, direct contracts between the plan and facilities for providers that meet the following requirements, provide the facility or provider preferred access status within the plan's network, and for facility providers must agree for two rates for goods or services payable by the plan. The goal of the tiered structure is to have as many members as possible use preferred providers, which will save the state health plan and its members the most amount of dollars.
With an estimated savings of one-third out-of-pocket costs, members who use those access providers, which are mainly in rural areas, will basically have the same copays and deductibles as they have now. State Treasurer Brad Breiner continued in his going back in time analogy to 2012, stating that members will be paying those, or there is an attempt to make sure that members will be paying those 2012 out-of-pocket prices. He said during the meeting, this is monumental. It saves thousands of dollars to the average member of the state health plan if they participate in the preferred provider program. Our members know that those thousands of dollars are much more important than the $2 to $4 premium increase that we will be talking about.
The executive director and Tom Friedman told reporters that they are trying to make benefit costs almost the same as they were in 2011 and 2012, and in some respects, even less, especially when it comes to out-of-pocket costs and surgical benefits. He noted that money from the volume of patients going to preferred providers will cut the cost for members to see specialists. As was mentioned at last month's meeting, emergency room coverage will be the same cost across all tiers, and there will be a very robust transition of care plan in place for those using maternity or NICU services, cancer or transplant treatments. The timeframe, according to Friedman, is indefinite with the current preferred provider and benefit health coverage not changing and will still be under that preferred status. The General Assembly allocated nearly $4 billion to the plan in the new state budget.
That has been all the talk, a lot of conversation on that over the last couple of weeks, which officially became law back on July the 7th. It includes a 5% increase in the state's employer contribution, which raises the state's contribution from $8,500 per individual to $8,925 annually for each member's coverage or $742 per month to $745 per month that the state is kicking in per member. Overall, members themselves will see a 5% increase in premiums as we approach 2027. On average, an employee paying $50 per month whose salary increased by 5% would Their monthly premium rise to $52.50, a $2.50 increase. A further breakdown shows that active employees would pay anywhere between $1.76 and $8.04 for individual monthly premiums, which could add up to $21 or $96 annually, depending on the level of the state employee and what their salary is.
Medical costs, Friedman said, are expected to hit 9% across the United States, the highest that number has been in 17 years, with state treasurer Brad Breyer saying that they've tried to keep premium costs consistent throughout the plan, but with rising medical costs, they can no longer do that.
However, they note that they will try to keep them consistent as a percentage of compensation and will be having discussions on premiums each year moving forward. It was noted that if a member is in an area with no preferred providers, they will still be able to have access providers. Also, some members who use access providers now will actually be saving money under some of these 2027 changes. Friedman stressed that the headlines shouldn't be that premiums are going up, but that the sickest plan members can now save thousands per year and the healthiest members hundreds per year. As well as referencing the discounts provided by UNC and Novant will allow the plan's sickest members to pay up to $7,000 less per year for health care if they are on the state health plan.
The plan and its board also awarded a third-party administrator, again, as I mentioned, known as a TPA, and a pharmacy benefit manager. They gave those contracts to Blue Cross Blue Shield of North Carolina effective January of 2028. This brings back Blue Cross Blue Shield as the TPA after a three-year hiatus. CVS Care Mark is the current pharmacy benefit manager for the state health plan, and they will remain in that position. I'll have those details coming up for you here in just a couple of minutes.
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Save up to 30% with promo code News at Lifelock.com. Terms apply. 521. Welcome back to the Carolina Journal News Hour, Charlotte's FM News Talk, 107.9 FM, WBT. We are talking healthcare on this Monday morning on the Carolina Journal News Hour, a busy Friday for the state health plan and its 750 members as that plan has gone through a pretty wide swath of changes over the last year and a half or so, being led in large part by state treasurer Brad Briner.
Just talked about some of the new details for premiums and the preferred provider network within the plan. In addition to voting on the preferred provider hospital systems, benefit changes and premiums for 2027 at their board meeting on Friday, the North Carolina State Health Plan Board of Trustees also awarded what is called the third-party administrator, known as a TPA, and pharmacy benefit manager, known as a PBM, to Blue Cross Blue Sheet. Of North Carolina effective January of 2028. This brings back Blue Cross Blue Shield as the TPA after a three-year hiatus. CBS Care Mark is the current pharmacy benefit manager for the state health plan, and they will stay in that position for now.
A spokesperson for Blue Cross Blue Shield told the Carolina Journal: Blue Cross North Carolina is grateful to be selected to serve the teachers, state employees, retirees, and families on the state health plan beginning January of 2028. As North Carolina's only not-for-profit health insurer serving all 100 counties, we're committed to working together with the state, hospitals, providers, and members to make health care more accessible and affordable. In the months ahead, our focus is on ensuring a seamless experience for members and partnering with the plan's leadership to deliver practical solutions that reduce costs and support better health outcomes. In April, the state health plan announced that it had canceled the request for proposal for third-party administrator services as none of the bids received met the RFP's minimum requirements. That original RFP went out back in early March.
So a CVS Care Mark continuing in that role for right now. According to a press release, Blue Cross Blue Shield of North Carolina and Aetna were the only companies to submit bids for the TPA. It further states that Blue Cross Blue Shield's bid gives the plan the opportunity to save up to $1 billion over the life of the contract through deeper discounts and value-based payment opportunities on the top of the plan's preferred provider strategy. Reports say that the total value of the contract to the plan over three years would cost over $12 billion. Aetna, who is currently serving as the TPA, the third-party administrator for the program, released a statement to Carolina Journal on Friday saying, quote, we continue to believe that Aetna is the strongest partner for the state health plan.
Our expertise and services have helped the state health plan to advance its cost contamination goals, successfully implementing the plan's complex provider tier strategy and provide members access to high quality care. Aetna has been a trusted partner in North Carolina for decades, and that commitment remains steadfast in continuing to support the plan and its members through the end of the current contract, December the 31st, 2027. We will review this decision in the coming weeks and decide how best to move forward. Multiple vendors submitted proposals across the three RFP modules that were available, including claim processing, customer service, and retail network formula strategies, utilization management, and rebate administration specialties. And Blue Cross Blue Shield was the only vendor to meet all of the minimum requirements that were established by the plan and published through the RFP.
Process. The state health plan awarded Aetna its third party as its third party administrator two years ago. Aetna replaced Blue Cross Blue Shield in January of 2025 after it served as the third party administrator for more than 40 years. That change occurred in 2023 under former state treasurer. State Treasurer Dale Falwell, who characterized the deal with Aetna as a partnership that focuses on transparency and lower costs.
After several appeals by Blue Cross, along with court cases, the company said in July of 2024 that it would not appeal a judge's decision upholding the shift of the state health plans administration contract to Aetna. Blue Cross's contract bid was $45 million lower than Aetna's over the cost of the three-year contract, according to a Blue Cross news release in which they said Blue Cross North Carolina's proposal had the lowest administrative fees and tied for the first on network pricing. The release also touted Blue Cross as providing the broadest network of health care providers, saying in part, based on preliminary review of publicly available information, Blue Cross North Carolina's statewide network of total providers appears to be 38% larger than Aetna's. State Treasurer Dale Falwell said back in June of 2024, unfortunately, Blue Cross North Carolina was a sore loser. Loser in thinking that it was entitled to nearly half a century monopoly on the state health plan's business.
They decided to try a Sue-Till Blue strategy, costing the state over a million dollars in legal fees, for which taxpayers would welcome a reimbursement from Blue Cross. Thankfully, the judge saw through their legal gymnastics. Loretta Beniti, the director of communications and media relations for the state treasurer's office in Brad Briner, said in an emailed statement in April: The administration has a different priority and would prefer a contract that is more in line with those priorities. The plan is seeking partners who support the alignment of incentives between members, providers, and the plan, with future partners assisting us in improving health, delivering an excellent member and provider expertise while fostering financial sustainability. During the public comment period at the July the 10th board meeting, a 16-year-old girl whose family has been insured by the state health plan for 20 years told the board that Aetna has been more of an advert has been.
Been more of an adversary than an advocate in her family's health care. She said, along with her two sisters, were diagnosed with Crohn's disease over the past few years, and highlighted and documented that Aetna had demanded that the girl's medication, which had been working, be changed against their doctor's advice. And some of their other medical work, including an infusion site. After the new infusion site failed to report blood work results for her sister, creating a six-month lapse in monitoring, she had a spike in her symptoms and developed a resistance to her medication and is now looking for a new treatment protocol. She told the board members back in during the public comment period, this issue would have never happened if we were allowed to stay with her previous provider.
In addition, my middle sister developed a similar resistance to her medicine. Her doctor has one medicine that he feels would work well and solve her issues. We're currently on our third denial and appeal. Both contract terms with Blue Cross Blue Shield of North Carolina runs from January the 1st, 2028 through December the 31st, 2031, with two optional one-year renewal periods relevant there.
So again, some major changes coming to the state health plan. We've talked about those in pretty great detail over the last year or so. It will be Blue Cross Blue Shield of North Carolina that will be the third-party administrator and the pharmacy benefit manager as we move forward and flip the calendar into 2028. You can read more details. We've got a lot of images and charts as to how this can affect the more than 750,000 members of the state health plan.
A couple of different articles over on our website, CarolinaJournal.com. One, the headline, state health plan, OK's premium hikes, preferred providers. The other, Blue Cross Blue Shield of North Carolina, Wins State Health Plan, TPA, PBS. Contracts, those details over on our website this morning, CarolinaJournal.com. It's 538.
Welcome back to the Carolina Journal News Hour, Charlotte's FM News Talk 107.9 FM, WBT recapping the big political news over the weekend that you have likely already seen. Senator Lindsey Graham of South Carolina, one of President Donald Trump's closest allies in the United States Senate, unexpectedly died Saturday evening after what medical examiners are describing as a tear in his aorta. This is according to preliminary findings. I'll note preliminary there. The tear in the inner wall of the aorta was related to the hardening of Graham's arteries according to that report and enough with an official cause of death to be disclosed after a toxicology and other testing does continue.
His office had originally said that he suffered a brief and sudden illness Saturday night into the early parts of Sunday morning. Under South Carolina law, Republican Governor Henry McMaster will appoint a temporary replacement for Graham, who is seeking a fifth term in November. A new nominee will be selected in what will be a special primary, which is required to be held within weeks of a vacancy. The winner of that will go on to the November general election, and whoever ends up winning in that race will serve a full six-year term after the November election rolls through. We'll be keeping an eye on that and the ramifications that it will have throughout the United States Senate and some of the things that we've continued to talk about right here on the Carolina Journal News Hour.
In some other statewide news this morning, North Carolina slipped a one spot to number two in CNBC's 2026 America Top State for Business Rankings, ending its one-year return to the top. while extending one of the nation's largest streaks of top business rankings. Ohio is now claiming the number one spot this year, while Virginia ranked third. North Carolina now has finished among CNBC's top three states for business six consecutive years and in the top two, six years straight. CNBC evaluates states using more than 130 metrics across 10 categories of competitiveness, including the economy, workforce, infrastructure, business friendliness, education, technology and innovation, quality of life, cost of living, cost of doing business, and access to capital.
North Carolina posted gains in several key categories, helping keep it near the top of the rankings. The state ranked first in economy, up from third last year, third in workforce, up from fourth, and eighth in technology and innovation, up from 13th. It also improved the cost of doing business and access to capital. Donald Bryson, the president and CEO of the John Locke Foundation, credited the state's long-term economic policies, saying in part, North Carolina's sixth consecutive year as one of CNBC's top two states for business reflects the strength and durability of our state's economic climate. While other states rise and fall in the rankings, North Carolina has remained at or near the top because of years of pro-growth tax reform, responsible budgeting, a strong workforce, and a commitment to economic freedom.
The sustained record is the real story, and it gives policymakers a strong foundation to build on. Gary Salamedo, the president and CEO of the North Carolina Chamber, said that the rankings reflect both North Carolina's economic strengths and policy choices that helped create them. Salamito shared a statement with Carolina Journal saying in part, North Carolina. Carolina's number two ranking and sixth consecutive year among the nation's top two states for business reflects sustained success built over time. It is the result of strong policy choices, a talented workforce, and business leaders who continue to invest, create jobs, solve problems, and push our state to compete at the highest level.
We are leading in some of the categories that matter most to long-term competitiveness. Christopher Chung, the CEO of the Economic Development Partnership of North Carolina, said that the state's consistent performance reflects its diverse economy and workforce. Chung saying in a statement to Carolina Journal, North Carolina's business climate is strengthened by a birth of industries that call our state home. our world-class workforce and the nation's top-ranked economy. Those advantages continue to attract companies of all sizes, from Fortune 500 corporations to international firms establishing a U.S.
presence and manufacturers expanding long-standing operations. The state of North Carolina, however, lost ground in several categories. It ranked eighth for business friendliness, down from fourth, thirteenth for infrastructure, down from 11th, 12th for education, down from 6th, and 34th for quality of life, down from 29th, and 35th for cost of living. The state was at 23rd the year prior. Governor Stein said that the rankings demonstrate both North Carolina's economic momentum and the need to address the state's rising cost of living and infrastructure needs, with the governor saying in a press release, this ranking proves that we can't rest on our laurels.
Our other states want what we have and we've got to keep investing to build a stronger infrastructure, double down on our high quality of life, and make North Carolina more affordable to live, work and raise a family. Stein said that his administration is focused on lowering the costs of housing, childcare, health care, and utilities while encouraging lawmakers to make similar investments. Chung echoed the need for continued investments to preserve the state's competitive standing, saying in part, we're pleased that CNBC has once again recognized North Carolina as one of the nation's best pace for businesses, but rankings like these also remind us that maintaining our competitive edge requires continued investments in our workforce, infrastructure, and quality of life. The governor attributed the state's decline in several categories to the General Assembly's prolonged failure to pass a new comprehensive budget, with the governor saying in part: when a state goes more than a thousand days without passing a budget, you can't be surprised to see some consequences. I am confident that the budget is a launching pad, not our landing place.
CNBC said it slightly adjusted its methodology for the 2026 rankings, giving infrastructure the greatest weight among its 10 competitiveness categories. The network attributed the change in methodology to businesses increasingly prioritizing locations with stronger transportation networks, reliable utilities, abundant energy and water resources, and effective permitting processes as they evaluate sites for advanced manufacturing, data centers, and other major investments. The latest rankings come after, according to the North Carolina Department of Commerce, the state set a new record for announced job creations in 2025, with companies pledging nearly 34,000 new jobs and more than $23 billion in investments. The department also identified North Carolina as the nation's third fastest growing state thus far in 2026.
So unfortunately, falling one slot down to number two in CNBC, America's top state for business, some things for lawmakers and state leaders to take a look at as potential spots for improvements according to the survey. You can read more of our coverage. Plus, check out CNBC's entire list that is available this morning over on our website, CarolinaJournal.com. Look for the story with the headline, CNBC, North Carolina in top two states for business for sixth straight year. A warning from Jace Medical.
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Good morning again. It's 552. Welcome back to the Carolina Journal News Hour, Charlotte's FM News Talk, 107.9 FM, WBT. We are continuing our coverage of the recently approved state budget, diving into a variety of different factors and details as the new state budget allocates $48.9 million to the Agricultural Development and Farmland Preservation Trust Fund. For the fiscal year 2027, $46.9 million is allocated in non-reoccurring funding and $2 million in recurring funds as outlined in the conference report.
Steve Troxler, the commissioner of the North Carolina Department of Agriculture and Consumer Services, told the Carolina Journal, North Carolina is the third fastest growing state according to the U.S. Census Bureau. We are experiencing development across the state. Making it imperative that we take action to protect farms and farmland. We are appreciative that the new budget provides additional reoccurring funding for our farmland preservation efforts, bringing the total reoccurring funds to $7 million and providing an additional $46.9 million in non-recurring funds.
Interest in farmland conservation is great. Additional funds help ensure we have the farmland resources we need going forward to continue to provide for ourselves, the nation, and the world. Representative Jimmy Dixon, the Republican from Duplin County, recently told the Carolina Journal: For a couple of decades now, we've been very concerned about the accelerating loss of farmland in North Carolina. The Farmland Preservation Trust Fund that was initiated and set up by Commissioner Troxler has been a small effort directed towards. a huge problem.
But a lot of times the small efforts pay off. I'm very pleased with the amount of money that we've been able to allocate for farmland preservation. The North Carolina Department of Agriculture's Farmland Preservation Trust Fund has protected over 42,000 acres of farmland. North Carolina is the number one state at risk of farmland loss, according to Steve Troxler, as he told industry members that earlier this year, with the commissioner having concerns that North Carolina could reach a tipping point at which production increases cannot keep pace with land loss. Removing forests and farmlands from the state changes its makeup, and Troxler's concerns is that their disappearance will alter one of the most beautiful states in the nation, which attracts a high volume of tourism each and every year.
Currently, North Carolina is on track to lose 1.2 million acres by 2040, or about 11% of its current farmlands, according to the American Farmland Trust. That's a group called AFT, in a report published in 2024 by the University of North Carolina at Chapel Hill. The report reads in part, farmland preservation is an increasingly critical issue across North Carolina, where urban expansion and resource limitations challenge the sustainability of the agricultural landscape. There is currently an affordable housing crisis in North Carolina that has created high demand for residential development, with vast commercial development driving economic pressures in some North Carolina counties as well. This has driven many farmers to sell their farmland to developers.
Meanwhile, rising land values have constrained existing farmland preservation fund mechanisms. Between 2001 and 2016, North Carolina lost about 732,000 acres of agricultural land to housing development, according to AFT, as outlined in the report. Of that land, 387,000 acres were deemed to be nationally significant. which means that the land has been deemed best suited to growing food and crops. Kelly Lester, policy analyst for the Center for Food, Power, and Life at the John Locke Foundation, told the Carolina Journal, protecting farmland is a legitimate public interest, but expanding state funding should not be viewed as a substitute for addressing the policies that make farmland more vulnerable to development in the first place.
Before committing additional taxpayer dollars, lawmakers should ask whether existing land use and tax policies are creating incentives that the government is then paying to offset. The state of North Carolina's number one business does remain agriculture. We talk about that pretty regularly here on the Carolina Journal News Hour, the state making a major financial investment in the budget that was just signed into law by Democrat Governor Josh Stein last week, allocating some $48.9 million to the Agricultural Development and Farmland Preservation Trust Fund. You can read some more details this morning by visiting our website, CarolinaJournal.com. Look for the headline, NC Budget Allocates $48.9 million for farmland preservation.
That's going to do it for a Monday edition of the Carolina Journal News Hour. WBT News is next, followed by Good Morning BT. We're back with you tomorrow morning, 5 to 6, right here on Charlotte's FM News Talk, 107.9 FM, WBT.
