North Carolina’s state pension plan and National Health Plan are facing serious financial challenges, State Treasurer Dale Folwell said Tuesday.
At the monthly meeting of the National Council, he said that his office recently conducted a “stress test” to determine the future of the pension plan. For the first time, it showed that the pension plan has a 75% chance of hitting its estimated rate of return in the next 20 years, which, as Folwell explained, is the result of a few things.
“We lowered the projected wage rate to be less optimistic, and when you’re less optimistic, that means more money has to go into the plan,” Folwell told members of the State Council. “When you see numbers like 2% or 3% (potential future earnings) it’s because that’s what the stress test was designed to do, to put it under stress for them. how it’s going to work in a bad economy, which we’re obviously doing. It’s been the last few days in terms of the stock market.”
He added that fewer state employees pay into the plan, and part of the reason is the employer contribution rate.
“It doesn’t mean that everybody who doesn’t pay is retired and draws a check,” Folwell said. “What that means is that we have a few people who are invested in this project but they are not mature enough to take money out of it, but that is mandatory. The project gets money from active workers, employers of those who contribute to this project, individually and as an institution.”
The National Health Plan is also under pressure, with a loss of $106.3 million for the 2023-24 financial year.
Folwell said during his monthly call with reporters on Tuesday that the plan is on track to drop below the legal minimum by 2025, or as he put it, “one epidemic of zero able to pay our debts.”
In addition, he added that the unpaid debt, which is now 30 billion dollars, continues to rise.
“Only 9% is funded now; it was backed by 2% when I came on board,” Folwell said. “Part of how it’s calculated is based on the 10-year municipal bond rate. If health care costs continue to rise, if prescription drug costs continue to rise, and the amount we’re we continue to receive it from the General Assembly does not correspond to the inflation, nor are we paid for the actual costs for things like. Activities related to COVID, you can see that will be a problem. ”
He also said that there will be no problem if the General Assembly agrees to pass reference-based prices, based on what the government pays for hospital costs, to save $300 million a year. In addition, he said that everything that is going on in the balance of the country is in good condition, except for the debt and the budget of the Department of Transportation.
Folwell says the answer to fixing the government’s health policy is not to raise premiums for families while many people are struggling with an inflationary economy. He said there is a simple five-point plan to solve this problem in the long term.
In addition to hospitals obeying President Biden and President Trump’s order on price transparency, he said hospitals need to be consistent in their charity care.
“It’s not their care of retail profits or some false number about charity care, but it’s real charity care with tax benefits that they’re getting,” Folwell said. “Number three, stop breaking people’s knees for not paying their bills. Number four, the General Assembly needs to wipe out the evil from the people of this country with a Certificate of Need, and number five, the administration multi-million hospital children must have the courage to show their contract and their compensation package, which I think will do. prove that their board of directors is encouraged to put profit over patients and as long as the boards of directors do not carry these CEOs and always put profit over patients, it will be very difficult to solve this problem.”
He also asked Governor Roy Cooper to sign a letter that the National Health Commission sent to Washington, DC, regarding the purchase of GLP-1 weight loss drugs such as Wegovy and Ozempic. He said it only costs $75 to produce drugs, but members of the National Health Plan were paying about $1300 a month for them. The letter would ask drug manufacturers to release the drug formula so that it can be given generically.
During a call with reporters, Folwell said he asked the North Carolina Department of Health and Human Services how much they were paying for the drugs now that they’re covered by Medicaid, but they hadn’t. get the answer.
“We deserve to know what North Carolina DHHS is paying for this GLP-1 drug,” Folwell said.
Folwell also spoke of a “cartel” of large state hospitals buying up some of the smaller hospitals, calling their billing practices “egregious.”
“We all know the disaster that happened in western North Carolina five years ago when HCA took over Mission Health,” he said. “When you see someone wearing a Mission Health uniform, that was a show of pride. It was part of the community, part of the family, now it’s a complete disaster, and I’m sorry that this matter has entered politics, but you know there is only one person whose finger is on the transaction. That is the attorney general [Josh Stein] of this country and when you see what happened with Mission Health and HCA and you see what happened when Novant took over New Hanover Regional and what a combination hospital it was in the mid-60s, this is happening all over the country. .”
#Folwell #warns #looming #challenges #NCs #pension #state #health #plans