How California, North Carolina, and Ohio are Managing Workforce Health Care Costs

New Center for Excellence issue brief

WASHINGTON, July 6, 2011 /PRNewswire-USNewswire/ -- A new issue brief from the Center for State and Local Government Excellence finds that California, North Carolina, and Ohio rely on a combination of wellness programs and cost containment to rein in cost increases.

The brief, "Health Insurance for Active and Retired State Employees: California, North Carolina, and, Ohio," analyzes the cost of providing health insurance, along with changes in health plans the states have adopted to slow cost increases.

California: Beginning in 2004, the California Public Employees Retirement System (CalPERS) initiated measures to contain costs and improve health outcomes, including promoting hospital performance transparency and managing hospital costs; eliminating high-cost hospitals from the Blue Shield network; adjusting premiums for regional markets; encouraging the use of generic drugs; adding lower-cost health plans; and adopting a series of wellness programs.

The California WorksWell Health Promotion Program also promotes wellness among state employees through reduced membership rates at more than 2,200 health clubs throughout the state; discounts for weight loss programs; and online resources for disease prevention and creating a healthy lifestyle.

North Carolina: The State Health Plan of North Carolina (SHP) has evolved from a traditional fee-for-service or indemnity plan to offering a choice of various types of HMO and PPO managed care plans. Recent legislation fundamentally alters the management of the plan and authorizes the SHP to impose employee premiums for the first time. The legislation also moves the administration of the SHP from a committee of the General Assembly to the Office of the State Treasurer. 

In an effort to slow the rise of the cost of the SHP, the legislature also instituted a series of wellness programs to help employees quit smoking, start exercising, and reduce their weight.

Ohio: The state has introduced wellness programs to improve health and reduce plan costs. The "Stay Healthy, Save Money" plan offers preventive care with no deductible, co-payment, or co-insurance; employees and their spouses can earn incentives for participating in the program. Retirees can also earn incentives by choosing a less expensive medical plan and taking advantage of health management wellness, and preventive care programs.

In 2007, to improve the long-term solvency of the state's Health Care Fund, the Health Care Preservation Plan (HCPP) began providing monthly allowances for the purchase of medical and pharmacy coverage based on the number of years of service, which are set at retirement and adjusted annually for inflation.

The brief also

• considers the history and current status of health insurance plans for public employees and retirees in the three states;
• reports the actual and projected costs of health insurance and how they have changed over time in these states;
• examines the policy implications of the annual cost of health insurance and what changes these states have made in response to rising costs.

You can read the full brief at http://tinyurl.com/active-retiredhc.

About the Center for State and Local Government Excellence
The Center for State and Local Government Excellence helps state and local governments become knowledgeable and competitive employers so they can attract and retain a talented and committed workforce. The Center identifies best practices and conducts research on competitive employment practices, workforce development, pensions, retiree health security, and financial planning. The Center also brings state and local leaders together with respected researchers and features the latest demographic data on the aging workforce, research studies, and news on health care, recruitment, and succession planning on its website, www.slge.org.

SOURCE Center for State and Local Government Excellence