By Grace Vitaglione
Bryan Lewis, 59, of Forsyth County, found a lump on his neck over a year ago. He had just moved to North Carolina and didn’t have health insurance through his employer, so he signed up for a plan through the insurance marketplace created by the Affordable Care Act.
Soon after, he was diagnosed with tongue cancer and had to start radiation and chemotherapy treatments. The radiation caused him to be unable to eat or drink, and he eventually had to subsist on a feeding tube.
“It was not easy by any stretch of the imagination,” Lewis said.
Throughout the process, his insurance company repeatedly denied some of the more expensive procedures, such as CT and PET scans, which were used to gauge the extent of his cancer. His doctor had to tell the insurance company it was crucial that Lewis receive the treatment.
“There’s no question the system is broken,” Lewis said.
This treatment vetting process is known as prior authorization, where insurance companies require patients and doctors to follow specific procedures before they’ll approve some treatments, tests or doctor visits. For some, like Lewis, it can lead to delays in lifesaving care.
Some lawmakers from the North Carolina House of Representatives gathered Jan. 28 with members of the NC Medical Society to push for reforming the process to rein in the use of prior authorization and lessen the burden on providers.
But no sooner had those House lawmakers raised the issue, than two bills filed in the North Carolina Senate and House offered a retort. The new companion bills would make enacting reforms to prior authorization more difficult by discouraging government mandates on insurance companies.
The proposed legislation defines health benefit mandates as certain regulations on health insurance plans, including things like requiring coverage for hearing aids and prescription contraceptive drugs or devices. The bills would make it so that regulating cost-control processes like prior authorization would be considered a mandate.
Rep. Donny Lambeth (R-Winston-Salem), who co-sponsored the House version, said House Bill 46 could actually work in tandem with prior authorization reforms toward the overall goal of lowering health care costs.
“We have an opportunity to actually work with the provider community, to look for ways that we can either incentivize or help them focus on areas to reduce cost,” he said.
Who’s affected
The bill would require any future government mandates on health benefit plans that become effective on or after July 1, 2025 to also apply to the State Health Plan — in effect raising the stakes for those decisions.
And if a new government mandate on health benefits is passed into law, the bill requires that an existing one would have to be repealed.
Some of the existing regulations on health benefit plans — that also apply to the State Health Plan — require insurers to make claim payments promptly and to provide insurance identification cards.
If the legislation passes, changes would apply to those in North Carolina who have individual policies and some of those who buy insurance as part of a group. The State Health Plan – which covers about 750,000 state employees and their family members – would also be affected if new mandates are passed.
Excepted from the bill are so-called “self-funded” insurance plans that are typically offered by large companies and governed by federal laws. Employers who offer these plans collect the premiums themselves and pay claims; any insurance company involved is simply the administrator for the companies’ plans. Employees at large companies such as IBM, Wells Fargo, Walmart and even hospital systems like Duke University are usually covered by these self-funded plans.
Nearly half of North Carolina’s population is covered by employer-sponsored insurance, according to 2022 data from the Georgetown University Center on Health Insurance Reforms. For private businesses with 50 or more employees and offering health insurance, over 66 percent self-fund at least one health plan.
The Senate version of the bill to limit mandates, Senate Bill 24, easily passed two committees on Feb. 5. The House version has yet to have any meaningful movement.
Support for the bill
A recent report in Forbes claimed that North Carolina has the highest health care costs in the nation, based on metrics that include having the highest average premium for residents with “plus-one” health insurance coverage through an employer. Meanwhile, the state only ranked as the 30th healthiest state in the nation in 2022.
That’s “unacceptable,” said Sen. Jim Burgin (R-Angier) during the Senate Health Care committee meeting Feb. 5.
Senate Bill 24 will try to prevent additional health care costs by discouraging future requirements on plans that could drive higher premiums, he said.
Several business representatives spoke at the meeting in support of the bill. Gregg Thompson, state director of the national advocacy organization National Federation of Independent Business, said that every time an insurance mandate is passed, it increases costs to employers.
The State Treasurer’s Office, which manages the State Health Plan, was also supportive of the measure. Thomas Friedman, who runs the plan, said the plan faces a $500 million deficit this year.
“[SB24] helps to address one of the root causes for health care inflation — unfunded mandates that can unnecessarily add to cost,” State Treasurer Brad Briner said in a statement. “We are happy to support this worthy effort to begin the process to get health care cost growth in line.”
The North Carolina Association of Health Plans, an industry group, also came out in favor. Executive Director Peter Daniel claimed at the committee hearing that decades of mandates have “hamstrung insurers’ ability to contain costs.”
“Costs increase every time the government passes a law ordering insurers to cover a certain procedure or banning insurers from using cost saving tools,” he said.
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Meat cleaver or scalpel?
Other interest groups raised concerns about the effects on providers. Anthony Solari, lobbyist for the North Carolina Association of Pharmacists, said while he applauded lawmakers for this effort, the bill could hamper independent pharmacists’ ability to negotiate payments.
Solari asked lawmakers to be aware of any “unintended consequences” of the bill.
“Don’t use a meat cleaver when a scalpel will do,” he said.
New Republican Rep. Grant Campbell (R-Concord) — a long practicing physician — voiced support for reforming prior authorization. He said he’s concerned that requiring future mandates to repeal existing requirements could lead to necessary medical services not being covered, something which he said seemed “arbitrary.”
“Just because you’re adding something to be covered doesn’t mean that there’s a medical service that definitely doesn’t help anymore,” he said.
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