3 Keys to Improving Healthcare in North Carolina

On Wednesday, April 26, the North Carolina Center for Health and Democracy hosted an in-person and livestream discussion panel on the state of health care in North Carolina. Wendell Potter, a former health insurance executive, New York Times bestselling author and payer reform advocate, has released a new white paper, How to Solve Health Care in North Carolina. And he led a panel discussion with Dr. David McLennan, head of Meredith polling. Discussions took place at Meredith University and covered topics such as consumer sentiment regarding health care in North Carolina, current legislative proposals, and potential solutions.

The U.S. health care system faces significant challenges, including a lack of insurance competition, a lack of government accountability for health insurers, and increased regulatory collections from insurers. During a panel discussion, Dr. McLennan and Potter shared some solutions to these persistent problems facing not only North Carolina, but the entire nation.

North Carolina needs more health insurance competition.

One of the first steps in solving North Carolina’s health care problem is to diversify health insurance options. Blue Cross Blue Shield of North Carolina (BCBSNC), one of four companies offering health insurance for small groups in North Carolina, is the state’s largest health insurance provider. BCBSNC holds a 97% market share in private insurance, according to Healthcare Insider data. Competition continues to dwindle each year, with North Carolina’s health insurers down 35% from 31 to 11 since 2011.
In a Meredith poll conducted by Dr. McLennan in the fall of 2022, more than 42% of those surveyed said their current private health insurance provider was the only option offered by their employer. During a panel discussion, Dr. McLennan encouraged employers to diversify the number of health insurance options they offer their employees. With fewer options, consumers are more dissatisfied with health insurance plans, he said. Therefore, giving employees more choice can improve employee retention and satisfaction.

Lack of competition among health insurers is one of the main reasons for higher premiums, Potter said. Both BCBSNC and Wellcare of North Carolina are available in over 100 counties in North Carolina, but BCBSNC is some of the most expensive counties at $628/month and Wellcare at $925.21. More competition among health insurers should lead to lower medical prices, he argues. During a panel discussion, Mr. Potter said that in terms of reforming or changing the current model, it is the impact of competition that the state legislature should focus on to benefit patients as well as health insurers. “We need to think not what’s best for Blue Cross, but what’s best for patients here in North Carolina. Legislators should consider what they can do to increase patient numbers.” [competition]said Potter.

The North Carolina legislature and governor need to set standards for health insurance companies.

BCBSNC has submitted a bill to the North Carolina Legislature to transfer its assets to a new nonprofit holding company that will operate without the regulatory restrictions normally imposed by state law. BCBSNC currently holds $7.7 billion in assets, including $4.5 billion in reserves, according to an article in NC Health News. The bill would allow health insurance executives to transfer some of their $4.5 billion in policyholder reserves to holding companies.

The bill is an attempt to circumvent North Carolina regulation by moving BCBSNC from a designated hospital services company to a holding company with less regulatory burden. At the same time, the bill would likely allow health insurers to continue to dominate the market in North Carolina.

Some state legislators have voiced their opposition to the bill. For example, North Carolina Insurance Commissioner Mike Cozy recently said the bill was a bad idea because it would deregulate the company. After a recent news event, Cozy stood in front of a screen that read, “This bill is about corporate greed.”

During a panel discussion, Potter and Dr. McLennan said the BCBSNC bill should refocus the legislature’s priorities on access to patients and care in North Carolina, rather than maintaining market share or making ends meet. It shows that there is something shared. More, not less, transparency is needed to ensure that health insurance premiums and revenues help people, not profits.

Health insurers need to lobby for reform.

During a panel discussion, Potter spoke about a term he called “regulatory capture,” a revolving door between health insurers and regulators. It is not uncommon for health insurance leaders to leave the industry and become state insurance commissioners or serve as representatives of insurance commission associations.

This type of move isn’t unique to the health care industry, but it should be something state legislatures and governors would consider regarding the appointment of health insurance commissioners. Potter also said most health insurers are very active when it comes to donating to political campaigns, political action committees, and helping promote members of Congress who they think should be in power. This will give it more influence within the market, he said.

Consolidation related to competition is also a key concern. During the event, Potter noted that horizontal consolidation, where large insurers buy smaller health insurers and expand into the health services sector, is more common. In fact, the biggest employer of doctors isn’t hospitals or the health system, but rather Optum, a subsidiary of the UnitedHealth Group with more than 80,000 doctors. Determining whether health insurance companies are trying to direct patients to designated preferred providers rather than hospital providers given their significant role as employers and providers of outpatient services To that end, more needs to be done.

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