North Carolina's State Health Plan trustees signed off June 5 on a sweeping package of changes that could alter what hundreds of thousands of public workers and retirees pay for care, and where they get it. The board approved a long-range strategy, greenlit a Medicare Advantage overhaul it says will shave tens of millions from the Plan's costs, pushed forward a surgical steering network, and launched a grocery benefit pilot aimed at chronic disease.
Board approves strategic plan and Medicare changes
According to the N.C. Department of State Treasurer, trustees unanimously adopted the State Health Plan's 2026–2032 Strategic Plan and approved changes to the Humana Medicare Advantage benefits for 2027. The treasurer’s office said those Medicare Advantage adjustments are projected to save the Plan roughly $31.5 million next year. Board members cast the moves as part of a broader effort to protect affordable premiums and stabilize benefits for more than three quarters of a million members.
Background: a half billion dollar shortfall
The drive for savings follows the Plan's struggle with a massive funding gap. Trustees were staring at an estimated $500 plus million shortfall that officials warned could threaten solvency without changes. As EdNC reported last year, the board moved to salary based premiums for 2026 and finalized those 2026 rates to shift more of the burden toward higher paid employees while offering relief to lower paid workers.
Lantern expansion and Eat Well pilot aim to lower costs
Board materials and the treasurer’s office highlighted Lantern, a surgery and specialty care navigation program, as a key cost savings tool. More than 1,000 members have already received zero dollar procedures through Lantern, generating about $12 million in savings, and the Lantern provider network has grown rapidly, the office said. The Plan also launched the Eat Well pilot on June 1, which offers an $80 monthly grocery benefit to 1,000 eligible members with certain cardiometabolic conditions, a preventive step leaders say could reduce costly hospital care in the future. Trustees argued these programs are designed to bend long term costs without simply shifting expenses onto all members.
What is next: provider tiers and upcoming votes
Trustees also advanced a multi tier provider model that would steer patients toward higher value, lower cost providers beginning in 2027 and voted to adjust Medicare Advantage pricing to help close next year's gap, as Carolina Journal reported. Final votes on 2027 premium rates, and decisions on the Plan’s third party administrator and pharmacy benefits manager, are scheduled for the July 10 board meeting. State Health Plan executive Thomas Friedman discussed the recent approvals on Spectrum News's Capital Tonight program.
Pushback from employees and educators
Employee advocates warned that even with new benefits, the broader package of changes will still squeeze take home pay and hurt recruitment. “People are hurting,” the State Employees Association of North Carolina’s executive director told WRAL. Educators' groups have likewise urged lawmakers to increase salaries rather than place more of the burden on workers. Trustees counter that the multi pronged strategy, which includes negotiating provider rates, redesigning benefits and running targeted pilots, is intended to spread the burden across providers, taxpayers and members.
Bottom line for members
The June 5 votes set the direction, but not the final bill. For now, members are looking at targeted programs and Medicare adjustments meant to cut costs, while concrete premium decisions are still pending. All eyes will be on the July 10 board meeting for final rate votes, and the Treasurer’s office is expected to send detailed enrollment and plan design information before the next open enrollment windows.
