Good Deeds Rarely Go Unpunished

In late February, H.R. 184 was introduced into the North Carolina House of Representatives. In early April, H.R. 184 made it to the North Carolina Senate where it was referred to the Committee On Rules and Operations of the Senate. There it sits. It’s a bad bill, catering to special interests, and need to die there.

So exactly what is H.R. 184? On April 4, 2019, Raynor James wrote an article describing the debate in the North Carolina House of Representatives over H.R. 184. In her article Raynor explained that H.R. 184 would tie the hands of State Treasurer Dale Folwell in dealing with the rapidly growing problems with the State Health Plan.

An article in The Daily Haymaker on March 26 explains some of what is going on:

Former state representative Dale Folwell (R) worked wonders in cleaning up the highly FUBAR-ed unemployment insurance system. You would think it would be a no-brainer to put him on fixing that money-bleeding nightmare known as the state health plan. (The plan made it to its current sorry state in no small part to the micro-managing mischief by legislators in both parties who saw it as their own personal piggy-bank and slush fund.)

So, along comes Dale Folwell trying to do exactly what the legislature empowered the state treasurer’s office to do years ago:  competently manage the state health plan.  Folwell decided taxpayers needed to understand exactly what  health care providers were billing the health plan FOR.

This did not sit well with the folks at the hospitals and clinics sending in those fat, vague, non-specific bills.  Armies of lobbyists were dispatched to spend dark money on ads smearing Folwell and his pricing transparency plan.  A lot of politician pockets were lined.  A bill got drafted (with a lot of lobbyist, um. “help”)  that tied Folwell’s hands on exactly what he could to in regard to the state health plan.

The bill, H184, got its first hearing in the House Health Committee today.  Conveniently, there was NO roll call vote on this expensive legislation — with a total cost over 3 years of $400 to 600 MILLION. 

The bill did get amended.  The time frame for the “study” on  changing the health plan was shortened. The state employees — who stand to be affected the most by this bill — got their representation on the “study committee” expanded from ONE to TWO.  (Isn’t that nice?)    And the whole package is still going to cost the taxpayers an additional $241 MILLION.

The article then explains the problem:

There was no real good reason to do this. It went against one of the alleged core principles of the majority party. The prime beneficiaries of the state health plan — the state employees — appear to be solidly behind what Folwell is doing. Taxpayers — seeking to avoid a $400-600 MILLION hit from doing NOTHING and “studying” the idea of reform — appear to be all for it.

But the deep-pocketed lobbyists who are so kind and compassionate to campaign accounts all over Jones Street were not happy and HAD to be mollified.

Some Republicans are fighting back. There was a Resolution at the North Carolina Third District Republican Convention today that backed Dale Folwell and his efforts to clean up the State Health Plan. The Resolution passed easily.

The Resolution included the following:

In 2008, expenses for the North Carolina State Health Plan were roughly $2.2 billion; today they are roughly $3.4 billion. Medical and pharmaceutical costs are increasing five to nine percent annually and current spending projections estimate that the plan will be insolvent by 2023 unless action is taken. The campaign to fix the state healthcare plan is opposed mainly by special interests–hospitals and those who profit by the inefficiency and inflated costs of medical care under the current system.

I was told that the bill would probably die in committee. I hope that happens. However, the fact that saving taxpayer money was opposed by special interest groups should not come as a shock to any of us. That fact underlines the need for citizens to stay aware of what our legislature is doing. North Carolina is in a strong position economically–it is a place where businesses relocate. If our State Health Plan is not brought under control, our taxes will increases to cover the cost of the program and we will be much less attractive to businesses looking for a place to be.

Bad Day at Black Rock

Below is a guest post by Raynor James, an eastern North Carolina resident who has followed the debate on North Carolina House Bill 184 very closely:

Tuesday, April 3rd was a sad day in the North Carolina House of Representatives.

Let me tell you about it. Dale Folwell is North Carolina’s Treasurer. He’s a very popular fellow for all the right reasons. He did a good job when he served in the North Carolina General Assembly. He got North Carolina’s unemployment insurance out of debt to the Federal Government when he served in Governor McCrory’s administration, an accomplishment that continues to save North Carolina’s employers significant sums annually. He’s known as a problem solver.

North Carolina’s State Health Plan (which pays for medical expenses of current and retired state employees) is seriously underfunded and is projected to be bankrupt by the year 2023.When Dale Folwell was elected Treasurer, many who voted for him expected him to solve the Plan’s problems as its administration was in the Treasurer’s portfolio.

Enter HB-184 which if implemented will tie the Treasurer’s hands and not allow corrective action to be taken while a committee studies the situation.

HB-184 was debated on the floor of the House April 3rd. Let’s look in on how some conservative House members tried to kill the bill.

First, Representative Michael Speciale offered two amendments to the bill. Representative Speciale’s first amendment would give the Treasurer a vote on the study committee and would make it impossible to expand the size of the committee (something that is sometimes done when the “powers that be”don’t like the direction a committee seems to be taking).

That amendment passed by a vote of 106 to 5.

Representative Speciale’s second amendment would remove Section 2 from the bill. Section 2 requires that Blue Cross-Blue Shield continue to be used during the study period.

It also prevents the Treasurer from switching the Plan to using referenced based pricing for medical services to the Plan during the study period.That amendment failed by a vote of 88 to 23.

During debate on HB-184 itself, Representative Larry Pittman cited a memo from the Plan’s Board of Trustees that projects that the plan will be out of money in 2023, and said that we can’t wait on a two year study. He talked about how hospital groups were groaning about how burdensome the Treasurer’s planed payment changes would be on them [tie pricing of medical services to 172% of the average Medicare pays for the same service], and pointed out how well funded many hospitals are. In support of his assertion, Representative Pittman mentioned that the hospital at East Carolina has given $10 million dollars to fund a stadium.

Representative Pittman asked that members not pass the bill and added that when Treasurer Folwell had requested info from the hospital groups, they had sent him the schedules he asked for with page after page blacked out. “They might as well have slapped him in the face and spit on him,” Representative Pittman said.

He continued by saying passage of the bill would hurt both members of the Plan and taxpayers who pay the freight and pointed out that members of the Plan are also taxpayers, so they get hit two ways.

He stated that Dale Folwell is “competent” and “honest” and renewed his request by saying, “Defeat this bill.” Representative Michael Speciale said, “We’re told that if we don’t pass this bill, the sky will fall; we’ll lose our rural hospitals.” He went on to say that they’d heard the same thing when he was trying to get rid of the CON [Certificate of Need] laws [which did not pass] and shortly thereafter they closed one of the hospitals in my district.”

“I hear fake news ads” [on the topic of rural hospitals closing if HB-184 doesn’t pass] when I drive in my district.”

Representative Speciale went on to say that Dale Folwell got the people together who are opposing him [mainly large hospital groups] and asked how much waste, fraud, and abuse there is in the system. The answers they give him ran from 12% to 25%, so he took a middle number and asked them to figure out how they could reduce costs by 15% and said that they needed to get together again as soon as that was done.

After that meeting, Treasurer Folwell tried to set follow up meetings, and time after time he was stonewalled.

Representative Speciale continued, “Now we’re faced with $33 to $36 billion dollars in unfunded liabilities. If we don’t allow him to cut costs, how are we going to cut costs because it’ll be on us!”

“Dale Folwell has increased what would be going into rural hospitals. He’s compromised, but they won’t budge an inch.If we do not pass this bill, then the hospital lobby will sit down and talk to him. Let the state Treasurer do what he was elected to do. Throw the politics aside and vote NO!

Representative Keith Kidwell said, “For the last 10 years, health care costs have gone up and up. We asked Treasurer Folwell to handle it. Let’s not bobble him,or we’ll be faced with taking $235 million to $509 million [dollars] from the general fund to deal with the problem AND $1.1 billion will be added to the unfunded liability.”

“HB-184 will cost us a ton of money!” “Cut through partisanship and look at the numbers! We HAVE to block this bill!’

In spite of those eloquent pleas and others, too, HB-184 passed 75 to 36, and it will now be sent to the North Carolina Senate where it is hoped that wiser voices will prevail.

If you’d like to hear the whole debate, you can go to the NC General Assembly website at which NC House sessions are archived.

Thank you, Raynor. This is a picture of what is going on in the North Carolina state legislature. President Eisenhower warned about the military-industrial complex. What we see here is the result of intense lobbying by the healthcare-industrial complex. We need to stop this bill.