State Health Plan Shifts Coverage Tiers to Address Budget Deficit
Starting in 2027, the State Health Plan will implement a new three-tiered provider system that significantly increases out-of-pocket costs for members who use non-preferred facilities, including WakeMed. This policy change, designed to manage a budget deficit reaching hundreds of millions of dollars, will force approximately 750,000 plan members to weigh their provider choices against potential annual cost increases of up to $10,000.
The New Three-Tiered Provider Structure
The State Health Plan is moving to a model that categorizes hospitals and doctors into “preferred,” “access,” and “non-preferred” tiers. According to State Health Plan Director Thomas Friedman, the initiative aims to steer patients toward providers that offer the state more competitive rates.
* Preferred Providers: UNC Health and Novant. Members using these facilities will see discounted deductibles and lower out-of-pocket maximums.
* Access Providers: Duke Health. This tier serves as a middle ground for members seeking care within the network.
* Non-Preferred Providers: WakeMed and Atrium Health. Members choosing these facilities will face the highest deductibles and out-of-pocket expenses under the new plan rules.
State Treasurer Brad Briner, who runs the plan, noted that these designations were based on the bids submitted by hospital systems, the quality of care provided, and the number of facilities operated by each entity.
Financial Impact on State Employees and Retirees
The cost shift is substantial for families and individuals who rely on the plan for routine and specialized care. According to plan data, an individual on the standard plan currently faces an out-of-pocket maximum of $6,500. By 2027, that maximum will drop to $4,000 for those using preferred providers but will climb to $12,000 for those opting for non-preferred care.
For family coverage on the “plus” plan, the financial stakes are even higher. The current $10,000 out-of-pocket maximum will shift to $9,000 for preferred providers, but will escalate to $20,000 for families who continue to utilize non-preferred facilities like WakeMed.
> Did You Know?
> Emergency room visits are exempt from the new tiering system, meaning they will be billed as “access” tier services regardless of which hospital a patient visits.
Exceptions and Protections for Vulnerable Patients
State officials have included specific safeguards to prevent immediate disruption for patients with complex medical needs. For at least the first year of the program, the new tier system will not apply to:
* Maternity care for pregnant women.
* New families with children in neonatal intensive care.
* Cancer patients.
* Transplant patients.
Friedman emphasized that the state is not forcing members to switch doctors, but rather changing the financial incentives associated with those choices. “You are going to pay more,” Friedman said during a recent briefing. “It’s going to cost more, but we’re not going to take that option away from you.”
Strategic Shifts in Hospital Partnerships
The decision to designate Duke Health as an “access” provider while placing WakeMed in the “non-preferred” category marks a major shift in Triangle healthcare economics. Duke Health chief executive David Zaas stated that the organization is pleased to maintain access for state employees, noting that the agreement balances quality with affordability.
Conversely, UNC Health has begun preparing for an influx of new patients. Chief executive Cristy Page indicated that the system is already hiring additional staff and expanding technological capabilities to ensure they can manage the increased volume without extending wait times for current or new patients.
Pro Tip: State employees who rely on specialists at non-preferred facilities should monitor official communication from the State Health Plan. Because billing can become complex when mixing provider tiers, reviewing your specific plan documents is essential before the 2027 rollout.
Frequently Asked Questions
Will I be forced to change my primary care doctor?
No. You may continue to see your current doctor, but if they are affiliated with a non-preferred system, you will likely face higher out-of-pocket costs for your visits starting in 2027.
Does this change affect my private insurance?
No. This tier system applies exclusively to the 750,000 members of the State Health Plan. It does not impact those covered by Medicare, Medicaid, the Affordable Care Act, or private employer-sponsored plans.
What happens if I need emergency care?
Emergency room visits are treated as “access” tier services regardless of the hospital’s status, meaning you will not be penalized for seeking emergency care at a non-preferred facility.
How long will these provider tiers remain in effect?
State officials indicate the current tiers will likely remain in place for several years to provide stability, though they remain open to new bids from hospital systems that may wish to compete for preferred status in the future.
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