The North Carolina Department of State Treasurer touches the lives of one in 10 North Carolinians every month. We manage the 26th-largest pool of money in the world valued at more than $110 billion. We also have the responsibility for the state’s pension and health care plans. Next to their relationship with their family and their faith, we impact the things that people value the most — their money and their healthcare.
Our loyalty and fiduciary duty is to the partipants of these plans and to the taxpayers of this state. The DST, through the State Health Plan, provides Medicare-eligible retirees with Medicare Advantage health insurance. Recently, we were able to renegotiate our contract with UnitedHealthcare to freeze premiums for 2018.
We were able to achieve this despite the impact of the Affordable Care Act’s Health Insurance Tax, which was not assessed in 2017, but is scheduled to come back in 2018 if Congress does not act.
New data from actuarial firm Oliver Wyman shows that the return of the ACA’s HIT will cost North Carolina $366 million in additional premiums next year. If repealed, the state would save approximately $45 million in 2018 just with retired state employees.
The HIT is an Obamacare tax on health insurance premiums designed to help offset the cost of the tax credits for ACA exchange enrollees. Recognizing the negative impact the tax was having across the nation, Congress worked across the aisle in late 2015 to pass a bipartisan one-year moratorium on the tax for 2017, saving the health care system $21.4 billion.
But the clock is ticking on the end of our reprieve.
Republicans were expected to tackle the HIT through the repeal of the ACA. The House-approved measure to repeal and replace the failing law and the two main Senate bills all included provisions to end this irresponsible tax. But, unfortunately, congressional lawmakers weren’t able to pass the legislation.
We have an obligation to teachers, law enforcement officers, firefighters as well as other state and local retirees who served our state and now find that inaction by Congress could cost them dearly. Seniors, other than state retirees, in Medicare Advantage programs will see their premiums increase an average of $490 per couple next year. In North Carolina, premiums for Medicare Advantage plans would be 30 percent lower if Congress extends the moratorium on the tax.
Right now, Congress is considering legislation that will prevent this tax from being assessed in 2018. Congress needs to act quickly. We appreciate and look forward to the N.C. congressional delegation taking the lead.
Dale Folwell is the North Carolina State Treasurer.