The State Health Plan and Atrium Health have ended their three-month standoff.

Under the new multiyear contract, members can keep seeing Atrium doctors in 2027 at about the same out-of-pocket cost they pay now. All Atrium hospitals and physicians move into the plan’s middle Access tier, Atrium drops its Affordability Protection Program, and the plan withdraws its lawsuit.

How we got here

In July, Atrium was placed in the plan’s most expensive tier after a yearlong bidding process. In October, Atrium offered to cut members’ out-of-pocket costs while still billing the plan at its higher rates. Treasurer Brad Briner sued, lost his bid to block the program, and moved most Atrium providers out of network. Within days, Atrium came back with discounts the plan called “materially better” than earlier offers.

The plan’s finances

The deal does not fix the plan’s cash problem. At the end of September, the plan had less than $300 million in reserves, and major savings from the new tiers aren’t expected until March or April 2027. Executive Administrator Tom Friedman warned the plan could run out of money in two to three months.

On Tuesday, the board voted unanimously to temporarily double the monthly payment the plan receives from the Retiree Health Benefit Fund, from $300 to $600 per retiree, raising about $415 million before year’s end. The payment drops to $378 in January. The plan must repay the money with interest and will work out a schedule to do so as early as possible. The plan borrowed about $85 million from the fund three years ago and repaid it.

SEANC’s response

SEANC Executive Director Ardis Watkins issued the following statement:

“We thank State Treasurer Brad Briner for remaining steadfast in his position to protect the financial viability of the State Health Plan and to shield future members from unnecessary increases in health care costs. His focus on long-term sustainability reflects a commitment to responsible governance and to the many public servants and families who rely on the Plan.

“We are equally grateful to Atrium Health for its willingness to develop and present a thoughtful proposal that addresses key concerns regarding cost for all State Health Plan members.”

Open enrollment ends Nov. 6

Atrium is in-network, but the preferred tier (Novant Health, UNC Health, Iredell Health and 4,500 independent providers) can save members thousands of dollars. Check which tier your doctors are in before you choose your 2027 plan.