How North Carolina is fixing its $5.5B state employee health plan | Tom Friedman (NC State Health Plan)

Tom Friedman became executive director of the North Carolina State Employee Health Plan in January 2025, covering the plan’s 775,000 active and retired members and its 55-person team managing $5.5B in spend. Friedman says the plan faced major projected deficits ($500M in 2026 and $1.4B in 2027) after years without premium or benefit changes, depleted reserves, and limited population health investment, with about 70% of members having chronic conditions. 

He describes ending the Clear Pricing Project, arguing it raised costs despite showing members are highly price sensitive. The plan is boosting independent/rural primary care via networks paid ~160% of Medicare with reduced administrative burdens and shared savings, and is using Lantern to offer select elective surgeries at $0 member cost by shifting to much lower negotiated rates; 400 surgeries were completed with ~1,900 in the pipeline. Financially, projections improved toward a ~$450–$460M positive stabilization rate next year, with plans to expand “preferred provider” incentives across services.

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