Summary Proposal for the Establishment of the North Carolina

Public Health Plan

Section A. Administration
The North Carolina Public Health Plan (hereafter referred to as the NCPHP) would be
established as a division of the North Carolina Department of Health and Human Services under
the direct supervision of the Secretary of the Department.

Section B. Eligibility and Estimated Coverage

All residents of the State of North Carolina would be eligible for coverage under the NCPHP,
because of this eligibility, the maximum projected coverage under the NCPHP would be
5,762,000 (all projections henceforth use this maximum threshold).

Section C. Standards
The NCPHP would adopt coverage standards and requirements in accordance to those
established by the Patient Protection and Affordable Care Act, and all applicable federal and
state laws and regulations extending past the PPACA except where otherwise exempted.

Section D. Funding
Subsection 1. Funding from Section 1332
The NCPHP would apply for a Section 1332 waiver to the PPACA regarding Sections 1301, 1311,
1401, 1411, and 1412, while requesting pass-through funding. Pass-through funding from
exemptions to Sections 1401, 1411, and 1412 is estimated to amount to an annual sum of $3.96
billion, while pass-through funding from an exemption to Sections 1301 and 1311 is estimated
to amount to an annual sum of $63 million.

Subsection 2. Funding from State Insurance Contributions

The Government of the State of North Carolina would levy a payroll tax, payable by employers,
equal to the sum of 1% of all employee earnings. Annual funding from a State Insurance
Contribution would be $1.98 billion.

Subsection 3. Funding from Monthly Premiums

Those insured under the NCPHP would have 1% of all earnings made payable to the NCPHP in
the form of premiums, barring exemptions to be established by the NCPHP. Annual funding
from premiums would be $1.30 billion, with average monthly premiums being $18.75 per
person.

Subsection 4. Funding from Copayments

Those insured under the NCPHP would pay $5 in the form of a copayment for all medical
appointments barring those that involve specialists which would be charged at $20 per
appointment. Copayments for events requiring hospitalization, the use of emergency medical
services, etc. would be set by the NCPHP with no price exceeding 150% of that of a specialist
visit. Copayments for other medical services would be set by the NCPHP with care to ensure
accessible price points. Annual funding from copayments would be $614 million.

Subsection 5. Funding from Income Tax Surcharge

The Government of the State of North Carolina would raise the standard tax rate from 5.499%
to 5.75%. All $601 million received from this additional 0.251% tax on income would be
earmarked for the NCPHP.

Subsection 6. Funding from Tobacco Tax Surcharge

The Government of the State of North Carolina would raise the state tax on a pack of cigarettes
from 45c to $1.30. All $415 million received from this additional 85c tax on a pack of cigarettes
would be earmarked for the NCPHP.

Subsection 7. Overall Funding

Total funding for the NCPHP would be $8.93 billion, coming from the items listed from
Subsection 1 to Subsection 6.
 Projected f unding
Section 1332 State Ins ura nce Contri butions
Premi ums Co-payments
Income Tax Surcha rge Toba cco Surcharge

Section E. Spending
Subsection 1. Spending Relating to Medical Coverage
Annual per person spending on medical services would be $1,549, with overall annual medical
spending amounting to $8.92 billion.

Subsection 2. Other Spending

Spending regarding the administration of the NCPHP, as well as other miscellaneous NCPHP
spending, would be redirected from the existing General Fund.