Aetna meeting with state employees as State Health Plan contract fight, transition, continues

The incoming administrator for the North Carolina State Health Plan, which serves about 700,000 state employees, teachers, retirees and their families, is meeting with employee groups ahead of a planned 2025 transition.

That transition isn’t guaranteed. Blue Cross and Blue Shield of North Carolina, which held this administrator contract for more than 40 years, has sued over the contracting process, saying it could have handled this project better and cheaper than Aetna, which won the multibillion-dollar contract last year.

The case may take months to play out, and Aetna executives say they’ve already put 500 hours into transition preparation. They held a virtual town hall last week with the North Carolina Association of Educators, which represents teachers, and more meetings are planned.

Aetna state president Jim Bostian gave a short presentation Wednesday to the plan’s Board of Trustees, promising careful attention, a focus on holding down prices and a robust network that should let employees to keep their doctors.

Blue Cross has said in multiple filings that it has the larger provider network in North Carolina, but Aetna says it analyzed a year’s worth of State Health Plan claims and that 98% of them came from providers already in Aetna’s network. Bostian said Aetna’s network includes every acute care hospital in North Carolina and that the company is “absolutely committed” to adding providers, particularly if they serve state employees now.

Many employees are taking a wait-and-see approach to the transition.

“We haven’t heard much of anything from members,” State Employees Association of North Carolina spokesman Jonathan Owens said Wednesday. “We’ve put it out on our social media accounts and in our publications and really haven’t gotten much feedback.”

North Carolina Association of Educators spokeswoman Sarah Garfinkel said her group appreciated last week’s meeting with Aetna, but it’s too soon to analyze the company’s impact.

“Obviously we’re two years out,” she said. “It’s going to depend on how they manage this transition.”

State Treasurer Dale Folwell, who chairs the health plan's board and whose office oversees the plan, has said repeatedly that employees likely won't see significant changes, other than improvements. He has also promised to keep costs down, adding that he’s hoping to lower family premiums in coming years.

The board votes on health plan details annually and is expected to decide any changes for 2024 in the fall. Changes that would affect the plan under Aetna’s management wouldn’t be decided until the fall of 2024. Folwell’s office has likened that shift to changing the transmission in a vehicle, not the engine.

“We’re not going to change the benefits or change the plan,” Sam Watts, the state health plan’s interim administrator under Folwell, said during Wednesday’s Board of Trustees meeting.

“No room for error,” Folwell, a Republican who is mulling a 2024 run for governor, said to Bostian, who was in the room.

“That’s right,” Bostian replied. “We got that one, loud and clear.”