Health insurance changes coming for state employees as multibillion-dollar state contract shifts
State Treasurer Dale Folwell said Wednesday that Aetna beat out Blue Cross and Blue Shield of North Carolina to manage the state health plan starting in 2025. BlueCross says it will appeal the decision.Posted — Updated
For the first time in four decades, a new company won the state contract to manage health insurance for more than 700,000 North Carolina state employees, teachers, retirees and their families, State Treasurer Dale Folwell said Wednesday.
Folwell said Aetna will take over the plan in 2025, replacing Blue Cross and Blue Shield of North Carolina, which has been the state’s third-party administrator for health insurance for more than 40 years. Aetna would manage billions annually in health insurance claims. Folwell’s office said the shift would bring $140 million in savings over the life of the deal.
The state health plan covers more than $17.5 billion in health care spending over five years. Folwell has often said it is the largest purchase of health care in the state.
BCBSNC said it won’t accept the change without a fight. Shortly after Folwell’s announcement, a BlueCross spokeswoman said the company will pursue a formal appeal, and that it’s “seeking more information through a public records request to ensure the best outcome for North Carolina and all state health plan members.”
“We are deeply disappointed by the state health plan’s decision,” spokeswoman Sara Lang said in a statement.
The state health plan is self-insured, relying on employee premiums and taxpayer funding. The Treasurer’s Office and a board of trustees oversee the plan, but BCBSNC runs day-to-day operations and cuts deals with hospitals and medical groups, setting the rates doctors and others are paid.
Folwell said in a statement Wednesday that he appreciates Blue Cross’ years of service and that company executives have assured him “they will finish strong for the next two years.”
He said Aetna will have a team of nearly 600 employees working on the transition and that plan members will get more information on the shift in 2024, ahead of open enrollment for the 2025 benefit year.
“A change of this magnitude is a great opportunity for a fresh perspective," Folwell said, "and we look forward to working closely with Aetna to create new ways to provide price transparency, increase access and quality while lowering the cost of health care."
Ardis Watkins, executive director of the State Employees Association of North Carolina, said her group would educate itself over the next two years on changes employees should expect. She said in a statement that the State Health Plan is at a crossroads and that "without significant savings" more costs will shift to employees who already struggle to afford plans that cover family members.
“State employees are always wary of change," Watkins said. "Rest assured, we will be representing our members’ concerns and will, of course, hold the State Health Plan accountable for making sure our members are heard. It has been our experience that the Plan’s leadership has the interests of state employees and retirees at heart.
"This change will save $140 million, which is a lot of money," Watkins said. "But bringing true price transparency and savings to what the plan pays out to hospitals is required to achieve the savings the plan needs to survive."
The contract runs from January 2025 through the end of 2027, with the option to renew for two one-year terms, Folwell’s office said. Other contract details weren’t immediately available. WRAL News has requested a copy of the new contract.
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