New details made public about state employee health insurance switch. Could premiums go down?

State employees might see their health insurance premiums go down once the North Carolina State Health Plan switches to a new company, North Carolina Treasurer Dale Folwell told reporters Tuesday.

The leadership of the health plan voted late last year to change the plan from Blue Cross and Blue Shield of North Carolina to Aetna, starting in 2025.

Folwell has previously said the new contract could save the plan $140 million, and that he’d be “working closely with Aetna to create new ways to provide price transparency” — something he’s feuded over with BCBSNC for years, seeking more information on deals the company struck on the plan’s behalf with hospitals and medical groups.

Beyond that explanation, there have been few public details of exactly how the decision was ultimately made — until now.

On Tuesday, Folwell showed reporters parts of the formula the state used to weigh the contract bids for the health plan submitted by Blue Cross, Aetna and a third competitor, UnitedHealthcare.

His presentation showed that Blue Cross promised the lowest total cost, although Aetna was close enough that the two were formally considered tied for first place. Folwell added that, digging into the details, Blue Cross offered the better deal on administrative costs while Aetna offered the better deal on medical claims. And since claims are such a large percentage of the total costs, that went in Aetna’s favor, said both Folwell and the plan's interim leader, Sam Watts.

The lower costs means that the state might be able to lower its family premiums, Folwell said. The state has kept those frozen for several years despite rising health care costs, but he said that they’re still so expensive that very few people opt in. He hopes that will soon change.

“We are mathematically very sure that if we can ever not just freeze the family premium — which we have done for six years — but actually lower the family premium, that we’re going to be able to attract younger, healthier people to the plan to offset people my age, with my habits,” said Folwell, who is 64.

Another factor weighing against Blue Cross was a separate formula, the documents show, used to determine the insurance companies’ more practical capabilities.

Blue Cross had a near-perfect score but lost points on a few key measures — including customer service and nationwide reach. Aetna, on the other hand, had a perfect score.

Blue Cross has formally appealed the decision, saying the process was flawed.

A Blue Cross spokeswoman, Sara Lang, said in an email Tuesday that state officials are still keeping key details from the public — and that it will continue its legal fight to keep the contract.

“It is critical for the public to understand how costs and access to care for teachers and state employees will be impacted by the change,” she said. “We are disappointed that, despite our records requests in December, the [State Health Plan board] has not revealed key details on how it assigned scores to each vendor’s proposal.”

The company also says its in-network list of providers is substantially larger than Aetna’s. That raises questions of whether some state employees and their families will be forced to find new doctors if the changes go through.

Folwell said he would want to grow the list of in-network providers available to state employees no matter which company is in charge.

“We want our network to be expanded to be more robust,” Folwell said. “We want not only the quality of the health care, but, the access to health care, to increase. That’s the goal.”

Aetna disputes Blue Cross’ claim of a significantly larger network. It told state lawmakers in a letter recently that its own analysis shows that in 2021, whenever people on the plan submitted a claim via Blue Cross, 98% of those providers were also in-network with Aetna.

In that letter, sent to every state legislator, the company also encouraged them to help it identify any doctors or others that it should add to its network moving forward, to help state workers.

“If your office or a constituent identifies a provider currently accepted by BCBSNC but not by Aetna, my team will promptly reach out to that provider to begin the process of adding them, assuming the provider meets Aetna’s quality of care standards,” said the letter signed by Aetna’s state president, Jim Bostian.

The third company that bid for the contract, UnitedHealthcare, didn’t immediately respond to a request for comment. When it initially lost the contract to Aetna it did file a formal protest, but the state denied its complaints.