Why North Carolina unanimously chose Aetna over BCBS

Cost savings and more price transparency were cited as reasons why North Carolina ended a 40-year relationship with Blue Cross Blue Shield and chose Aetna to administer employee health benefits.

Starting in 2025, Aetna will take over a three-year initial contract for more than 740,000 North Carolina state employees, retirees and their dependents. The contract can be extended up to five years total and includes healthcare spending of more than $17.5 billion over five years.

The 10-member state board that oversees the plan voted unanimously Dec. 14 to switch administrators, State Treasurer Dale Folwell told The Charlotte News & Observer. Aetna was one of three companies to bid for the state's health plan. BCBS and UMR (UnitedHealthcare) lost out.  

"We think based on how these scores came out, we're very comfortable with the potential of partnering with Aetna, so that we can get health care transparency, hopefully higher quality, higher access and lower costs for health care," Mr. Folwell told the newspaper.

The treasurer said BCBS realizes "that they've had this business for a long period of time. And that this bid will come back up in three to five years from now. So our hope is that Blue Cross Blue Shield will look at the process of bidding on this contract, and will possibly learn some things from it."

The new contract could save the state up to $140 million in administrative costs. The state expects a $4.2 billion budget shortfall for the plan because of rising care costs over the next few years.

Representatives for BCBS North Carolina said in a statement shared with Becker's Jan. 4 that the company is "deeply disappointed" in the state's decision and plans to appeal. 

"This is a consequential decision that will impact more than 580,000 State Health Plan members and threatens North Carolina jobs," the company said. "Blue Cross NC is pursuing a formal appeal and seeking more information through a public records request to ensure the best outcome for North Carolina and all State Health Plan members."

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