Aetna says it's ready to run State Health Plan

Aetna declared Thursday its readiness for the Jan. 1 launch as the third-party administrator of the State Health Plan.

The SHP is North Carolina's largest purchaser of medical and pharmaceutical services. It covers nearly 740,000 teachers, state employees, legislators, retirees and their dependents. The treasurer's office oversees SHP.

In December 2022, state Treasurer Dale Folwell disclosed the awarding of the three-year contract to Aetna. The contract has a renewal option for two, one-year terms.

The treasurer's office said the administrative contract oversees health care spending of more than $17.5 billion over five years.

Folwell said he has sent a demand letter to Blue Cross NC president Tunde Sotunde seeking more than $2 million for legal expenses the treasurer's office incurred while defending against a Blue Cross lawsuit.

Folwell accused Sotunde of throwing an unwarranted "legal tantrum," instead of taking responsibility for shortcomings in Blue Cross' proposal. He also accused Sotunde of performing "inventive legal gymnastics," rather than improving services to win back the contract.

Blue Cross Blue Shield of NC confirmed in July it would not appeal a state Administrative Hearings judge's decision to uphold the State Health Plan's decision to select Aetna. Blue Cross NC has held the administrative contract with the SHP since the early 1980s.

"This will be the State Health Plan's first transition to a new administrator in four decades, so we recognize some situations will require particular attention and support," said Mike Driscoll, a vice president at Aetna.

Aetna said it has completed testing on its twoyear, $50 million customized buildout for SHP that covered its ability to handle its technical demands.

Aetna said it has made SHP enhancements that feature claims processing, as well as "a robust member portal allowing users to securely access notes and other information related to their care."

As part of the adjustments, Aetna opened in August an SHP-specific service center at its High Point operations.

Aetna said that standard testing procedures use mock member and claims files.

"But for the State Health Plan, Aetna deployed the actual member file and actual claims data to add yet more robustness to endto-end testing," the insurer said.

Although open enrollment for 2025 ended Oct. 25, Aetna and SHP said they will make exceptions for those impacted in western North Carolina by Hurricane Helene who want to change their plan.

Both SHP officials and Folwell have said the third-party administrator request for proposal process was conducted within the parameters of "rapidly increasing health-care costs, funding that has not increased at the same rate, and the aging and declining health of the Plan member pool (due in part to the inability to attract young and healthy dependents into the Plan because of high family premiums)."

They said because the SHP is facing a $4.2 billion funding gap over the next five years, "this is an existential threat to the Plan."

"The treasurer and the SHP board have made it the Plan's explicit policy to cap or reduce the Plan's costs and implement strategic initiatives that will enable the Plan to lower dependent premiums to attract younger, healthier members to the Plan."