NC State Health Plan won’t extend Aetna or CVS contracts, will seek bids instead

It’s been 14 months since North Carolina switched nearly 500,000 state employees, dependents and retirees to a new health insurance administrator.

And now, in year two of a three-year contract with Aetna, the State Health Plan is poised to issue a new request for proposals — or an invitation for vendors to submit bids to take over administration of the plan in 2028.

That’s despite the contract with Aetna having an optional two-year extension.

The plan will issue a new request for proposals in late March for a contract effective Jan. 1, 2028, according to an email sent to The News & Observer by Loretta Boniti, spokesperson for the state treasurer’s office, and attributed to State Health Plan staff. The plan, with oversight from the treasurer’s office, provides health insurance to active state employees, dependents, and retirees.

Asked why the SHP was pursuing this route instead of extending the Aetna contract — as was done numerous times for Blue Cross NC when it served as the third-party administrator for more than 40 years — Boniti provided a statement attributed to plan staff, who said: “This administration has different priorities and would prefer a contract that is more in line with those priorities.”

Phillip Blando, a spokesperson for Aetna parent company CVS Health, called requests for proposals “a routine part of the state’s procurement process.”

“We are proud to serve the members of the North Carolina State Health Plan,” Blando said. “Over many years, Aetna has worked diligently to support communities across the state and improve health outcomes for members while containing costs in one of the most expensive health care markets in the country.”

Blando said the company does not “comment on or speculate about potential participation in future bids, particularly prior to the release of an RFP.”

The State Health Plan has a variety of contracts for services. One of those contracts is for the administration of health benefits. That job, held by Aetna, includes issuing cards, processing claims, setting up technological systems and more. Aetna also establishes contracts with a network of providers and negotiates the prices paid to them for health care services. The administrator then sends claims to the state, which is on the hook for covering health care costs.

In 2023, then-State Treasurer Dale Folwell told The N&O that the decision to move from Blue Cross NC to Aetna came in a unanimous vote during a closed-session board meeting by the health plan’s board of trustees in mid-December 2022. That meeting, as well as much of the process in 2022, came during a “silent” period, meaning that board members, Folwell and others involved had to sign nondisclosure agreements and could not discuss details of the contract, Folwell told The N&O at the time.

Before the vote occurred, there was a bidding process that drew bids from Aetna, Blue Cross NC and UMR, a subsidiary of UnitedHealthcare. Aetna won that bid, having scored the highest. Folwell said then that the decision to open a bid came due to concerns with transparency and added that the State Health Plan was facing significant financial challenges.

Treasurer Brad Briner, who like Folwell is a Republican, took office in 2025 at the beginning of the Aetna contract. He has taken several actions to address financial challenges under the plan, including raising health premiums and making plan design changes, cutting the use of prior authorization for several health procedures, and beginning implementation of a new preferred provider system that seeks to set contracts with providers with more cost transparency. In turn, members who go to these providers pay lower co-pays.

The decision to award the contract to Aetna prompted a complaint filed in mid-February 2024 by Blue Cross NC with the North Carolina Office of Administrative Hearings against the SHP and Aetna. The state and Aetna ultimately won after a judge ruled the contract had been awarded fairly.

SHP spokesperson Dan Way previously told The N&O that as of May 2024, the SHP had spent about $1.9 million on the OAH case.

Following an interview request by The N&O on the upcoming RFP, Boniti said that “at this time, we are not doing interviews about this,” but that after selections were made, that could be facilitated. Asked further about this, Boniti said that as the request for bids will be posted soon, “we made the decision not to do any media surrounding it until after the evaluation is complete.”

Another contract the SHP has is for pharmacy benefits. CVS Caremark — which, like Aetna, is owned by CVS Health — is the plan’s current pharmacy benefit manager, which processes pharmacy claims. The PBM pays the pharmacy, and the plan reimburses the PBM.

The State Health Plan issued a request for proposals las month for that contract and is currently in the “silent period,” said Boniti. She said that restricts staff from discussing the procurement and that confidentiality during an evaluation is a standard practice as outlined in the North Carolina Procurement Manual.

That contract would be effective Jan. 1, 2028, as well.

CVS Caremark has been the plan’s PBM since 2017.

In June 2025, the SHP said in a news release it has reached an “untenable impasse” with CVS Caremark, accusing the company of refusing to honor its current contract. It accused the plan of not paying tens of millions of dollars in rebates — post-sale discounts negotiated with drug manufacturers — since 2023, and trying to rewrite the contract to boost its profits. Caremark, through spokesperson Shelly Bendit, said at the time that the company “has, and is committed to delivering on its contractual promises” to the plan, The N&O reported.

In October 2025, the SHP announced that it had reached an agreement with CVS Caremark.

Asked what is being sought with both new requests for proposals, Boniti said “the Plan is seeking partners who support the alignment of incentives between members, providers, and the Plan. Future partners will assist us with improving health, delivering an excellent member and provider experience while fostering financial sustainability.”

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