Judge dismisses Blue Cross’s claim that state unfairly chose Aetna to run health insurance plan

Insurance company Aetna will take over third-party management of North Carolina’s state health insurance plan in 2025 if a ruling by an administrative law judge on Monday stands.

About 750,000 state employees and retirees, as well as their families, receive health insurance through the state plan. For decades, the plan has been administered by Blue Cross Blue Shield of North Carolina.

The plan’s board voted last year to award the third-party management contract to Aetna starting in 2025. Blue Cross sued, saying the decision was made because of errors and an unfair rating process used by the state.

Administrative Judge Melissa Owens Lassiter said in a ruling Monday that Blue Cross had failed to prove its allegations.

“While we are disappointed by the court’s decision, we are pleased that the court addressed the serious issues we raised about the State Health Plan’s 2022 bidding process,” Blue Cross Blue Shield of North Carolina said in a statement. “State Health Plan members and the public deserved an independent review of the plan’s bidding process, which failed to select the bid with the lowest cost and broadest network.”

The company added, “Blue Cross NC is honored to serve our teachers, public safety officers and state employees and will continue to provide the highest level of service throughout the current contract.”

A Blue Cross spokeswoman did not immediately respond when asked whether the company would appeal the decision. The company has 30 days to file an appeal in Superior Court.

North Carolina Treasurer Dale Folwell, who is chairman of the health plan’s board of trustees, said in a statement that the plan implemented “a well-reasoned, high-integrity and fair procurement process for third-party administrative services.”

“This process clearly revealed that Aetna’s bid was superior to Blue Cross NC’s, and the plan’s board properly approved the contract award to Aetna,” he said.