North Carolina State Treasurer Dale Folwell, a contrarian who favors radical reversals of the status quo, is again challenging the way things are.
This time he supports flipping the administration of a portion of the State Health Plan (SHP) that serves a half-million teachers and state employees.
The treasurer, whose office oversees the SHP, announced last week that the State Health Plan Board of Trustees voted unanimously to drop the longtime administrator of the plan, Blue Cross NC, and turn the job over to Aetna Insurance.
The 10-member board made the decision, but the vote was influenced by how Fowell’s staff rated the three proposals for the administration contract. The contract is for three years starting in 2025 and allows for two one-year extensions. UMR, a subsidiary of UnitedHealthcare, also sought the contract.
The contract decision means that as of Jan. 1, 2025, Blue Cross NC – the administrator of the plan for 43 years – will be out and Aetna Insurance will run the SHP. Folwell said the switch will save the state $140 million over five years, but the basis of that claim and the effect on service is unclear. Meanwhile, participants in the plan will have to navigate new networks and some may have to find new doctors. (Retired state employees covered by the SHP’s Medicare advantage plan run by Humana will not be affected.)
The change could also eliminate hundreds of jobs at Blue Cross NC, a nonprofit based in Durham.
Blue Cross NC called the decision “perplexing” and will appeal it within the state government. If that fails, the insurer may go to court.
Folwell told me, “The bid that (Blue Cross NC) presented was insufficient.” He added, “It’s like when you turn in a paper and some of the questions are not answered, you don’t get a high score.” The treasurer said Blue Cross NC’s proposal “just seemed to have taken for granted that they were going to get the business.”
Blue Cross NC said it was the process, not its proposal, that was insufficient. Sara Lang, a spokesperson for the insurer, said, “Why didn’t the process of this bid appropriately evaluate the scope and strength of network and access to care? Specifically, this bid process collected less information, with yes/no questions and no additional context or explanation.”
The North Carolina Educators Association (NCAE), which represents many of the state’s teachers, is also upset. NCAE President Tamika Walker Kelly said, “It’s alarming that a decision of this magnitude could be announced with no public oversight and no warning, and we will examine how this move will impact our members.”
For Folwell, shaking up longstanding arrangements is all in a day’s work. He’s all but gone to war with the state’s largest health care systems over their failure to disclose their prices per procedure. He unfailingly refers to them as a “cartel.”
In December, Folwell called for the resignation of Larry Fink, CEO of the giant asset management firm BlackRock. Folwell said BlackRock’s investments were forgoing maximum returns by favoring companies that promote clean energy over those in the fossil fuel industry. The North Carolina Retirement Systems have about $14 billion invested through BlackRock.
“Unfortunately, Mr. Fink’s political agenda has gotten in the way of his same fiduciary duty,” Folwell said. Fink has not heeded the state treasurer’s call.
Folwell, a former state legislator, is weighing a run for the Republican gubernatorial nomination in 2024. His willingness to pick fights with BlackRock, the state’s largest health care systems and its largest health insurer may polish his image as a political maverick, but his latest move may bring him grief.
When it comes to health care, people don’t like disruptions and uncertainty. They’re familiar with their networks and they like their doctors. If SHP members find themselves having to rearrange their providers as 2025 approaches, the blame for the confusion and irritation could fall on Folwell in 2024.
Associate opinion editor Ned Barnett can be reached at 919-829-4512, or nbarnett @newsobserver.com