Falwell supports risky changes to the state’s health care plan



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North Carolina State Treasurer Dale Falwell


North Carolina State Treasurer Dale Falwell, a proponent of radical change to the status quo, is once again challenging the situation.

This time, he supports de-administering part of the state health plan (SHP), which serves half a million teachers and government employees.

The treasurer, whose office oversees SHP, announced last week that the State Health Plan’s board of trustees voted unanimously ditch the plan’s longtime administrator, Blue Cross NC, and hand over the job to Aetna Insurance.

The 10-member board made the decision, but the vote was influenced by how Fowell staff evaluated the three administrative contract proposals. The contract is for three years, starting in 2025, with a two-year extension. UMR, a subsidiary of UnitedHealthcare, also sought the contract.

The contract settlement means that beginning Jan. 1, 2025, Blue Cross NC — the plan’s administrator for 43 years — will retire and Aetna Insurance will manage the SHP. Folwell said the switch would save the state $140 million over five years, but the basis for that claim and the impact on services is unclear. At the same time, plan members will need to navigate new networks, and some may have to find new doctors. (Retired government employees who are covered by the Medicare SHP benefit plan administered by Humana will not be affected.)

The change also could eliminate hundreds of jobs at Durham-based nonprofit Blue Cross NC.

Blue Cross NC called the decision “puzzling” and will appeal it to the state government. If this fails, the insurer can go to court.

Falwell told me, “The rate that (Blue Cross NC) submitted was insufficient.” He added: “It’s like if you hand in a paper and some questions aren’t answered, you won’t get a high score.” The treasurer said Blue Cross NC’s offer “just seemed like a given that they were going to get the business.”

Blue Cross NC said the process, not its proposal, was insufficient. Sarah Lang, a spokeswoman for the insurer, said: “Why was the scope and capacity of the network and access to care not properly assessed during this application? In particular, this bid process gathered less information with yes/no questions and no additional context or explanation.’

The North Carolina Association of Educators (NCAE), which represents many of the state’s teachers, is also upset. NCAE President Tamika Walker Kelly said: “It is alarming that a decision of this magnitude could be announced without public scrutiny or warning, and we will examine how this move affects our members.”

For Folwell, shaking up longstanding arrangements is all in a day’s work. He nearly went to war with the state’s largest health systems over their failure to disclose prices for the procedure. He invariably calls them a “cartel”.

In Dec. Folwell called for resignation Larry Fink, CEO of asset management giant BlackRock. Folwell said BlackRock’s investments forgo maximizing returns by favoring companies that promote clean energy over fossil fuel companies. North Carolina Retirement Systems has about $14 billion invested through BlackRock.

“Unfortunately, Mr. Fink’s political agenda got in the way of his fiduciary duties,” Folwell said. Fink did not heed the state treasurer’s call.

Folwell, a former state legislator, is weighing a 2024 GOP gubernatorial bid. His willingness to take on BlackRock, the state’s largest health care system and the state’s largest insurance company, may polish his image as a political index, but his latest move could bring him grief.

When it comes to healthcare, people don’t like disruption and uncertainty. They are familiar with their networks and like their doctors. If SHP members have to realign their suppliers as 2025 approaches, the blame for the confusion and irritation may fall on Folwell in 2024.

Deputy Opinion Editor Ned Barnett can be reached at 919-829-4512 or nbarnett @newsobserver.com

Falwell supports risky changes to the state’s health care plan

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