Thank you to the state of North Carolina for posting their benefits contracts. And again, to @claudeai for the simple summary of this and the next contracts. Here it is, written for anyone. The Aetna Contract, Explained The State Health Plan covers about 740,000 North Carolina teachers, state employees, retirees, and their families. The state pays the medical bills itself — your tax dollars and employee premiums fund it. The state hires an insurance company not to insure anyone, but to run the plan: build the network of doctors and hospitals, negotiate the prices, and process the claims. That hired company is called a third-party administrator, or TPA. In December 2022, the state took that job away from Blue Cross Blue Shield of NC — which had held it for over 40 years — and gave it to Aetna. Aetna’s contract runs from January 1, 2025 through December 31, 2027, with roughly $3.5 billion a year in medical claims flowing through it. Here’s the part taxpayers should understand. Aetna gets paid about $91 million a year in fees to run the plan. In exchange, Aetna made promises: how big a discount it would get from hospitals, and how slowly costs would grow. But if Aetna breaks those promises, the fine print says it pays back only pennies on the dollar — roughly 8 to 20 cents penalty, for every dollar the overspending costs the plan — and never more than a cap of about $40 million a year total, no matter how large the overspend. What’s worse, The fastest-growing costs, like specialty drugs and claims over $250,000, don’t count toward the overpayment penalties. To make matters worse, Aetna’s parent company is CVS Health, which owns the plan’s pharmacy benefit manager. So one corporation sat on both sides of the plan’s medical and drug spending — including handling appeals when its own sister company denied a claim. And, Aetna measures its own performance using its own data. Oops. Did it work out? The state’s answer came this month: officials say switching administrators will save about $1 billion — which is another way of saying the current arrangement was costing that much more than it should. Members also felt the turbulence in 2025, when Duke Health nearly left the network in a payment dispute before a last-minute deal. But wait. North Carolina seems to know it’s not the perfect deal. On July 10, 2026, the plan’s board voted to hand the job back to Blue Cross Blue Shield of NC. The new contract starts January 1, 2028 and runs through December 31, 2031, with two optional one-year extensions. Until then, Aetna keeps running the plan through the end of 2027. What we know: Blue Cross won both jobs this time — medical administrator and pharmacy benefit manager, replacing CVS Caremark. The state expects roughly $12 billion in costs over three years and claims about $1 billion in savings. The state also toughened the process: it canceled the first bidding round in April 2026 because no bid met its minimum requirements, and on the pharmacy side Blue Cross was the only bidder that met them all. Separately, new “preferred provider” deals with UNC Health and Novant Health start in 2027, steering members toward those systems with lower out-of-pocket costs. What we don’t know yet — because the actual contract documents haven’t been made public: whether the new deal fixed the pennies-on-the-dollar problem, what Blue Cross actually promised on discounts and cost growth, what happens if it breaks those promises, and what the pharmacy pricing terms look like. We also don’t know what it means for one company to now hold the medical contract, the drug contract, and the network design all at once — less conflicted than the CVS arrangement, but a lot of eggs in one basket. Last time, the state posted every contract document publicly about seven weeks after the award. If it does that again, taxpayers will be able to check the fine print for themselves by early fall

1. It’s not about “needed care won’t be denied “. It’s about implementing the MOST COMPLICATED OPERATIONAL TRANSITION in the history of the world. Moving from the mixed system we have today to a system that is run by the feds is a lot harder than implementing high speed rail. Who does it ? How do they do it. What’s the actual plan ? Anyone who thinks the transition can happen in two years is an idiot. Truly. This will be so complicated, if it’s done in ten years, with only a few dozen patients getting lost in the system and dying , it would be a miracle. Companies have a hard time restructuring in two years. You are asking thousands of hospitals, thousands more clinics, practices , and doctors to restructure how they do business. You are asking EVERY BUSINESS IN THIS COUNTRY , to restructure how they do benefits. It’s easy to say they won’t have to do anything. BUT LET ME GIVE YOU AN ABSOLUTE FACT. BIG COMPANIES WONT CHANGE THEIR BENEFITS PLANS TO SAVE THEMSELVES TENS OF MILLIONS OF DOLLARS OR MORE, because dealing with care navigation can be difficult. Where in that legislation is there a transition plan for patients to move from the care they are getting today to what is available via your legislation ? Do you really think those hospitals getting paid a premium to do things that only our hospitals can do are just going to accept a fraction of the amount for patients they already have ? Where is your plan for these patients ? Who helps them when companies disband their benefits people and their TPA/Care Navigation people are fired because the Feds are now in charge ? 2. CBO Projections are ALWAYS WRONG. It is literally impossible to get the projections right. What happens if they are off by tens or hundreds of billions of dollars ? 3. How many years of litigation do you think there will be ? Have you noticed the shifts in our courts and the reality you face there ? Then of course there are the political realities. Now and in the uncertain future. Legislation is not a plan. Implementation is not easy. Leadership for anything like this is hard to hire. There are so many challenges that no one in your party even begins to address There is a path to universal care. But as I have posted,IMO, it starts with either Breaking Up the Big Medicine bill and/or working with the largest employers and providers to eliminate the friction and cost of all the middlemen involved.

When a large employer pays so little that their full time employees qualify for Medicaid , (or any public assistance ) we the taxpayers are effectively subsidizing that big company. That’s wrong