Tuesday, March 10, 2020

Treasurer Folwell Announces New Contract Award for Medicare Advantage Services for State Health Plan Medicare Members New Contract Generates $590M in Savings at No Cost to State Taxpayers; Members and Dependents to Receive Premium-Free Coverage with NO benefit changes

Raleigh
Mar 10, 2020

FOR IMMEDIATE RELEASE

(Raleigh, N.C.) – State Treasurer Dale R. Folwell, CPA, and the State Health Plan today announced the award of the Medicare Advantage Fully Insured Plan and Related Services contract to Humana. The contract, awarded by the State Health Plan Board of Trustees, will provide Medicare Advantage products to the Plan’s Medicare-eligible members with services beginning Jan. 1, 2021.

The potential annual cost savings under the new contract will be approximately $197 million, which totals $590 million over the course of the three-year contract. This impacts approximately 155,000 Plan members that are enrolled in a Medicare Advantage Plan. 

Eligible subscribers will continue to enjoy premium-free coverage for the Medicare Advantage Base Plan with no benefits changes. In addition, the savings generated from this new contract will allow the Plan to offer premium-free coverage to all eligible dependents on the Medicare Advantage Base Plan. This means that any eligible dependent would also have a $0 premium beginning Jan. 1, 2021. Today, members in the Base plan pay $112 per month for spousal coverage and $224 for family coverage. These changes would come with no cost to state taxpayers.

“This unprecedented agreement uses our largeness to generate substantial savings for the Plan, reduce the state’s Other Post Employment Benefit (OPEB) liabilities, all while offering our Medicare members more affordable options for their dependents,” said Treasurer Folwell. “I’m thrilled that we’re able to provide this type of coverage to those that have taught our children, protected our homes and businesses, or have otherwise served our state and have earned such a valuable benefit at no cost.” 

The award is the result of a Request for Proposals (RFP), a competitive bid process in which the Plan solicited and selected industry-leading partners providing exceptional customer service, technological resources and professional support. In addition, the contract includes services and programs to help Medicare members effectively manage their health. 

Humana was one of four companies bidding for the contract. Aetna, Blue Cross and Blue Shield of NC and Sierra Health and Life (a subsidiary of UnitedHealthcare) also submitted proposals. 

“I applaud the Plan staff for completing a months-long, fully transparent and rigorous procurement process that paved the way for this award,” said Dee Jones, State Health Plan Executive Director. “Their hard work and dedication during the procurement process has paid off and the Plan and our members will be able to reap the benefits,” continued Jones. 

The contract will extend for three years until 2023, at which time the Plan will review the performance of Humana and decide on issuing another RFP or extending the contract for two, one-year increments for a total of up to five years. 

Members will be learning more about the transition of coverage from UnitedHealthcare to Humana over the next several months leading up to Open Enrollment, which will take place in October. 

The State Health Plan, a division of the Department of State Treasurer, provides health care coverage to more than 727,000 teachers, state employees, retirees, current and former lawmakers, state university and community college personnel, and their dependents.