Kansas Evaluates Health Insurance Plans: Blue Cross vs Aetna

Officials in Kansas are evaluating whether to exclude Blue Cross Blue Shield of Kansas from the state employee health insurance plan. This decision could lead to a single-option plan and potentially save the state an estimated $240 million over three years.

At an April 15 meeting, the Kansas State Employees Health Care Commission considered proposals from Aetna and Blue Cross. The bids were to administer health insurance for approximately 43,400 state employees, starting January 1, 2027. Continuing with the current setup involving both insurers would cost more than selecting solely Aetna’s Local Best plan.

The financial implications are significant. Blue Cross's proposal alone was over $1.5 billion, while Aetna presented two options: $1.4 billion for Aetna Choice POSII and $1.3 billion for Aetna Local Best. A contract including both Blue Cross and Aetna Local Best would be just under $1.5 billion.

Commission member Rep. Bill Sutton emphasized fiscal responsibility, preferring Aetna for cost savings. However, some commissioners requested further analysis, particularly regarding Aetna's rural provider network.

The decision, expected in May, will include comprehensive input regarding Aetna's capacity to meet the needs of current Blue Cross enrollees, who number 35,400 compared to Aetna's 4,500. Concerns over network adequacy, especially in ancillary services like diagnostic imaging, were raised. Jennifer Flory from the State Employee Benefits Health Plan noted that Blue Cross covers 80% of ancillary services in certain regions, compared to Aetna's 28%.

Aetna promised to expand its network quickly, including discussions about contract penalties for unmet goals. Insurance Commissioner Vicki Schmidt stressed the importance of network adequacy over financial penalties, considering employees' access to essential services.

Additionally, rising program costs threaten to deplete health insurance reserves, with projections indicating a loss of nearly $31 million in 2026 and a deficit of $15 million by 2027. The commission also examined rising pharmacy expenses, notably due to GLP-1 drugs for weight management, which could lead to a 13% increase in employee premiums. Commission chairman Adam Proffitt acknowledged these issues and suggested exploring plan benefit changes to mitigate premium hikes. Options include altering co-pay structures and removing prescription drug caps.