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January 8, 2020

Anthem wins bid to administer state health plan

Photo | Flickr/Matthew Hurst Anthem Blue Cross and Blue Shield offices in St. Louis.
By Matt Pilon

State Comptroller Kevin Lembo has selected Anthem to administer a self-insured health plan that covers 210,000 state employees, retirees and their dependents.

Anthem’s winning bid, which will still require contract negotiations with the state, represents the next step in an ongoing effort by Lembo to reduce the state’s healthcare costs.

Under the envisioned contract with Anthem for the so-called Connecticut Partnership Plan, which could take effect July 1, state officials would have a seat at the bargaining table when insurance carriers and healthcare providers hash out a complicated set of reimbursement arrangements, which are almost always not disclosed to the public. 

State Comptroller Kevin P. Lembo

“This new market-altering shift ensures that corporate healthcare interests are better aligned with the interests of patients – not only for the good of the 210,000 people on the state health plan, but for every Connecticut resident,” Lembo said in a statement Tuesday. “Reimbursement arrangements will no longer be negotiated in the dark – but with the state directly at the table to ensure that cost and quality are directly aligned.”

His office released an RFP for the new contract back in September.

Lembo's office said the new contract is expected to save approximately $8 million per year to start, due to Anthem network discounts and administrative costs, but that additional savings are expected to accrue from the negotiations with providers as well as a planned "Centers of Excellence" program that aims to drive patients to more efficient and effective doctors and hospitals.      

Connecticut spends about $1.5 billion a year on self-insured health care, according to Lembo's office.

Lembo’s selection is a loss for UnitedHealthcare, which has been co-administering the state’s self-insured plan alongside Anthem.

UnitedHealthcare will continue to administer benefits for state retirees and their dependents on the state’s fully insured Medicare Advantage plan.

The deal comes seven months after Lembo’s office announced a pharmacy benefits contract with CVS Caremark, expected to save tens of millions of dollars annually. He is working with a state committee that seeks to save $180 million over the current biennium.

Editor's note: This story has been updated with additional financial information about the Anthem contract and state healthcare spending, provided to HBJ by the Comptroller's office.

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