Kansas Considers Dropping Blue Cross Blue Shield From State Employee Health Plan

The Kansas State Employees Health Care Commission is weighing a proposal to remove Blue Cross Blue Shield of Kansas from the state employee health insurance plan to achieve significant cost reductions. If the commission moves forward with the change, the state could save nearly $240 million over a three-year period.

The decision follows an April 15 meeting where commissioners reviewed proposals to administer health insurance plans for 43,400 eligible employees. The proposed contract would begin on January 1, 2027.

Financial Comparison of Proposals

The commission is comparing the costs of maintaining the current dual-provider system against switching to a single administrator. According to the commission, the cost for Blue Cross Blue Shield alone would exceed $1.5 billion over the three-year term.

Aetna submitted two separate proposals for the state’s consideration:

• Aetna Choice POSII, priced at $1.4 billion.
• Aetna Local Best, priced at $1.3 billion.

The nearly $240 million in potential savings represents the difference between the current setup, which utilizes both companies, and the adoption of the Aetna Local Best plan. The cost for the combined current setup of Blue Cross and Aetna Local Best is just under $1.5 billion.

Rep. Bill Sutton, a Gardner Republican serving on the commission on behalf of the House Appropriations Committee, indicated a preference for Aetna based on these figures.

I’m a dollar and cent guy, We have the responsibility to our plan members.

Rep. Bill Sutton, Kansas House Appropriations Committee

Network Access and Rural Coverage Concerns

Despite the potential savings, some commission members expressed concern regarding the adequacy of Aetna’s provider network, particularly for employees in rural regions. Blue Cross Blue Shield has provided state insurance for at least 40 years, according to a company spokeswoman.

Cristi Cain, a representative for state employees on the commission and an employee of the Kansas Department of Health and Environment, questioned whether employees would maintain access to necessary medical care under Aetna.

I have a team of people who are based across the state, and I know that they already have problems accessing care, I don’t want to make it more difficult for state employees to access care.

Cristi Cain, Kansas Department of Health and Environment

A commission report highlighted a disparity in ancillary services—which include lab work, diagnostic imaging, and physical or speech therapies—between the two providers. Jennifer Flory, director of the State Employee Benefits Health Plan, noted that Blue Cross’ ancillary network had notably higher penetration across all regions.

In the southwest corner of Kansas, the disparity is particularly sharp: Blue Cross covered nearly 80% of ancillary services, while Aetna covered only 28%.

The commission report noted that Aetna’s overall network penetration is higher primarily due to the high population density in the Kansas City metropolitan area, though coverage for physicians and specialists is nearly equal between the two firms.

Current Enrollment and Next Steps

The current 2026 plan includes both providers, but enrollment is heavily skewed toward Blue Cross. Of the state employees currently enrolled, 35,400 are with Blue Cross and 4,500 are with Aetna.

Commissioners are evaluating the potential disruption that would occur if all Blue Cross enrollees were required to switch insurance providers. The commission is expected to reach a final decision in May 2026 after the companies submit additional requested information.