Aetna has won a huge state contract in Texas, pulling away 415,000 lives from Blue Cross Blue Shield and with them several billion dollars in revenue.
The Teachers Retirement System of Texas selected Aetna to administer its Active Care health for some 415,000 current public school teachers and their dependents.
Aetna estimates that the contract will be the largest membership sale in its history. Between the new deal and two other retiree benefit programs on contract with the system, Aetna's Texas teacher membership will total almost 660,000 lives.
With a "broad range of tools," Aetna will try to help the TRS "contain medical costs while improving the health and well-being of the TRS Active Care employees and their dependents," Cain Hayes, president of Aetna's government sector and labor division, said in a media release.
Under the new Active Care contract, starting in September, Aetna will process claims, manage networks and offer TRS members a "dedicated care advocate team."
Aetna's new contract for active Texas public school teachers comes at the termination of a 12-year-long contract held by Blue Cross Blue Shield of Texas, a Health Care Services Corporation company.
BCBSTX first won the Active Care contract in 2002, a second in 2008 and then had that extended through August 2014, with the most recent update worth $4.9 billion over two years.
The financial terms of Aetna's new contract have not yet been set; a TRS spokesperson said that "final contract negotiations are now under way."
Based on the value of Blue Cross Blue Shield's most recent contract, though, Aetna's total annual revenue from the Teachers Retirement System of Texas could be in the range of $5 billion when including the other two contracts.
Aetna's contract for TRS Care, a program covering about 150,000 retired Texas teachers and their dependents, is worth $4.4 billion on a two year basis, and the Medicare Advantage contract, covering about 90,000 retirees, is valued at $1.6 million annually.
In total, the Texas Retirement System's $124 billion trust fund covers about 1.3 million public K-12 and higher education employees and retirees.
Those not in the Active Care plan are covered under HMOs administered by Scott & White Health Plan, First Care Health Plans and Valley Baptist Health Plan on four-year contracts worth $189 million, $145 million and $5.4 million respectively.