Blue Cross had sued earlier this month, alleging improper lobbying on United Healthcare's behalf. Blue Cross attorney Kermit Brashear said attorney Mark Fahleson, who is the state GOP chairman, lobbied on behalf of United Healthcare while bids on the contract were pending.
Brashear said that violates state regulations because of Fahleson's political position. Fahleson declined to comment on Tuesday.
Blue Cross wants the contract voided or delayed, pending a review.
In court Monday, Brasher said the state should be able to defend itself without help from United Healthcare.
And, he said, "If United Healthcare can intervene and assist the state in (defending) this contract, then so should 30,000 state employees and their dependents and communities across the state."
United Healthcare's attorney Craig Dirrin said his client met the legal standard to join the lawsuit.
Assistant Attorney General Dale Comer, representing the state, said Nebraska officials want to get health insurance economically and fairly, which he said is different from United Healthcare's interest as a business.
Accordingly, Comer said, the state didn't oppose United Healthcare being allowed to join the suit.
Judge Burns ruled for United Healthcare, he said, because he couldn't grant an injunction that would harm United Healthcare without the company being a party to the lawsuit.
Nebraska officials have said switching health insurance companies will save taxpayers and state employees a combined $8 million annually, so the state plans to change to United Healthcare on July 1.
Blue Cross officials have argued the change actually will cost an additional $10 million per year because of limits in the United Healthcare network.
Blue Cross and Blue Shield has administered Nebraska's health insurance plan for nearly 30 years. The state self-insures but contracts for administration of its plan offerings.