Blue Cross Blue Shield deal off; company says business as usual
It’s business as usual today for the 1.9 million Louisianans, including hundreds in Lincoln Parish, who have their health coverage through Blue Cross Blue Shield in the wake of the company’s decision not to pursue a sale to Elevance Health of Indiana.
“It means no changes,” BCBS Strategic Communications Director Dianne Eysink said Wednesday afternoon.
The move cancels a vote by BCBS policyholders that was to have taken place next week.
BCBS notified Louisiana’s insurance department late Tuesday it was backing off of the muchpublicized $2.5 billion proposed sale deal. BCBS insures about 40% of Louisiana residents.
BCBS is a nonprofit company; Elevance is for-profit.
The Louisiana State Medical Society, along with some BCBS policyholders and state lawmakers, had come out against the deal in recent weeks, saying they were concerned about potential premium increases, benefit reductions, and the sway the governor would have over a $3 billion foundation that would have been created with proceeds of the sale.
“It is clear that our stakeholders need more time and information to understand the benefits of the changes we have proposed,” Blue Cross said in a statement released Wednesday morning. “This is why we have decided to again pause the process in our proposed transaction with Elevance Health.”
Elevance Health also released a statement Wednesday supporting the decision by Blue Cross Blue Shield. That support was backed up by Louisiana Attorney General Liz Murrill.
“Based upon the information I reviewed, especially that produced at an eight-hour Senate committee oversight hearing, I believe BCBS made the right decision,” Murrill said.
Sen. Jay Luneau, who represents part of Lincoln Parish, was on a joint committee that questioned BCBS executives during that hearing last week in Baton Rouge.
“I’m happy there was at least a pause,” the Alexandria Democrat said reacting to Wednesday’s announcement.
But he said he isn’t sure what pause means.
This is the second time a deal between BCBS and Elevance has been nixed. The first time the two failed to come to terms.
Luneau said lawmakers — who would not have had a say in the actual sale vote — were concerned about issues encountered in other states when Elevance bought BCBS entities. Among the complaints: greater number of claim denials and poor customer service. Plus, Elevance has incurred fines in seven states where it operates.
“This is alarming,” Luneau said during last week’s legislative hearing. “I have real serious concerns about what is going to happen if this deal goes through.”
BCBS had said the sale to Elevance was necessary for the health insurance provider to continue providing those insured with affordable coverage and expanded care options.
Blue Cross reportedly spent $40 million in mailouts and other advertising trying to convince stakeholders to approve the plan. Apparently, only 92,000 of BCBS’s 1.9 million Louisiana customers received proxies to vote.
Those supposedly are policyholders, with the rest having some form of Blue Cross insurance.
Among other things, those policyholders were told they might be eligible for a $3,000 cash payment per eligible policy, and that a billion-dollar nonprofit foundation funded with the sale proceeds would be set up “focused only on improving Louisiana.”
That foundation was to be called Accelerate Louisiana.
Luneau said lawmakers were told Accelerate Louisiana would be nonpolitical, but apparently similar foundations started by Elevance elsewhere dump money into political causes.
Plus, “they never could tell us who would be on the board of directors,” he said.
The Public Affairs Research Council, a nonpartisan government policy watchdog group, also questioned the structure of the governing board, particularly the appointment of a board member by Louisiana’s governor.
“This appointment would inappropriately give the governor influence over the distribution of investment proceeds from $3 billion in assets,” PAR said in a statement. “Such an expansion of the power of the governor’s office, which is already too powerful, would come with none of the normal checks and balances that exist within state government.”
The gubernatorial appointee would not have been subject to state Senate confirmation.
“The governor’s influence on the foundation, including potentially rewarding his allies or withholding funds from adversaries, would be without review,” PAR said.
Blue Cross agreed to add the gubernatorial appointee after Gov. Jeff Landry raised concerns about the sale plan when he was a candidate for governor.
In October 2023, Blue Cross postponed hearings on the then-proposed sale after a meeting with Landry, who at the time was Louisiana’s attorney general and the gubernatorial frontrunner.
According to news accounts at the time, Landry said there were too many unanswered questions, and a decision should wait until the new gubernatorial administration was in place.
Landry later sought and got a revised plan for Accelerate Louisiana that intentionally steered all the initiative’s research money to LSU-affiliated Pennington Biomedical Research Center in Baton Rouge.
The Baton Rouge Advocate reported earlier this week Landry’s chief of staff Kyle Ruckert had been Pennington’s lobbyist, and that his wife now represents the center.
Landry issued the following statement Wednesday: “From the beginning, we recognized that any transaction such as this would be disruptive to the healthcare landscape of the state. We appreciated the cooperation we received from both parties, our commissioner of insurance, and the Legislature in both asking the tough questions, looking for solutions, and providing the answers so that the policyholders could make an informed decision and the state would be prepared if such a transaction occurred.”
