February 14, 2024
Hours before regulatory hearings in Baton Rouge were set to begin Wednesday, Blue Cross and Blue Shield of Louisiana officials said they were shelving plans for a controversial $2.5 billion sale to Elevance Health.
In a statement early Wednesday, the Louisiana Department of Insurance said, “Late yesterday evening, Blue Cross notified the LDI that it has chosen to withdraw its Plan of Reorganization. The hearing scheduled for today and tomorrow is therefore canceled."
It’s the second time in less than a year that the Baton Rouge-based nonprofit has tabled its plan to sell itself to the for-profit Elevance, one of the nation’s largest insurers, amid steep opposition from doctors, hospitals, some policyholders and state lawmakers.
Blue Cross officials have argued that the deal, first announced in early 2023, was the best way to navigate a health care industry facing rapid change. But critics have raised concerns with how the deal is structured, with the track record of Elevance and with political involvement in a $3 billion foundation that would result from 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 prepared statement on Wednesday. "This is why we have decided to again pause the process in our proposed transaction with Elevance Health. This means that we are withdrawing our filing with the Louisiana Department of Insurance. We are also cancelling the policyholder proxy and vote process, including the special policyholder meeting that was scheduled for Feb. 21."
It is unclear whether the company will try for a third time to reorganize itself from a nonprofit to a for-profit so it can then be purchased by Elevance.
Elevance said it remains committed to the deal.
“We are supportive of BCBSLA’s decision to withdraw their plan of reorganization," Elevance officials said in a statement. "We will continue to meaningfully engage community members who are truly interested in better health outcomes and more affordable healthcare. We remain committed to this partnership and will work with BCBSLA on next steps in bringing that to reality.”
Opposing views
Blue Cross, which insures some 1.9 million people in Louisiana, has argued that while it is financial strong now, it needs to sell to a larger company in order to better compete in the future.
Elevance is one of the nation's largest insurers with its own telehealth platforms, specialty doctors' practices and pharmacy benefits manager, which Blue Cross has said would enable it to provide better service at a lower cost.
Critics haven't bought that argument, focusing on Elevance's track record of purchasing Blue Cross plans in other states. They have also criticized Blue Cross's plans to create a nonprofit foundation from the bulk of sale proceeds, Accelerate Louisiana, and questioned Gov. Jeff Landry's involvement in the focus and mission of the proposed foundation.
State lawmakers, who have taken particular aim at the deal in recent days, trumpeted the news this morning, after the Department of Insurance announced the hearing was canceled.
"Great news!" posted Republican Sen. Thomas Pressly of Bossier on X, formerly Twitter. "This is a win for the people of Louisiana."