Blue Cross Louisiana backs away from $2.5 billion Elevance deal
19th February 2024 · 0 Comments
By Greg LaRose
Contributing Writer
(lailluminator.com) — Blue Cross Blue Shield of Louisiana won’t go through with a reorganization plan that would have put the company in the hands of Elevance Health, a private, shareholder-owned company. The decision canceled public hearings that were scheduled for last Wednesday on the $2.5 billion proposed deal.
In a brief statement, Deputy Commissioner John Ford said Blue Cross notified the state insurance department late Tuesday evening it had chosen to withdraw its reorganization plan. Some 1.9 million Louisiana residents, or roughly 40 percent, have their health coverage through Blue Cross.
Physician and hospital groups – both influential in Capitol politics – have stated their opposition to the deal, along with some shareholders. State lawmakers, even though they don’t have approval power on the sale, have increasingly come out against it in recent weeks.
“It is clear that our stakeholders need more time and information to understand the benefits of the changes we have proposed,” Blue Cross, which operates as a tax-paying nonprofit, said last Wednesday in a statement. Its leaders have said the sale to Elevance is necessary for the health insurance provider to continue providing policyholders with affordable coverage and expanded care options.
A vote among Blue Cross policyholders on the proposed sale, that had been scheduled for Tuesday of this week, has also been called off.
It’s the second time a deal between Blue Cross and Elevance has been jettisoned since it was first announced early last year. The parties previously failed to come to terms.
Elevance’s history of taking over Blue Cross entities in other states and encountering issues has been called into question. Some state lawmakers have highlighted Elevance’s greater frequency of claim denials and poorer customer service marks when compared with Blue Cross,
Another criticism of the plan was that the governor would have notable sway over the $3 billion foundation that would have been created with proceeds from the sale. In recent days, Gov. Jeff Landry had pushed to steer millions of dollars in research funding from the sale to the Pennington Biomedical Research Center, which The Advocate reported last week had close lobbying ties to the governor’s executive and campaign staff.
Landry’s office has said Pennington is ideally suited for the money in question, and its choice had nothing to do with chief of staff Kyle Ruckert having been the center’s lobbyist in the past. His wife, Lynnel Ruckert, now represents Pennington.
In a statement following the announcement, the governor took a less bullish tone on the Blue Cross-Elevance deal than in previous weeks.
“From the beginning, we recognized that any transaction such as this would be disruptive to the healthcare landscape of the State,” Landry said in his statement. “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.”
The Public Affairs Research Council (PAR), a nonpartisan government policy watchdog group, questioned the outsized influence given to the governor in the proposal to appoint board members for the Accelerate Louisiana Initiative. The board would have had say-so over how the foundation would spend $3 billion from the transaction.
“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 council said, in part, in a statement. “The governor’s appointee would not be subject to state Senate oversight and confirmation. The governor’s influence on the foundation, including potentially rewarding his allies or withholding funds from adversaries, would be without review.”
PAR also noted its concern is not specific to Landry because future governors would have the same power to choose Accelerate Louisiana board members when vacancies occur.
This article originally published in the February 19, 2024 print edition of The Louisiana Weekly newspaper.
