The Blue Cross Blue Shield of Louisiana on Monday, January 23, 2023 in Baton Rouge, Louisiana.
Blue Cross Blue Shield of Louisiana President and CEO Steve Udvarhelyi walks back to his seat after being excused during a joint legislative insurance committee hearing on the sale of Blue Cross Blue Shield of Louisiana to Elevance Health on Wednesday, August 16, 2023 in Baton Rouge, Louisiana.
Jeff Landry at KLFY-TV gubernatorial debate on Friday, Sept. 15, 2023.
Tim Temple, unopposed candidate for Louisiana Commissioner of Insurance, speaks during the National Association of Realtor’s Riding with the Brand tour stop in Shreveport, Louisiana, at the Shreveport Convention Center Tuesday, Sept. 19, 2023.
Insurance commissioner Jim Donelon is retiring this year, and lawmakers are considering making the position appointed rather than elected.
The Blue Cross Blue Shield of Louisiana on Monday, January 23, 2023 in Baton Rouge, Louisiana.
Insurance commissioner Jim Donelon is retiring this year, and lawmakers are considering making the position appointed rather than elected.
Blue Cross and Blue Shield of Louisiana, the nonprofit that provides health insurance to more than 40% of the state’s residents, is scrapping — for now — its plan to sell to Elevance Health, according to documents filed with regulators.
The Baton Rouge-based insurer notified the Louisiana Department of Insurance Monday it is withdrawing its application to reorganize into a for-profit company that would then be purchased by Elevance for $2.5 billion.
In a joint statement, the companies said they “remain committed to refiling the plan of reorganization and acquisition application.” No date was specified, and a Blue Cross spokesperson said the new filing likely won’t come until next year, which means after a new governor and new Insurance Commissioner have taken office.
The withdrawal of the applications comes in the wake of a meeting last week between Blue Cross officials and Louisiana Attorney General Jeff Landry, the Republican front-runner in the race to succeed Gov. John Bel Edwards.
Landry, who previously raised questions about the deal and has opened an investigation into it, made clear in the meeting he did not want the sale to go forward until more questions have been answered and a new governor and insurance commissioner have taken office.
Jeff Landry at KLFY-TV gubernatorial debate on Friday, Sept. 15, 2023.
In their prepared statement, Blue Cross and Elevance acknowledged the concerns that have been aired in recent weeks, and said their decision to pull back is intended to give everyone more time to learn about the advantages of the deal.
“Since we are committed to making sure these questions are answered, BCBSLA and Elevance Health do not believe it is the right time to hold public hearings and a policyholder vote,” the statement said.
Two-thirds of Blue Cross’ 92,000 policyholders and the Commissioner of Insurance must approve the deal.
Louisiana Insurance Commissioner Jim Donelon, whose office has been shepherding the proposed sale through the regulatory approval process since it was filed early this year, repeatedly said he wanted to resolve the deal one way or the other before leaving office in December.
Now, that job will fall to Tim Temple, who was automatically elected to succeed Donelon in August when his sole opponent in the race dropped out.
In a prepared statement, Temple said, “I am glad Blue Cross is considering how best to address the concerns and questions brought by the review process and reevaluating their path forward. Should they choose to during my term as commissioner, I am committed to following the processes set by law in an effort to best serve the people of Louisiana.”
Tim Temple, unopposed candidate for Louisiana Commissioner of Insurance, speaks during the National Association of Realtor’s Riding with the Brand tour stop in Shreveport, Louisiana, at the Shreveport Convention Center Tuesday, Sept. 19, 2023.
Monday’s decision ends months of work and behind-the-scenes lobbying efforts by officials from Blue Cross, which insures some 1.9 million people across the state through its health plans. Board members and Blue Cross CEO Dr. Steve Udvarhelyi argued the sale to Elevance, a publicly traded company based in Indiana, would allow the insurer to provide better services and combat ever-rising health care costs.
As the deal came under closer scrutiny, however, a growing number of policyholders, doctors, hospitals and political leaders expressed concerns about the effect of the sale on customers.
Blue Cross Blue Shield of Louisiana President and CEO Steve Udvarhelyi walks back to his seat after being excused during a joint legislative insurance committee hearing on the sale of Blue Cross Blue Shield of Louisiana to Elevance Health on Wednesday, August 16, 2023 in Baton Rouge, Louisiana.
They also questioned how Blue Cross planned to divide proceeds from the sale between policyholders, who would have received about $3,000 each, and a $3 billion social welfare foundation that Blue Cross planned to create.
Two independent expert reports prepared for Donelon’s office added to the skepticism, raising questions about the way the deal is structured and the fairness of the deal.
Assuming Blue Cross and Elevance continue moving forward with plans for the sale in the new year, they will have to go through the same steps they did this year.
That includes filing a plan of reorganization of the indemnity company from a nonprofit to a for-profit, as well as filing an acquisition plan. Blue Cross will also have to issue new proxy ballots to its policyholders and set a new date for a policyholder meeting.
The company will not be starting from scratch, however, company spokesperson Cyndi Wakefield said. Rather, the new plan and proposal will be a modified version of the old one.
Wakefield could not say what specific provisions of the reorganization and proposed sale will be amended or how long the new process will take.
“We are still hopeful we can close in early 2024,” she said.
Email Stephanie Riegel at [email protected].
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Blue Cross backs off plan for $2.5 billion sale to Elevance Health – NOLA.com
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