Blue Cross hearing on sale to Elevance delayed - KPLC

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LAKE CHARLES, La. (KPLC) - A crucial hearing on the proposed sale of Blue Cross and Blue Shield of Louisiana to Elevance Health that was scheduled for next week has been postponed until early October.

The delay, which was scheduled to begin on Monday, came at the request of the Baton Rouge-based insurer. Blue Cross told the La. Dept. of Insurance it needed more time to address concerns about the $2.5 billion deal raised in an independent consultant’s report, according executive director of the department David Caldwell.

The new hearing date is set for October 5 or 6.

Blue Cross spokesperson Cindy Wakefield said the firms requested the delay to allow stakeholders “more time to understand the benefits of this opportunity.”

‘’Blue Cross and Blue Shield of Louisiana and Elevance Health’s mutual goal for this acquisition is to offer the best services at competitive prices to ultimately improve the health and lives of Louisianians,’’ Wakefield said. ‘’We will continue our conversations to ensure this acquisition is beneficial, data driven and transparent.’’

The postponement comes as political pressure is building to slow the approval of a deal announced in January.

The deal will allow the insurer to provide better services and combat rising health care costs.

However, some policyholders and political leaders have raised questions about the effects on customers, and how proceeds from the sale of the nonprofit to a large publicly-traded company will be divided between Blue Cross policyholders and a social welfare foundation that Blue Cross plans to create.

Attorney General Jeff Landry, the current frontrunner in the race for governor, formally asked Insurance Commissioner Jim Donelon Wednesday to delay the regulatory hearing, and also announced he is investigating it for possible antitrust violations. Sen. Barrow Peacock followed up Thursday in a separate letter to Donelon, asking the commission to give Blue Cross policyholders and the public more time to evaluate the deal.

Caldwell said he didn’t believe the decision was made in response to political pressure, though he acknowledged that ‘’a little more time, to the extent it makes people more comfortable with this deal, is fine.’’

Rather, Caldwell said, it’s because of issues raised in a report by an independent actuarial consulting firm the department hired to evaluate the deal.

Blue Cross has proposed giving a fraction of sale proceeds to policyholders. That group is made up of employers and some people who have purchased plans individually, and not every person in the state covered by Blue Cross.

The policyholders would receive $307 million, a figure that translates to about $3,000 per policyholder.

The rest will go to the foundation, Accelerate Louisiana, along with an additional $1 billion or so from Blue Cross reserves.

Blue Cross financial advisers, including investment banking firm Chaffe & Associates, determined the value of those voting rights.

But the report submitted to insurance regulators takes issue with Chaffe’s findings, questioning the fairness of the deal and saying policyholders ‘’are being deprived of their rights’' under their contract with Blue Cross.

Copyright 2023 KPLC. All rights reserved.

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