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, state regulators said Thursday.
The delay in the two-day hearing, which was scheduled to begin on Monday, came at the request of Blue Cross. The Baton Rouge-based health insurer told the Louisiana Department of Insurance it needed more time to address concerns about the $2.5 billion deal raised in an independent consultants' report, according to David Caldwell, executive director of the department.
In a prepared statement, 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 first announced in January.
Blue Cross executives have said that the deal will allow the insurer, which covers 1.9 million people in Louisiana, to provide better services and combat ever-rising health care costs. Some policyholders and political leaders have raised concerns about the effect 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.
State lawmakers on a joint legislative insurance committee grilled Blue Cross officials for nearly six hours Wednesday about the terms of the deal and whether it is in the best interest of policyholders and the people of the state.
Requests for delays
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, R-Bossier City, 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 state insurance regulators takes issue with Chaffe's findings, questioning the fairness of the deal and saying that policyholders "are being deprived of their rights" under their contract with Blue Cross.
The delay in the hearing means Blue Cross will also have to delay a vote of its shareholders, two-thirds of whom must approve the deal.
The new hearing date is Oct. 5-6.
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August 18, 2023 at 06:48AM
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Louisiana Insurance Commission postpones hearing on Blue Cross sale until October - NOLA.com
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