2024-02-16 14:46:42
People mingle on Bourbon Street in the French Quarter as some throw beads from balconies on Mardi Gras Day in New Orleans, Tuesday, Feb. 13, 2024. Tulane economist Toni Weiss estimates that the Carnival season has a $900 million impact on the New Orleans economy. (AP Photo/Matthew Hinton)
NEW ORLEANS — For a second time, Blue Cross and Blue Shield of Louisiana has called off plans for a $2.5 billion sale to Indiana-based, for-profit insurer Elevance Health.
The nonprofit health insurance provider announced the news hours before regulatory hearings were scheduled to begin in Baton Rouge.
The deal was first announced in early 2023. After a barrage of criticism from doctors, hospitals, lawmakers and policyholders, the proposal was put on hold a few months later, then revived at year’s end.
Blue Cross, which insures nearly 2 million people in the state, has argued that selling to a bigger company — with its own doctors’ practices, telehealth platforms and pharmacy benefits manager — would keep it competitive in a changing industry. But critics cried foul, citing the potential for rising premiums for policyholders and shrinking reimbursements for caregivers, among other concerns.
There are also questions about how the deal is structured, especially the creation of a $3 billion foundation that would result from the sale.
“Since we announced our intent to be acquired by Elevance Health last year, it has become abundantly clear that the work we do each day is not only appreciated by our members, providers, group leaders and broker partners, it is highly valued,” said Cindy Wakefield, vice president of strategic communications for Blue Cross and Blue Shield of Louisiana. “It is clear that our stakeholders need more time and information to understand the benefits of the changes we have proposed.”
University of New Orleans economics and finance professor W. J. (Dub) Lane, a healthcare industry expert, said critics of the deal simply don’t like the idea of an out-of-town, for-profit company taking over the state’s nonprofit health insurance provider. But, he said, there are changes happening in the industry that explain Blue Cross execs’ desire to make the move.
“Since Blue Cross is the ‘big dog’ in the state of Louisiana, people do not realize that on the national scale they are tiny and all the other health insurance companies doing business in the state are much, much bigger, which gives them access to better technology, better economies of scale and a better ability to deal with the changing healthcare environment,” said Lane. “We are moving to what is called ‘population health,’ which pays differently than the current standard and has different risks involved.”
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