Elevance Health will delay a plan to buy Blue Cross and Blue Shield of Louisiana for $2.5 billion.
The deal, first announced in January of this year, was designed to bring 1.9 million health plan customers and another state market to Elevance Health’s family of affiliated Anthem Blue Cross Blue Shield branded health insurance plans. Elevance Health, which is the nation’s second largest health insurer with 48 million subscribers, owns Anthem branded Blue Cross and Blue Shield plans in 14 states.
But various stakeholders need more time before agreeing on “the plan of reorganization” of the health insurance companies so Elevance Health withdrew its acquisition application from the Louisiana Department of Insurance.
“One theme continues to emerge, and that is our key stakeholders would like more time for questions to be addressed about the plan of reorganization,” Elevance Health said in a statement Tuesday night. “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. We have chosen to withdraw BCBSLA’s plan of reorganization and Elevance Health’s acquisition application from the Louisiana Department of Insurance to provide more time for key stakeholders to understand the benefits this transaction will provide to Louisianians and how the quality service our stakeholders know, and value will continue.”
Mergers and acquisitions among Blue Cross and Blue Shield companies are complicated and take time due to different ownership structures.
It’s common for proceeds of sales of nonprofits or mutual-owned health insurers to publicly-traded and investor-owned companies like Elevance Health to be allocated to not-for-profit foundations or charities. That way, the long-held mission of the mutual or nonprofit continues in some form.
In this case, Blue Cross and Blue Shield of Louisiana, founded in New Orleans in 1934, is a private mutual company owned by policyholders.
“Blue Cross and Blue Shield of Louisiana and Elevance Health entered into this agreement with a mutual goal to improve the health outcomes and lives of all Louisianians by offering new programs alongside the highest quality services that BCBSLA stakeholders have relied on for decades,” Elevance Health said. “The connection between BCBSLA and Elevance Health remains the right partnership at the right time for the best health outcomes that Louisianians need and deserve. We are determined to meet these goals.”
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