Blue Cross of Louisiana Pauses Elevance Sale…Again

This is the second setback in what would be a $2.5B sale.

Less than 12 hours before regulatory hearings were set to take place, Blue Cross halted the sale to Elevance, for the second time this year. Citing regulatory and stakeholder concerns, BCBS has paused the sale for what would have been the biggest healthcare deal in the state’s history. BCBS operates in all 50 states and their Louisiana operation is the state’s largest insurer with 1.9 million members.

"It is clear that our stakeholders need more time and information to understand the benefits of the changes we have proposed," Blue Cross said in a statement. "This is why we have decided to again pause the process in our proposed transaction with Elevance Health.”

For the sale to go through BCBS would have to reorganize itself as a for-profit entity, which isn’t sitting well with state regulators. Worried the deal could present anti-competitive issues and raise premiums, state regulators also question how the proceeds would be split amongst policyholders.

BCBS proposed a reorganization plan back in December last year, but was unsuccessful in swaying stakeholders.

“I’m glad it was shelved,” Senate Insurance Committee Chairman Kirk Talbot, R-River Ridge said. “That process had a lot of problems.”

BCBS has argued for the deal, stating that it would be the best way to navigate a rapidly changing healthcare landscape. The payer says the deal could allow more financial resources and flexibility to operate and expand in Louisiana, and would better member experience and benefits.

In order to go through, the deal would require approval from Louisiana’s insurance commissioner and two-thirds of BCBSLA policyholders.

The sale was also largely unpopular amongst healthcare and physicians’ groups, the state medical society even sending an open letter to policyholders urging a “no” on the deal.

Meanwhile, Elevance says it is supportive of BCBS’s decision to withdraw the plan at this time. "We will continue to meaningfully engage community members who are truly interested in better health outcomes and more affordable health care," Elevance officials said. "We remain committed to this partnership.”

Indiana-based Elevance, which operates BCBS plans in 14 states, is one of the largest insurers in the country. With its own telehealth platforms, pharmacy benefits manager and specialty physician practices, BCBS was hoping these items would help it provide better services to its Louisiana members.

If the sale is completely scraped, Elevance could scope out other potential partners.

However, during two legislative hearings about the acquisition several questions were raised concerning Elevance. Concerns over whether or not Elevance would be able to retain the 2,500 Louisiana based employees, as well as confusion over which policy holders were allowed to vote on the sale were two major pain points.

Stakeholders that have been closely following the controversial deal seemed divided on whether or not BCBS would come back with another revised plan.

The deal has been controversial from the beginning, but will it be able to gain the lawmaker support it needs to proceed in the future?