Local senator digging into Blue Cross Blue Shield proposed buyout
Published 8:22 am Friday, August 18, 2023
State Sen. Jeremy Stine is concerned the promise of $3,000 to Blue Cross Blue Shield of Louisiana policyholders for a “yes” vote on the company’s proposed sale, might keep them from looking at the big picture.
He wants policyholders aware of fines against Elevance, which is the company wanting to buy out Blue Cross; monies that will leave the state over which policyholders will have no control; and the $100,000 the Blue Cross Board of Directors receive each year and will continue to receive for the next 10 years if the deal goes through.
“Thankfully, we have concerned citizens who have contacted me about this deal,” he said.
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Those concerns led to the convening of a special oversight hearing. Stine is one of the legislators who grilled Blue Cross officials during a six-hour session Wednesday over the terms of a deal to sell the Baton Rouge-based nonprofit to a for-profit, and create a multi-billion dollar foundation with the proceeds.
The buyout plan, according to Stine, should be required to protect the interests of the public, as well as the policyholders — and this plan falls short.
“It stinks,” he said. “1.9 million Louisianians and the general public will be impacted by the proposed acquisition,” he said. “We should not rush this process.”
Since the year 2,000, Anthem, now Elevance, has been levied with nearly $1 billion in fines for a total of 476 penalties, and that raises the question: Did Blue Cross choose the right company to acquire them?
By law, Elevance has to make sure the “plan of reorganization serves the best interest of policyholders and members, and this deal does not. 92,000 policy holders get to vote. 1.9 million members have no voice in the matter.
Of the 3.4 billion purchase price, policyholders get a piece of the $307 million, $3,000 if they vote yes.
A foundation in Delaware will receive $2.44 billion. Blue Cross has $1.8 billion in reserves and almost half of those reserves will go toward this Foundation. The 1.9 million Blue Cross Blue Shield of Louisiana policyholders have no say over how it operates and how much money goes back into the Foundation.
“It’s extremely concerning that the 1.9 million members will lose their membership interests,” Stine said, “and the board of directors who currently receive $100,000 per year will continue to receive $100,000 per year for the next ten years if this deal goes through.”
For a move that affects so many, the voting hasn’t been very transparent.
“They have been calling voting policy holders and asking them if they intend to vote “yes,” and the public has no idea what the vote is at Blue Cross Blue Shield,” he said. “The company needs two-third majority vote as well as Commissioner Donelon’s approval.”
Stine said he has not seen the contract, but has seen the wording on the ballots. It makes assurances for the current plan year, not subsequent years.
Stine said he can appreciate companies wanting to scale, to improve and properly use network effects. However, ambiguous talk of “creating efficiencies,” concerns him.
“As we know, sometimes that means cutting the labor force and increasing premiums.”
He wants to see the vote delayed by Commissioner Donelon. He wants the public to understand what’s going on, and he’d like to see policy holders ask questions, call his office if needed. Email him at email@example.com or call 337-491-2984.