Jim Beam column: Blue Cross sale questioned
Published 6:55 am Wednesday, August 23, 2023
The $2.5 billion sale of Blue Cross and Blue Shield of Louisiana to a company named Elevance Health seemed to be sailing along smoothly until some legislators and policyholders got more information on what was happening.
As one of its 1.9 million Louisiana policyholders, I got a thick packet of information from the company. It had more detail than I was interested in reading and a postage-paid envelope in which to return my voting ballot.
A local attorney, who is also a Blue Cross and Blue Shield policyholder, emailed me about his concerns. So I collected some information and did a story about three meetings to discuss the sale.
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One was a meeting of the Joint Legislative Insurance Committee last Wednesday to discuss the sale and the second was a two-day hearing at the state Department of Insurance on Aug. 21 and Aug. 22.
The third was a meeting of voting members scheduled for Sept. 9 at the Blue Cross headquarters in Baton Rouge. State Insurance Commissioner Jim Donelon has to approve the sale along with two-thirds of voting policyholders.
Republican state Sen. Jeremy Stine of Lake Charles is a member of the Joint Legislative Insurance Committee. Stine took an active part in grilling Blue Cross officials at the meeting that lasted nearly six hours.
The net result of that meeting was postponement of the two-day Department of Insurance hearing to Oct. 5-6, which would also delay the Sept. 9 meeting of Blue Cross voting members.
David Caldwell, executive director of the state insurance department, said Blue Cross requested the delay. He said it was because the company needed more time to address concerns about the deal raised in an independent consultant’s report.
Cindy Wakefield, a Blue Cross spokesperson, at the legislative meeting said, “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 Louisianans. We will continue our conversations to ensure this acquisition is beneficial.”
Wakefield said the delay is designed to make sure stakeholders had more time to understand the sale’s benefit. “We will continue our conversations to ensure this acquisition is beneficial, data-driven, and transparent,” she said.
Dr. I. Steven Udvarhelyi, Blue Cross and Blue Shield president and CEO, told Forbes magazine in January the sale to Elevance will help the insurer “to remain strong in today’s environment with an ability to provide leading innovation, products, and capabilities.”
Blue Cross has said a fraction of the sale’s proceeds would go to policyholders. Those are employers and people who have purchased plans individually, and not all of the 1.9 million policyholders. They would receive $307 million, which is about $3,000 per policyholder.
The rest will go to a health foundation, Accelerate Louisiana, along with an additional $1 billion from Blue Cross reserves. Blue Cross officials said the mission of the foundation is to improve the lives and health of the people of Louisiana who have some of the worst health outcomes in the nation.
Tim Barfield, Baton Rouge businessman and attorney, and chairman of the Blue Cross board, told The Advocate there are many unanswered questions about the foundation and how it will operate.
”We have a lot to do and it’s going to take a couple of years to ramp up,” Barfield said. ”But we want to do it right. We need to choose a board, put a strategic plan in place, identify priorities. We also want to have the right level of community partners and engagement to help us design and execute.
”Getting it right will take time,” he said.
Stine said the 1.9 million Blue Cross and Blue Shield of Louisiana policyholders will have no say over how the foundation operates. He said he also wants them to be aware of the $1 billion in fines levied against Elevance for 476 penalties.
The $100,000 that each of the Blue Cross directors receive each year, Stine said, will continue for the next 10 years if the deal goes through.
“Did Blue Cross choose the right company to acquire them?” Stine asked.
The delayed hearings may be helpful in answering that question and many others that have been asked about the sale of Blue Cross and Blue Shield. A number of large sales like this one have resulted in higher costs, reduced benefits and other changes people don’t like.
The 1.9 million Blue Cross and Blue Shield policyholders deserve to know with certainty whether the health care coverage they have come to know and appreciate will continue.