On the eve of state regulatory meetings that would decide the fate of it, Blue Cross Blue Shield Louisiana notified insurance officials that they are withdrawing their reorganization plan.
The state Department of Insurance announced late Tuesday that the company had withdrawn its plan that would have sold the company to Elevance.
In a statement, John Ford, Louisiana Department of Insurance (LDI) Deputy Commissioner of Public Affairs, said the plan had been withdrawn and the meetings - set for today and tomorrow in Baton Rouge - were cancelled.
"Late yesterday evening, Blue Cross notified the LDI that it has chosen to withdraw its Plan of Reorganization. The hearing scheduled for today and tomorrow is therefore canceled, and I currently have no information regarding Blue Cross' intentions moving forward. Any questions about why Blue Cross is withdrawing should be referred to BCBSLA," the statement reads.
For more information about the proposed transaction that has now been withdrawn, you can visit: https://ldi.la.gov/public-hearing-and-rulemaking-notices.
We got the following statement from Elevance:
"We are supportive of BCBSLA’s decision to withdraw their plan of reorganization. We will continue to meaningfully engage community members who are truly interested in better health outcomes and more affordable healthcare. We remain committed to this partnership and will work with BCBSLA on next steps in bringing that to reality."
Shortly before the withdrawal was announced, the Public Affairs Research Council of Louisiana issued this statement raising concerns about some parts of the plan:
A proposed sale of Blue Cross and Blue Shield of Louisiana to Elevance Health involves the creation of a $3 billion foundation, the Accelerate Louisiana Initiative. The Public Affairs Research Council of Louisiana has concerns about the structure of the governing board that will oversee the foundation, particularly the appointment of a board member by Louisiana’s governor.
This appointment would inappropriately give the governor influence over the distribution of investment proceeds from $3 billion in assets. Such an expansion of the power of the governor’s office, which is already too powerful, would come with none of the normal checks and balances that exist within state government.
The governor’s appointee would not be subject to state Senate oversight and confirmation. The governor’s influence on the foundation, including potentially rewarding his allies or withholding funds from adversaries, would be without review.
PAR’s concern is not specific to Gov. Jeff Landry. All future governors would have the same power to fill the spot on the board when vacancies occur.
Blue Cross Louisiana says it is seeking to sell its business to a larger Blue Cross-affiliated company to sustain its long-term economic viability; provide better behavioral health, complex and chronic care programs; and advance innovative health care technology. Critics worry about the loss of local control and jobs, premium increases and Elevance’s track record in other states.
Those concerns should be vetted and reviewed as policyholders and state officials decide whether to let the sale go forward. PAR also wants to draw attention to flaws in the creation of the Accelerate Louisiana foundation’s board.
Blue Cross agreed to add a gubernatorial appointee and a non-voting observer from the Department of Insurance after Landry raised his own concerns about the sale plans when he was a candidate for governor. PAR has far less concern with the Insurance Commissioner or his delegate serving as a nonvoting member observer, but this may create unintended consequences. For example, all documents reviewed would be subject to public records laws. While the governor’s appointee may or may not be considered a public servant, an employee of the Insurance Commissioner most certainly is.
Should it be created, the Accelerate Louisiana Initiative could benefit the state and its citizens. In its current proposed structure, however, that foundation’s potential is tainted by the influence of politics.
