Elevance Health is delaying its $2.5 billion purchase of Blue Cross and Blue Shield of Louisiana, citing the need for more time to address stakeholder questions regarding the companies’ reorganization plan. The acquisition, aimed at expanding Elevance Health’s health insurance offerings, was withdrawn from the Louisiana Department of Insurance application process. Mergers within the Blue Cross network are complex. Proceeds from nonprofit sales often go to not-for-profit causes. Elevance Health reaffirms its commitment to improving Louisiana’s health outcomes through the partnership with BCBSLA.
Elevance Health has decided to postpone its $2.5 billion acquisition of Blue Cross and Blue Shield of Louisiana. The initial announcement of this deal was made in January of this year, to incorporate 1.9 million health plan customers and expand Elevance Health’s range of affiliated health insurance plans under the Anthem Blue Cross Blue Shield brand into another state market. Elevance Health, the nation’s second-largest health insurer boasting 48 million subscribers, currently holds Anthem-branded Blue Cross and Blue Shield plans in 14 states.
However, due to the need for further discussions among various stakeholders regarding the “plan of reorganization” for these health insurance companies, Elevance Health has withdrawn its acquisition application from the Louisiana Department of Insurance.
In a statement issued on Tuesday night, Elevance Health acknowledged the common theme emerging among key stakeholders, which is the desire for more time to address questions about the plan of reorganization. The statement reads: “Since we are committed to ensuring these questions are thoroughly addressed, both BCBSLA and Elevance Health have decided that it is not the appropriate time to proceed with 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 additional time for key stakeholders to comprehend the benefits that this transaction will bring to the people of Louisiana and how the high-quality services, which our stakeholders have come to appreciate, will be upheld.”
Mergers and acquisitions within the Blue Cross and Blue Shield network tend to be intricate and time-consuming due to varying ownership structures. It is common for the proceeds from the sale of nonprofit or mutual-owned health insurers to be directed toward not-for-profit foundations or charitable organizations when transitioning to publicly traded and investor-owned companies like Elevance Health. This approach ensures that the original mission of the mutual or nonprofit entity continues in some capacity.
In the case of Blue Cross and Blue Shield of Louisiana, a private mutual company owned by policyholders and established in New Orleans in 1934, Elevance Health and BCBSLA entered into this agreement with a shared objective of enhancing health outcomes and the overall well-being of the people of Louisiana. They intended to achieve this by introducing new programs while maintaining the highest quality of services that BCBSLA stakeholders have relied on for decades. Elevance Health expressed its unwavering commitment to realizing these goals, emphasizing that the partnership between BCBSLA and Elevance Health remains the right one at the right time, striving for the best health outcomes that the people of Louisiana both need and deserve.
