Lawmakers publicly scrutinize deal to sell Blue Cross to Elevance Health
NEW ORLEANS (WVUE) - State lawmakers spent six hours questioning executives of Blue Cross Blue Shield of Louisiana over the planned sale of the company to Elevance Health of Indiana.
The legislature’s Joint Committee held a hearing to get details about the proposed sale of BCBS, which is the largest healthcare insurer in Louisiana.
Steven Udvarhelyi, M.D. is CEO of Blue Cross Blue Shield. He explained that Elevance is formerly Anthem.
“As you may know, it’s a new name. They previously were Anthem. They are the parent company of the Blue Cross and Blue Shield plans in 14 other states,” said Udvarhelyi.
BCBS is a not-for-profit company, and Udvarhelyi said having Elevance, a for-profit company, buy BCBS will benefit policyholders.
“The reason that we are bringing these companies together is our belief that this plan of reorganization will give us access to capabilities and services that we simply cannot get on our own and we find ourselves increasingly at a disadvantage with our competitors here in Louisiana who have access to greater resources, greater access to capital than we do,” he said.
Udvarhelyi said no jobs would be lost as a result.
“We will remain a local company with a strong local presence, our offices will stay the same, our overall employment levels will stay the same. There will be no layoffs with this transaction,” he said.
But some lawmakers and members of the public are concerned about what impact the sale would have on insurance premiums and policyholders’ choices of doctors.
“Bigger doesn’t always turn out to be better, in terms of customer service and that’s my personal opinion,” said Sen. Fred Mills, a Republican from New Iberia.
Sen. Kirk Talbot, R-River Ridge, chairs the Senate Insurance Committee and chaired the hearing.
“We’re going from a non-profit to profit, how does that better serve our public without their rates going up, now this company’s got to make a profit, right? So, I mean are rates going to go up?” Talbot asked.
Udvarhelyi replied, “So, I actually think that the transition from not-for-profit to profit won’t impact premiums, at all, I mean we don’t anticipate premiums going up.”
Then during later questioning, Udvarhelyi revised his answer.
“We would want to be careful not imply to that there won’t be the normal premium changes. We have premium changes increases every year,” he said.
Walter Lane, Ph.D., a University of New Orleans health care economist weighed in on the deal.
“This is Blue Cross of Louisiana, although it’s far and away the biggest insurer in the state compared to Cigna and United and Travelers and the other national companies, it’s a small company,” said Lane.
He doubts BCBS being merged into Elevance Health would result in major changes for most policyholders.
“The name on their card is going to change but I think otherwise they’re still, Blue Cross is going to be headquartered in Baton Rouge, they’re still going to be negotiating with the providers in the state the same way they did, I don’t see that most people are going to see much change,” said Lane.
Lane does not believe that a sale would impact Blue Cross Blue Shield of Louisiana’s bargaining power with hospitals.
“This isn’t going to affect that at all because they already are the biggest insurer in the state and so they already have as much bargaining power as they’re going to have,” said Lane. “Theirs is hopefully they think they’re going to get some more economies of scale about being part of a big organization. I think it has more to do with them bargaining the pharmaceutical companies, in terms of the prices they get.”
Still, he points to BCBS’ earlier argument for being a not-for-profit company.
“But my question is, Blue Cross has always been adamant about how important it is that they’re a not-for-profit and that makes them different from everybody else, but now they’re saying, oh, now that’s not important we’re going to be just the same. Well, either it was important or it’s not important,” said Lane.
The Louisiana Department of Insurance and policyholders get to weigh in on the deal as well.
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