Blue Cross Halts $2.5B Sale to Elevance for the Second Time Amid Regulatory Concerns

BATON ROUGE, Louisiana – Blue Cross Blue Shield’s proposed $2.5 billion sale to Elevance Health has hit another roadblock, halting the deal less than 12 hours before regulatory hearings were scheduled to take place. This is the second setback for the sale, with Blue Cross citing regulatory and stakeholder concerns for the pause.

The potential sale, which would have been the largest healthcare deal in the state’s history, has stirred controversy and faced opposition from state regulators and healthcare stakeholders. Blue Cross, operating in all 50 states, is Louisiana’s largest insurer with 1.9 million members. The proposed reorganization of Blue Cross as a for-profit entity has raised concerns about anti-competitive issues and potential premium increases, as well as questions about the distribution of proceeds among policyholders.

Despite Blue Cross arguing that the deal would provide more financial resources and flexibility to operate and expand in Louisiana, gaining approval from Louisiana’s insurance commissioner and two-thirds of BCBSLA policyholders is necessary for the deal to proceed.

The sale has also faced backlash from healthcare and physicians’ groups, with the state medical society urging policyholders to vote against the deal. Elevance, on the other hand, has expressed support for Blue Cross’s decision to withdraw the plan, stating they remain committed to the partnership.

Elevance, based in Indiana and operating BCBS plans in 14 states, is one of the largest insurers in the country. The company’s own telehealth platforms, pharmacy benefits manager, and specialty physician practices were seen as potential assets to improve services for Louisiana members, but questions have been raised concerning the retention of 2,500 Louisiana-based employees and confusion over which policyholders can vote on the sale.

Stakeholders closely following the controversial deal remain divided on whether Blue Cross will come back with another revised plan, leaving the future of the proposed sale uncertain.