Opponents celebrate as Blue Cross sale hearing pushed back
A public hearing to discuss the possible sale of Blue Cross and Blue Shield of Louisiana to an out-of-state for-profit company has been pushed back from next week to October amid public criticism. Opponents, such as Baton Rouge financial advisor Tom Besselman, celebrated the news. He believes the sale to Elevance would lead to local job losses, which Blue Cross denies. “How can they say they’re not going to have job losses when you have a for-profit company buying a nonprofit?” he says. “How is that for-profit company going to get their investment back? Something’s got to change.” Michael Johnson, a former policy director for Blue Shield of California, points to a 2019 study that indicates previous conversions of nonprofit Blue Cross and Blue Shield insurers has led to average price increases of 13% when the insurer’s market share is greater than 20%. In Louisiana, Blue Cross has 98% of the market for individual coverage, an 85% share of the market for small group insurance, and 69% of the large group market, he notes.
State legislators and Attorney General Jeff Landry also have raised questions about the deal, though they have no formal role in approval, which falls to policyholders and Commissioner of Insurance Jim Donelon. Donelon is not running for reelection and is probably not concerned about political pressure, say Jan Moller, who directs the Louisiana Budget Project.
Along with the potential for price increases, Moller’s organization wants to ensure the $3 billion foundation that could be created with the sale proceeds truly serves the public interest and does not get involved in politics. In other states where this has happened, lawmakers have tried to have some oversight over the foundation, he says. “[The proposal] really hadn’t spilled into most people’s public view until this week,” Moller says. “This is certainly deserving of a longer public debate.”