Hearing on Sale of Blue Cross Oct. 5-6

By Woody Jenkins, Editor, Central City News – Baton Rouge

The Board of Blue Cross of Louisiana is moving forward with its plans to sell the non-profit mutual insurance company to a for-profit mega-insurance company called Elevance (formerly Anthem).  Blue Cross has 1.9 million policy holders in Louisiana, while Elevance has 47 million policy holders nationwide.

Louisiana Insurance Commissioner Jim Donelon will hold a public hearing on the sale at 10 a.m. on Oct. 5 and 6 at 1702 N. Third St.  He has the power to approve or disapprove the sale.  If he approves it, it will still be subject to a vote by members, who would have to approve the sale by a 2/3rds vote.  

The sale has been controversial and drawn opposition from policy holders, agents, legislators, and even the Louisiana State Medical Society.

The major points of controversy are as follows:

• Theft from Policy Holders. The owners of the company are the 90,000 members. The sale price is $2.5 billion.  Yet, less than 9 percent of that amount would be distributed to the members. The rest of the sale price plus about $900 million in reserves would be turned over to a recently-formed Delaware non-profit called Accelerate Louisiana Initiative to distribute as it desires.

Some Blue Cross policy holders have likened this use of funds as nothing less than theft. Attorney Henry Kinney said the proposal is “dishonorable” and “a usurpation of the rights of policy holders.”

Kinney said, “These assets belong to the members. The Board of Blue Cross wants to turn these funds over to a self-appointed, self-perpetuating board of a new foundation — funds that belong to the members!

•Destruction of a Louisiana Company.  Blue Cross is a Louisiana company with Louisiana owners and 3,500 Louisiana citizens as employees.  Critics say the new owners will make their decisions out of state and can be expected to move offices out of state and “trim” the number of employees.

• Service Problems. Policy holders and providers of Elevance in other states report delays in payment and approval of procedures.  Many physicians report widespread dissatisfaction with Elevance. 

•If It Ain’t Broke, Don’t Fix It. There is a belief among policy holders that Blue Cross is working well for them with a non-profit model based in Louisiana.  So why change it?

Policy holders and members of the public had the opportunity to file public comments with the Commissioner through Sept. 18. 

Those comments can be found at https://www.ldi.la.gov/bcbs-hearing-public-comments

Two of those who filed comments in opposition to the sale were the Louisiana State Medical Society and the Central City News. The comments of the medical society are found on Page 17.

The Central City News filed a request with the Commissioner asking him to reform the voting procedures Blue Cross is using to secure approval of the proposed sale.

The newspaper said Blue Cross sent out mail ballots with very one-sided information about the sale, and also attempted to get member approval by telephone and by voting online. The newspaper said, “These decisions involve billions of dollars and the health care of nearly 2 million Louisianians. If there is a vote, it should be fair.  We ask that if you allow an election to be held that you issue an order that would include the following features:”

“Appoint a group of three opponents of the sale to draft a one sheet, front and back, to be included in the materials sent the policy holders fairly describing the arguments against the sale. That the group of opponents be approved to receive proxies from members and be allowed to submit those at the policy holders meeting.”

“That voting be similar to mail-in voting in Louisiana, where a ballot must be placed within an inner and outer envelope, which would have to be signed by the member with his mother’s maiden name, and witnessed by another person. That voting by any other means except by mail or in-person be prohibited.

“We ask that you issue an order directing that the procedures outlined above be followed.”

The Commissioner is not expected to issue a decision until several days or weeks after the hearing.