Despite delays in regulatory approval, Elevance Health remains confident in its $2.5 billion deal to purchase Blue Cross and Blue Shield of Louisiana.
Elevance Health, a prominent insurance company, is still committed to acquiring Blue Cross and Blue Shield of Louisiana, despite recent setbacks in obtaining regulatory approval. During a conference call to discuss its quarterly earnings, Elevance CEO Gayle Boudreaux expressed confidence in the company’s ability to close the acquisition. She mentioned that Elevance is actively working with state regulators and local stakeholders to address concerns about the deal.
The Baton Rouge-based Blue Cross officials had previously withdrawn their application for state approval in late September, citing growing concerns from policyholders, local politicians, and Louisiana Attorney General Jeff Landry, who is now governor-elect. The company stated that it plans to refile its application later this year or in early 2024. Landry had raised concerns about whether the deal was in the best interest of policyholders and believed that a new governor, Commissioner of Insurance, and state legislators should be in office before approving such a significant deal.
Blue Cross and Blue Shield of Louisiana provides health insurance to over 1.9 million people in the state, with approximately 92,000 policyholders. The deal requires approval from the Louisiana Department of Insurance and two-thirds of Blue Cross policyholders.
Elevance is a publicly traded company with a market value of nearly $110 billion and is headquartered in Indianapolis. During its earnings call, the company highlighted its strong third-quarter performance, with revenues increasing by more than 7% year over year. However, Elevance also addressed concerns about its Medicare Advantage and Prescription Drug Plan for seniors, as the company’s recent ratings from federal regulators have declined. The Center for Medicare and Medicaid Services rates these plans on a scale of one to five, with five being the highest level of performance. Elevance’s largest Medicare Advantage contracts saw their ratings drop from 4.5 stars to 3.5 stars in the most recent rankings. Boudreaux expressed disappointment in the decline, particularly in member satisfaction with access to appointments and care.
To mitigate the effects of the ratings decline, Elevance is exploring all options. The lower star ratings will result in a decline in bonus payments from the federal government, which will impact the company’s revenues.
In conclusion, Elevance Health remains confident in its ability to complete the $2.5 billion acquisition of Blue Cross and Blue Shield of Louisiana, despite facing delays in regulatory approval. The company is actively working with state regulators and local stakeholders to address concerns about the deal. Additionally, Elevance is addressing declines in its Medicare Advantage and Prescription Drug Plan ratings and exploring options to mitigate the impact on its revenues.
