The merger comes amid growing concern that healthcare consolidations among payers and providers are driving up costs.
Elevance Health, Inc. will buy Blue Cross and Blue Shield of Louisiana and put the health insurer under its multistate Anthem umbrella, the payers announced Monday.
Financial terms were not disclosed.
The deal is expected to close this year, pending regulatory approval, and nonprofit BCBSLA, which serves about 1.9 million Louisianans, roughly one-third the state's population, will become an affiliate of Elevance's Anthem Blue Cross Blue Shield network, which now operates plans in 14 states covering about 47 million people.
"Elevance Health and Blue Cross and Blue Shield of Louisiana will combine strengths to provide services unique to the needs of Louisiana to better serve members through a whole health personalized approach," Elevance President / CEO Gail Boudreaux says in a media release.
"As organizations aligned in our missions, we are excited at the opportunity to bring our leading, innovative whole-health solutions to BCBSLA's members as we work together to become a lifetime, trusted health partner," she says.
The proposed merger comes amid growing concern that healthcare consolidation among payers and providers is driving up the cost of healthcare. A 2022 report by the American Medical Association found that “that the majority of health insurance markets in the United States are highly concentrated.”
“Coupled with external evidence on their anticompetitive behavior, this strongly suggests that health insurers are exercising market power in many parts of the country and, in turn, causing competitive harm to consumers and providers of care," the AMA report concluded.
As mergers in the healthcare sector involve larger and larger players, payers and providers blame each other for concurrent rising healthcare costs, each side saying they need a bigger footprint when negotiating prices with one another. Ultimately, of course, it is the consumer who foots the bill.
HealthLeaders' Emails Monday afternoon to Elevance and BCBSLA asking for the financial details and the potential effect on consumers were not returned.
Boudreaux says the acquisition builds on an existing joint ownership the two payers share for Healthy Blue, which serves the Louisiana's Medicaid and Medicare Dual Eligible enrollees.
The payers say the acquisition will also allow BCBSLA to access Carelon, Elevance's healthcare services organization that specializes in behavioral health, complex and chronic care programs, and innovative digital models.
Steven Udvarhelyi, MD, president / CEO of BCBSLA says the sale of the 90-year-old company was needed to "remain strong in today's environment with an ability to provide leading innovations, products and capabilities."
"We concluded that we needed a partner that could help us deliver these faster and better than we could alone," Udvarhelyi says. "Aligning with Elevance Health - a national health care organization that has been our trusted partner since 2017 - will allow us to accelerate our mission of improving the health and lives of Louisianians,"
When the deal is finalized, BCBSLA headquarters will remain in Baton Rouge and keep its workforce of about 3,000 employees.
The payers say the deal will also create "a multibillion-dollar foundation, the Accelerate Louisiana Initiative."
"This foundation is being created to address the unique and complex needs of the people of Louisiana with the mission to improve the health and lives of the people of Louisiana by addressing health inequities and strengthening local communities," the companies say.
“Elevance Health and Blue Cross and Blue Shield of Louisiana will combine strengths to provide services unique to the needs of Louisiana to better serve members through a whole health personalized approach.”
Elevance President / CEO Gail Boudreaux
John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.
The deal is expected to close this year. Financial terms were not disclosed.
BCBSLA will become an affiliate of Elevance's affiliated Anthem Blue Cross Blue Shield plans, which now operate in 14 states.
The acquisition builds on a joint ownership the two payers share for Healthy Blue, Louisiana's safety net plan.