With more than 1 million members, Blue Cross and Blue Shield of Louisiana is the largest Blues affiliate in its home state and the second-largest insurer overall, behind UnitedHealthcare. Founded in 1934 as the Hospital Service Association of New Orleans, BCBSLA is now the 19th largest Blues insurer in the U.S. While the majority of its customers are employer groups, the insurer also offers coverage on the Affordable Care Act exchanges in Louisiana, as well as Medicare Advantage (MA) plans. It dominates Louisiana’s individual and group risk-based commercial markets, holding 88.5% and 74.5% of overall market share, respectively. Cigna Corp.’s Express Scripts currently serves as BCBSLA’s pharmacy benefits manager.
Elevance Health (fka Anthem, Inc.) on Jan. 23 unveiled plans to acquire BCBSLA. It is the first major Blues consolidation deal in more than a decade and will boost Elevance’s presence in the state by nearly 300%, according to AIS’s Directory of Health Plans (DHP). The move may trigger more Blues affiliates to follow suit, industry experts told AIS’s Health Plan Weekly in a Jan. 27 article. “I think…it’s probably time for the industry, especially on the Blue side, to consolidate a bit more,” Ashraf Shehata, national sector lead for health care and life sciences at KPMG, said. Other Blues insurers may see Elevance as an attractive option for a parent company, Shehata continued, as “many of them are going through major upgrades in their claims infrastructure, their customer support systems, call centers.…We’ve seen this wave of back-office modernization, and that takes capital intensity. I can’t imagine every Blue plan going through that same capital expenditure if there’s a way to get some economies of scale across the country.” Shehata is a former Anthem executive.
The two insurers are already joint owners of Healthy Blue, a Louisiana Medicaid plan that serves approximately 370,000 members (that membership is reflected in Elevance Health’s record in DHP). The companies also plan to create a foundation, the Accelerate Louisiana Initiative, which will aim to address health inequities in the state. Financial terms of the deal, which if approved by regulators is expected to close by the end of 2023, were not disclosed.
SOURCE: AIS’s Directory of Health Plans as of January 2023; MMIT Analytics as of 1Q 2023.