Elevance Health's $2.5 billion bid to acquire Blue Cross and Blue Shield of Louisiana is on hold again, the companies announced Wednesday.
The health insurers proposed the transaction in January 2023 but encountered resistance in Louisiana. Nonprofit Blue Cross and Blue Shield of Louisiana and for-profit Elevance already backed off the deal in September, only to try again in December.
Related: Elevance, Blue Cross of Louisiana revive $2.5B acquisition bid
"It is clear that our stakeholders need more time and information to understand the benefits of the changes we have proposed. This is why we have decided to again pause the process in our proposed transaction with Elevance Health," Blue Cross and Blue Shield of Louisiana said in a news release Wednesday.
"We continue to believe we need a strong partner to help position us for a vibrant future, and to help us make healthcare more affordable and to help us do more to improve the health of members and policyholders. However, now is not the right time to make this bold step," Blue Cross and Blue Shield of Louisiana said.
The Blue Cross company informed the Louisiana Department of Insurance that it would withdraw its request for regulatory approval Tuesday, on the eve of now-canceled public hearings scheduled Wednesday and Thursday, the agency said in a news release Wednesday. "I currently have no information regarding Blue Cross' intentions moving forward," Department of Insurance Deputy Commissioner of Public Affairs John Ford said in the news release.
Elevance Health, which sells Blue Cross and Blue Shield policies in 14 states, will continue to pursue the transaction. “We remain committed to this partnership and will work with BCBSLA on next steps in bringing that to reality,” the company said in a statement.
The proposed acquisition, which would transform Blue Cross of Louisiana into a for-profit company, attracted criticism from policymakers, providers and Blue Cross and Blue Shield of Louisiana members who expressed concern about its effects on costs and competition. The Blue Cross carrier has 1.9 million commercial, Medicaid and Medicare policyholders. In 2022, the insurer had a 66% market share in the Pelican State, according to the American Medical Association.
The Louisiana State Legislature held a hearing on the deal last week and Gov. Jeff Landry (R) spoke out against it during his campaign last year.
“From the beginning, we recognized that any transaction such as this would be disruptive to the healthcare landscape of the state," Landry said in a news release Wednesday.
Blue Cross and Blue Shield of Louisiana characterizes the Elevance deal as necessary to sustain its mission. "We continue to hear from our stakeholders that they want Blue Cross and Blue Shield of Louisiana to remain their trusted partner in their healthcare journey, and we pursued this transaction to help us do exactly that—by changing for the better," the company said in the news release.
The insurers planned to establish a multibillion-dollar foundation called the Accelerate Louisiana Initiative to address health inequities as part of the acquisition.
The Louisiana insurer called off a policyholder meeting planned for Feb. 21, according to the insurance department. Two-thirds of the company's members would have to approve a sale.
