Blue Cross is seeking state approval of sale to Elevance. The fight over the deal is heating up.

In two weeks, executives of Blue Cross Blue Shield of Louisiana will make their case to state insurance regulators that a $2.5 billion proposed sale of the health insurance nonprofit ought to be approved.

And as the pivotal two-day hearing, scheduled to start on Feb. 14 — Ash Wednesday — draws closer, supporters and opponents of the proposed Blue Cross sale to Indiana-based health insurance giant Elevance Health are waging an intensifying battle to sway the regulators and policyholders who get the final say.

In public letters, legal filings, publicity campaigns and formal comments submitted ahead of the hearing, Blue Cross and Elevance — along with their supporters — are arguing that the acquisition by one of the largest health insurance companies in the U.S. will put Blue Cross on firmer financial footing and bring improved services and technology to its 1.9 million Louisiana customers.

At the same time, some policyholders and influential health care associations, including the state's largest organization of physicians, say that a for-profit company from out of state won't be motivated to slow the growth of insurance premiums and could make health outcomes worse in the state.

In an "open letter to the patients of Louisiana" released Tuesday, the Louisiana State Medical Society, which represents some 4,000 physicians, came out against the sale, arguing that "sometimes 'too big' is really 'too big.'"

"It is detrimental to put your health at risk simply to achieve greater profits for a corporation," said the letter.

Blue Cross said it has met with the organization's board several times to "explain the benefits of the transaction and how it will help us improve the health of our common customers."

"We are disappointed the LSMS does not share our vision," Blue Cross said.

Déjà vu

The debate is largely a reprise of one that took place six months ago, when Blue Cross was initially set to make its case to the Louisiana Department of Insurance that it should be allowed to convert to a for-profit company.

The company delayed the deal amid concerns from state legislators and questions from then-Attorney General Jeff Landry, who is now the governor.

The broad outlines of the plan, which was re-filed in December, haven't changed. As part of the sale, Elevance, a publicly traded company that runs Blue Cross-branded insurers in 14 other states, will take over the Blue Cross brand and customer base for its different lines of insurance in Louisiana.

With the deal's proceeds, Blue Cross will create a foundation, known as Accelerate Louisiana, with a $3 billion endowment focused on improving the health of Louisiana residents.

This time around, the governor will be allowed to appoint a seat on the board, and the Insurance Commissioner will appoint a non-voting board member.

The deal must be approved by two-thirds of Blue Cross members, which is a segment of the insurer's overall customer base that has voting rights. It must also get approval from the state.

Elevance is much larger than Blue Cross, with revenues last year of more than $171 billion. Blue Cross had some $3.3 billion in revenues last year.

Blue Cross has argued that while it is strong financially, it is losing market share to bigger, national insurers in its most profitable lines of business. Blue Cross officials have said they looked at merging with other Blue Cross companies, but that Elevance offered the best deal.

Selling to Elevance will mean better coverage at lower costs because of the size, scale and digital tools Elevance has to offer, they argue.

The deal has support from area nonprofits and other major institutions, including Tulane University.

"I strongly support this acquisition and commend Blue Cross for making a bold move to secure its future and for leaving a fitting legacy through the Accelerate Louisiana initiative," Tulane President Mike Fitts wrote in a letter to the Department of Insurance last August that was resubmitted last month.

The powerful Louisiana Hospital Association, which opposed the sale last summer, has not weighed in on the revised plan.

Officials with all three of the state's largest hospital systems — Ochsner Health, LCMC Health and the Franciscan Missionaries of Our Lady Health System — declined to comment.

Legislative hearing

State legislators, however, are starting to take a renewed interest. They have scheduled their own hearing in Baton Rouge on Monday, a week before the insurance commission's hearing, to determine how the sale will impact insurance premiums for Blue Cross customers and what could happen to the company's 3,500 jobs in the state.

"Has anything changed from before?" said state Sen. Kirk Talbot, R-Metairie, who chairs the senate insurance committee and is holding the joint hearing with the senate's health and welfare committee. "That's what we want to know because my concern through this whole thing is premiums going up and jobs getting lost."

State Sen. Jeremy Stine, R-Lake Charles, who has been one of the most vocal opponents of the transaction, said he remains concerned about premium increases and cuts to services and jobs.

Blue Cross has said customers will not see any changes to their plans for the current plan year, and that Elevance has guaranteed current job levels in the state for two years.

In an interview earlier this month, Elevance Executive Vice President Morgan Kendrick said the company wants to be competitive in the state so has no reason to raise premiums beyond what other companies are charging.

Landry has not weighed in on the deal since taking office earlier this month. Liz Murrill, his successor in the attorney general's office, is still conducting the investigation into the deal Landry began last summer and had no comment, according to a spokesperson.

While the legislative hearing will preview the salient issues in the deal, and may provide some fireworks, state lawmakers do not have a say in whether the sale can go through.

Approval can only come from the state's insurance commissioner and Blue Cross members, who already have received proxy ballots in the mail.

The letter from the medical society specifically targets those voting members. In urging them to "vote NO!" the letter said the organization has heard from physicians around the country, including in the states where Elevance operates once-independent Blue Cross companies.

"They're not telling good stories in those states," said the letter, which doesn't cite specifics but alludes to the "corporate practice of medicine" and problems that has posed for patients and doctors.

Elevance has run into regulatory trouble in some of those other states where it operates. The U.S. Department of Justice is suing Elevance in New York, accusing it of fraudulent billing practices for inflating diagnoses of Medicare patients, a charge the company is fighting.

The company was also cited last summer by the U.S. Department of Health and Human Services for having some of the highest denial rates for medical treatment in the country among the 115 insurance companies that run Medicaid plans, a charge the company has also denied.

Blue Cross CEO Dr. Steve Udvarhelyi said in an interview earlier this month that his team reviewed lawsuits and allegations against the company but did not find anything that was out of the ordinary or different than what any other large, national insurers have faced.

Lawsuits

Meanwhile, a group of policyholders represented by attorney Henry "Tut" Kinney, who is also a Blue Cross policyholder, filed suit against the Louisiana Department of Insurance Monday, seeking to have Insurance Commissioner Tim Temple removed from the process.

Kinney argues Temple has a conflict of interest because of the Blue Cross proposal to expand the Accelerate Louisiana board to include a non-voting seat for the commissioner of insurance.

In a statement, a Department of Insurance spokesman said the hearing will go forward as planned and that, "we look forward to seeing Mr. Kinney's presentation then."

Kinney, on behalf of more than a dozen policyholders, has also filed suits in federal and state courts against the Department of Insurance, the Louisiana Attorney General and the Accelerate Louisiana initiative, on a variety of different legal grounds.