Two big payer deals break up

Two proposed payer deals have been called off in the face of scrutiny from state officials. 

Blue Cross and Blue Shield of Louisiana called off its proposed sale to Elevance Health, less than 24 hours before a scheduled public hearing on the deal. On the West Coast, Portland-based CareOregon and Long Beach, Calif.-based SCAN Group said they had mutually agreed to dissolve plans to merge under the name HealthRight Group. 

Both deals faced criticism from state officials and the public. In the days leading up to BCBS Louisiana withdrawing its application to reorganize, Louisiana state lawmakers published a letter with 30 concerns about the proposed sale. The Louisiana State Hospital Association and State Treasurer also expressed opposition to the deal. 

The Louisiana State Medical Society, which represents 4,000 physicians in the state, urged patients who are BCBS policyholders to vote against the deal. 

CareOregon and SCAN Group, both nonprofit insurers, said they "mutually agreed" to withdraw their application to affiliate from Oregon regulators. 

"Our intent in coming together was to support Oregon's healthcare system and the people that CareOregon serves. However, despite our efforts, there are still questions about our combination," the companies said in a joint statement shared with Becker's Feb. 14. 

In December, Oregon's Medicaid Advisory Commission issued a memo advising the state's health authority to reject the proposed affiliation unless the insurers could answer further questions on how much local control CareOregon would retain and other concerns. 

Is bigger better? 

Elevance Health first announced its intent to acquire BCBS Louisiana in January 2023. It planned to pay $2.5 billion for the insurer with 1.9 million members. 

BCBS Louisiana said access to Elevance Health's technology and healthcare service offerings would help it more effectively serve members. 

"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," BCBS Louisiana CEO I. Steven Udvarhelyi, MD, said in a January 2023 news release. 

The Louisiana State Physicians Society said in its open letter that its members were concerned premiums would rise and benefits would be cut if the nonprofit BCBS Louisiana became part of Elevance Health. 

"Sometimes 'too big' really is 'too big.' It is detrimental to put your health at risk simply to achieve greater profits for a corporation," the society said in its letter. 

In a statement shared with Becker's Feb. 9, Elevance Health said Louisianas were "subjected to misinformation" about the proposed deal. 

"The record is clear: Elevance Health is a trusted source of health coverage to more than 47 million people across the country while Louisiana ranks dead last by almost any public measure in healthcare," the spokesperson said. 

Executives for CareOregon and SCAN previously told Becker's the proposed merger would help them compete with larger, for-profit insurers. CareOregon has more than 500,000 Medicaid managed care members, while Long Beach, Calif.-based SCAN Group has more than 285,000 Medicare Advantage members. The merger would have created an organization with $6.8 billion in revenue and nearly 800,000 members.

In December, CareOregon CEO Eric Hunter told Becker's it was "never an option" to sell CareOregon to a for-profit company, but with big tech players like Amazon, Walmart and Google entering the healthcare space, and more companies merging, CareOregon needs some kind of partner. 

"At some point there will be enough pressure in the system that we worry about our ability to continue to serve our populations like we do, with member-centric, trauma-informed care. With fair prices for our providers, with community engagement," he said. "That's my job. To protect our ability to do that not just now, but for the next 15, 20 years. That's in jeopardy with what's going on in the world." 

Some Oregon officials were uneasy with CareOregon, which only provides Medicaid in the state, joining the California-based SCAN Group. 

Former Oregon Gov. John Kitzhaber, MD, said in a December blog post that he opposed the proposed merger because it would impede on the coordinated care organization model his administration created in 2012. Under the program, Oregon Medicaid managed care insurers coordinate healthcare in a specific area and are governed by local boards. 

"The notion that [coordinated care organizations] are simply commodities to be bought and sold on the open market, reflects all that is wrong with where the U.S. healthcare system is headed today," Dr. Kitzhaber wrote. "Furthermore, it undermines a key tenet of these organizations: to look beyond the narrow clinical model and focus more broadly on community health." 

On again, off again 

In a Jan. 30 report, Bain & Co. analysts said payers will continue to leverage acquisitions in 2024 — but regulators are taking increasingly closer looks at proposed mergers and acquisitions in healthcare. 

"The margin of error has shrunk for getting the anticipated return for any M&A in healthcare and life sciences," according to Bain's article. 

BCBS Louisiana has withdrawn its application to reorganize twice in response to regulator scrutiny. The insurer pulled its application in September, after Louisiana's attorney general and other lawmakers expressed concerns about the deal, and submitted a revised proposal in December. 

In a statement shared with, a BCBS Louisiana spokesperson said on the most recent application withdrawal, "It is clear that our stakeholders need more time and information to understand the benefits of the changes we have proposed." 

A spokesperson for Elevance Health told Becker's it supports BCBS Louisiana's decision to withdraw its proposal and that it remains committed to the deal. 

"We will continue to meaningfully engage community members who are truly interested in better health outcomes and more affordable healthcare. We remain committed to this partnership and will work with BCBSLA on next steps in bringing that to reality," the spokesperson said. 

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