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Blue Cross Blue Shield

Unified Opposition Derails Blue Cross's Move to For-Profit Model

In a dramatic turn of events, Blue Cross has withdrawn its reorganization plan, which was previously thought to be unstoppable, following widespread opposition from key figures and organizations in Louisiana. The plan, initiated last year, aimed to transform Blue Cross from a non-profit, member-owned mutual insurance company into a for-profit entity owned by Elevance (formerly Anthem), an out-of-state company with a track record of more than $1 billion in fines and a current lawsuit for fraud by the U.S. Department of Justice.

The plan's downfall began with significant resistance from State Treasurer John Fleming, M.D., who, speaking at the Ronald Reagan Newsmaker Luncheon, criticized the proposal for potentially leading to higher premiums, reduced coverage, and poorer quality care. Fleming's opposition, widely publicized, marked the first major political challenge to the plan.

The Louisiana Senate played a pivotal role in scrutinizing the proposal. In a joint hearing of the Senate Health and Welfare Committee and the Senate Insurance Committee, senators conducted a thorough examination of the plan, bringing to light many previously undisclosed details. Their subsequent report, issued on February 8, coincided with Fleming's statement and contributed to mounting public discourse against the reorganization.

Simultaneously, legal challenges were underway. Attorney Tut Kinney, who had sued Blue Cross in August to halt the plan, was in the process of deposing key figures involved, including Blue Cross CEO Dr. Steve Udvarhelyi. The plan's structure, which proposed allocating the sale proceeds and a significant portion of the company's unrestricted reserves to the Accelerate foundation instead of its 92,000 members, was a major point of contention.

The media played a crucial role in amplifying the opposition. Radio commentator Moon Griffon consistently criticized the plan, despite Blue Cross's substantial advertising investment in his show. The Central City News was at the forefront, breaking the story in August following Kinney's speech at the Ronald Reagan Newsmaker Luncheon.

Political responses were mixed, with Governor Jeff Landry initially appearing opposed but later adopting a neutral stance. However, the decisive blow came from Attorney General Liz Murrill, whose forceful letter to Insurance Commissioner Tim Temple prompted Blue Cross's withdrawal of the plan.

Reflecting on the plan's collapse, State Treasurer Fleming attributed it to a lack of support and the power of informed public opinion. He emphasized that the widespread opposition, rather than any singular effort, was key to derailing the proposal.

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