Elevance to Acquire Louisiana Nonprofit Health Insurer

The mix could also be difficult by the Louisiana insurer’s standing as a nonprofit mutual. The Louisiana firm has about 1.9 million members, which it says is roughly a 3rd of the state’s inhabitants.

The businesses stated they anticipated the deal to shut later this 12 months.

In a press release, Elevance Chief Govt

Gail Boudreaux

stated the businesses “will mix strengths to supply companies distinctive to the wants of Louisiana to raised serve members by way of an entire well being customized strategy.” Elevance is the father or mother of Blue Cross Blue Defend plans in 14 states, and it had about 47.3 million members on the shut of the third quarter of 2022. 

Analysts from S&P World Scores stated the Louisiana insurer had income of roughly $4.5 billion and internet revenue of about $101 million in 2021, figures a Blue Cross and Blue Defend of Louisiana spokeswoman confirmed in an electronic mail. 

In a March report, the rankings agency gave the nonprofit an “A” score and estimated that the 2022 income determine could be roughly $4.5 billion to $4.7 billion. The Louisiana insurer had a dominant place within the state’s business market and has been including to its authorities enterprise, partly by way of a partnership with Elevance, the report stated.

The Blue mixture is smart for Elevance, stated James Sung, an analyst with S&P World Scores. “It is a solution to get into Louisiana whereas retaining that model, which holds loads of worth for the long run,” he stated. For the Louisiana insurer, the deal will convey better scale and entry to Elevance’s expertise and different sources.

There are 34 Blue Cross Blue Defend firms, which have rights to make use of the Blue manufacturers in sure geographies. Most are nonprofits, sometimes centered on a single state, and so they have largely sidestepped the consolidation that has left the managed-care trade with large nationwide gamers. The brand new mixture will draw shut scrutiny, Mr. Sung stated: “Folks might be watching this deal to see if it really works.”

Elevance’s newer transactions have largely centered on including new capabilities, because it builds up its healthcare-service choices beneath the Carelon model. As an illustration, in 2021 it closed a deal for myNEXUS, which manages residence care.

Write to Anna Wilde Mathews at Anna.Mathews@wsj.com