Week in Review, Jan. 23-27: Louisiana’s Largest Health Insurer Sold
NEW ORLEANS — On Jan. 23, Blue Cross and Blue Shield of Louisiana, the state’s biggest provider of health insurance, announced that it has entered into an agreement to be acquired by Indianapolis-based Elevance Health Inc. Financial terms were not disclosed.
BCBSLA will join Elevance Health’s affiliated Anthem Blue Cross Blue Shield family of brands. The two companies also jointly own Healthy Blue, a health plan for Medicaid that works with over 13,000 doctors and 160 hospitals in the state.
The acquisition of BCBSLA, which has more than 1.9 million members, is expected to be complete in 2023.
“For almost a century, Blue Cross and Blue Shield of Louisiana has focused on its mission of improving the health and lives of Louisianians,” wrote BCBSLA President and CEO I. Steven Udvarhelyi in a message announcing the acquisition. “As we all know, healthcare has changed dramatically during the last 90 years and we have evolved to respond to the changing healthcare landscape so that we can continue to fulfill our mission.”
In the letter, Udvarhelyi said the increased scale will allow the company to stay competitive — and he announced that proceeds from the transaction will fund a multi-billion dollar foundation that will “focus only on the unique and complex needs of Louisianians.”
Here are more of the week’s top business stories:
Louisiana Gov. John Bel Edwards on Sunday called for a special legislative session to address the state’s property insurance crisis. The gathering is set to begin Jan. 30 and end no later than Feb. 5. Louisiana continues to be plagued by insurance woes, with insurers leaving or going out of business in the hurricane-stricken state. Insurance Commissioner Jim Donelon wants the Legislature to allocate at least $45 million into a newly created incentive fund aimed at luring insurance firms to the state. While lawmakers and Edwards hoped to address the situation during the regular legislative session in April, Donelon said it couldn’t wait. In order to attract insurance companies to Louisiana, they would have to get reinsurance, which is coverage bought to help ensure they can pay out claims. However, companies need to get reinsurance ahead of hurricane season, which starts June 1. “While Commissioner Donelon says we must do this now, this is just a first step in addressing Louisiana’s ongoing insurance issues after the devastating hurricane seasons of 2020 and 2021, a crisis worsened by hurricanes and wildfires in other states in 2022,” the governor said in a statement, obtained by The Advocate.
On Jan. 17, the HBAGNO board of directors approved a “Resilient Roofing” resolution designed to enhance long-term housing resiliency and attract property insurance carriers to coastal Louisiana. Over the past several years, the state has experienced numerous storms, including Laura, Delta, Zeta and Ida, which have impacted Louisiana’s coast and damaged several hundred thousand Louisiana homes, costing billions of dollars of losses, with roof failure being by far the most common cause of damage. As a result, the insurance industry has sustained crippling losses, forcing many companies into bankruptcy, and very few financially viable insurance carriers remain to insure Louisiana’s homes. Consequently, the cost of homeowners insurance in Louisiana has become unaffordable for Louisiana families, particularly in the hurricane wind zones of coastal Louisiana. With the support of the HBAGNO, Louisiana recently adopted the 2021 IRC Code, which requires more rigorous roof construction standards, secondary leak protection and sealed roof decks, for the first time in Louisiana State Uniform Construction Code history. These new construction codes went into effect on Jan. 1, 2023 and represent the most resilient code requirements on the Gulf Coast.
The Idea Village has announced the 13 startup companies that will participate in the 2023 VILLAGEx high-growth accelerator program. The four-month, cohort-based accelerator “leverages the passion and expertise of New Orleanians around the globe to provide founders with the connections and resources needed to scale their businesses rapidly,” said a spokesperson. “The goal of the VILLAGEx accelerator program is to identify the entrepreneurs who are the future business leaders for our region and give them the tools needed to grow their companies,” said Jon Atkinson, CEO of The Idea Village, in a press release. “The results will be more good jobs, more investment in our city and more economic opportunity for the Gulf South.”
Saints legend Deuce McAllister has partnered with local businessman Jason White to launch FRYP, a fundraising platform that joins forces with small businesses to create products that can be sold online. New Orleans Roast Coffee and Buttermilk Drop Bakery are two of the venture’s providers. FYRP’s first fundraising partner is Louisiana Hospitality Foundation, which will launch its first FRYP-powered campaign at the end of January. All products available for purchase will be made by locally owned small businesses in New Orleans. “Fundraising is a critical but difficult aspect for any organization, which is why we sought to create FRYP to promote local organizations and small businesses while simplifying the process of gathering the funds and selling products,” said McAllister, who is the startup’s co-founder and vice president.