Kansas Supreme Court Upholds Ruling Blocking Sale of BlueCross BlueShield of Kansas to Anthem
The Kansas Supreme Court on Aug. 6 reaffirmed a 2002 order blocking the $190 million sale of Blue Cross and Blue Shield of Kansas to for-profit Anthem, the AP/Richmond Times-Dispatch reports (AP/Richmond Times-Dispatch, 8/7). Shortly after the ruling, Anthem spokesperson Edward West said the company will not continue attempts to acquire BCBS Kansas because there is "no other legal recourse" (Swiatek, Indianapolis Star, 8/7). The Supreme Court ruling upholds a 2002 decision by former state insurance commissioner Kathleen Sebelius (D), now the governor of Kansas. In an unsigned opinion, the court wrote, "We give deference to the commissioner's interpretation and find that is it reasonable" (AP/Richmond Times-Dispatch, 8/7). Sebelius in February 2002 blocked the proposed sale after an independent review team determined that the merger would raise premiums by $248 million over the next five years; the insurance companies disputed that decision. Shawnee County District Judge Terry Bullock in June 2002 ordered that Sebelius conduct another review of the acquisition (Akers, AP/Orlando Sentinel, 6/7/02). However, Sebelius instead appealed Bullock's decision to the Supreme Court (Indianapolis Star, 8/7). BCBS of Kansas, which has about 400,000 members and holds about 45% of Kansas' health insurance market, has been facing the "challeng[e]" of offering affordable coverage despite a shrinking membership, according to the Wichita Eagle (Jacobs Griekspoor, Wichita Eagle, 8/7). Indiana-based Anthem, the fifth-largest publicly-traded health insurer in the United States, had said that it could have reduced BCBS Kansas' costs through better efficiency (AP/Richmond Times-Dispatch, 8/7).
Reaction
BCBS of Kansas spokesperson Graham Bailey said officials are "shocked and ... disappointed" over the ruling. Bailey emphasized that BCBS is "financially sound" and said that rates will not increase because of the failed merger (Wichita Eagle, 8/7). Anthem officials expressed disappointment with the ruling but will "continue to seek expansion through affiliations with other health plans," according to a company statement. The Star reports that the ruling is a "setback to Anthem and the handful of other aggressive Blues companies" attempting to convert "smaller and often minimally profitable" not-for-profit insurers into for-profit companies (Indianapolis Star, 8/7).
