Blue Cross sale sparks fears over price increases 

Last month, Louisiana’s largest health insurer – the nonprofit Blue Cross and Blue Shield of Louisiana (BCBSLA) – temporarily shelved its plan to be acquired by a private insurance conglomerate. The decision came after state lawmakers, the leading candidate for governor, hospitals, doctors, and the Louisiana Budget Project raised questions about how BCBSLA’s sale to Elevance Health will affect the health care landscape. The Baton Rouge Business Report’s David Jacob explains how the potential deal sparks anxiety about future price hikes. 

[former executive with Blue Shield of California Michael] Johnson points to a 2019 Harvard study that indicates previous conversions of nonprofit Blue Cross and Blue Shield insurers have led to average price increases of 13% when the insurer’s market share is greater than 20%, and BCBSLA’s market share is well beyond that threshold. While conversions don’t necessarily lead to higher premiums, for-profit insurers are more likely than nonprofits to exercise market power when they have it, the study’s author found.

As part of the acquisition, the BCBSLA assets would  be used to forma new charitable foundation, organized in Delaware under 501c4 of the federal tax code. Advocates have questioned the structure of that foundation.  

Along with addressing the potential for price increases, [Louisiana Budget Project Executive Director Jan] Moller’s organization wants to ensure the foundation truly serves the public interest and does not get involved in politics, and he’s happy the approval process is slowing down. In other states where this has happened, lawmakers have tried to have some oversight over the foundation, he says. This process is only going to happen once, he notes, so it’s important to get it right.

Southern economic development model fails
For decades, leaders in Southern states have promoted “business friendly” policies, such as tax incentives, less regulation and low wages as a vehicle for economic prosperity. But in most Southern states measures of economic growth are lower than the national average, while poverty rates are higher. A new report from the Economic Policy Institute examines how Southern anti-worker policies are rooted in racism and economic exploitation: 

After slavery was abolished, plantation owners represented themselves as “concerned taxpayers” who opposed rising property taxes. They were joined by poor white farmers who would now also be subject to rising property taxes raised by newly—and temporarily—empowered Black political leaders. These leaders were raising taxes to provide basic services such as public education and to rebuild infrastructure after the devastation of the Civil War. But wealthy Southerners stoked racial animus to divide poor and working-class Southerners along the lines of race and ensure majority support to implement highly regressive tax policies (Williamson 2021; Young 2023).

Southern leaders continue to lead efforts to lower or completely eliminate corporate and personal income taxes and offset the lost revenue with regressive taxes, such as sales taxes. But these policies disproportionately fall on low-income earners and fail to raise enough revenue to adequately support public services. 

 In reality, this regressive approach to taxes simply means there is not sufficient revenue to properly fund education, health care, public transportation, water and sewer system maintenance, and the many other public services Southerners rely on (Das 2022b). The lack of resources to provide services for ordinary Southerners is further exacerbated when state governments give huge subsidies to private companies.

Cleaning up orphaned wells
The new federal infrastructure law will provide Louisiana with more than $100 million to clean up the approximately 4,500 abandoned “orphan” oil and gas wells on state lands. In total, the federal government is allocating more than $4.7 billion for this nationwide clean-up project. But as Stateline’s Kevin Hardy explains, the funding will only put a small dent in the backlog of abandoned wells and new regulations will be needed to ensure progress. 

During the first round of grants, the feds didn’t require states to calculate the methane emissions each plug prevents. But from now on, states seeking grants will have to measure methane releases at each well. That will require states to develop new methods and spend more time and money. And the workforce shortage only makes it harder for states to use their grants. … “It’s easy to see a blowout. It’s tougher to see 100 small leaks,” [Louisiana Department of Natural Resources spokesperson Patrick] Courreges said. “I think you’re just now seeing regulators figuring out, ‘OK, how do we approach that? How do we do that?’ Obviously, you’re probably going to need more funding for everybody.”

Former democratic officials stop taxes on wealthy
Former Democratic officials, including former Louisiana Sen. John Breaux, are promoting an aggressive anti-tax campaign to protect and expand special tax breaks for the rich. The Institute on Taxation and Economic Policy’s Steve Wamhoff explains why the Saving America’s Family Enterprises (SAFE) campaign is attempting to circumvent Congress on legislation for unrealized capital gains taxes and the impacts it could have on the nation’s tax structure as a whole.

The chaos that should concern the Supreme Court is the legal chaos that will erupt if it reinterprets the Constitution to codify the policy positions of SAFE. Such a ruling would suggest that many, many existing tax laws that have been on the books for decades are unconstitutional, leading to years of litigation and uncertainty and potentially the unraveling of our tax system. … If they follow the advice of SAFE, the right-wing justices may blow up the consensus on these long-standing tax provisions, not to mention a more fundamental consensus that billionaires should not be able to override the democratic process. Rather than “Saving America’s Family Enterprises,” the group seems focused on demolishing this basic tenet of democracy.

Number of the Day
12% – Percentage of public elementary schools with declining enrollment of 20 percent or more during the Covid-19 pandemic. Only about five percent of public elementary schools saw such a decline before the pandemic. (Source: U.S. Census Bureau via the Hamilton Project & Brookings)