Bruce Japsen Senior Contributor Oct 16, 2019,9:54 am
Molina Healthcare has
agreed to buy a health plan in New York for $40 million in cash in a move to
expand its Medicaid
health benefits operations in the state.
Molina said Wednesday it
has signed a deal to “acquire certain assets” of YourCare Health Plan,
Inc., a nonprofit unit of Monroe Plan for Medical Care. The deal will bring
46,000 Medicaid members in seven counties in the Western New
York and Finger Lakes regions, Molina said.
The deal will bring Molina revenue amid
growing competition among rival health plans that are consolidating to gain
market share. It’s the latest nonprofit health plan to entertain a takeover in
New York. Last year, Centene bought a much bigger
nonprofit plan in Fidelis Care for $3.7 billion.
Molina said YourCare’s estimated premium
revenue for the full year 2019 is approximately $285 million. The deal is
expected to close in early 2020 pending regulatory approvals.
Though a small acquisition given Molina
generates about $4 billion in premium revenue every quarter, it’s a sign the
health insurer is delivering on its promise to increase cash flow and grow its
businesses in the second year of new management. Joseph Zubretsky was named Molina’s CEO two years ago amid
a restructuring of the company following the ouster of the Molina
brothers who at the time were the top two executives at the
company.
“This agreement represents an exciting
opportunity to build upon our existing operations in New York and
expand into new service areas,” Colleen Schmidt, president of Molina
Healthcare of New York said in a statement. “Molina is excited to partner with
Monroe and MP CareSolutions on select services to facilitate access to quality
health care and ensure a seamless transition for members and providers.”
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