by Jeffrey McKinney June 22, 20211535
Zing Health, a Black-founded Medicare Advantage insurer,
is expanding into 32 additional states and the District of Columbia with its
acquisition of Lasso Healthcare.
The deal
will allow Chicago-based Zing, a Black doctor-led insurer of healthcare plans,
to buy Harrisburg, Pennsylvania-based Lasso, a provider of Medicare-related
services for thousands of Americans.
Both
companies aligned on a deal because of their like-minded approach, Dr.
Eric Whitaker, the CEO and a founder of Zing Health, told Home Health
Care News. He told Black Enterprise by email what makes this acquisition
unique. “Other Medicare Advantage acquisitions have been by companies that have
had multi-lines like commercial insurance or employer insurance — ours is
strictly Medicare Advantage.”
Zing was
started in 2019 by two Black physicians/entrepreneurs, Whitaker and Dr. Kenneth
Alleyne, and co-founder Black healthcare executive, Garfield Collins. The
firm provides Medicare Advantage (MA) plans to under-resourced seniors largely
in the Midwest who are often minorities living in low-income and/or rural areas
who may otherwise not have access to adequate healthcare. Lasso has a national
reach and business model offering affordable coverage to seniors across
the country.
Reflecting
on the deal, Zing Health reports the Lasso addition provides “a national
footprint to reach diverse communities with innovative Medicare Advantage
health plans that lower the cost of high-quality care.” Zing joins other new
and existing health insurance firms using acquisitions and mergers to boost
Medicare-related business that have been growing steadily, observers say.
The pact
means Zing will expand into rural markets that could help it target
Medicare-eligible seniors who are perhaps facing difficulty gaining access to
traditional insurance networks.
“The
rural community piece is a big one,” Whitaker told Black Enterprise by email.
“Heretofore, we’ve been focusing on urban diverse communities and having rural
as part of that as an addition that’s impactful.”
Financial terms of the deal and how it will impact Zing’s revenues were
not disclosed. But Whitaker said the acquisition was funded with a combination
of cash and stock. Once the pact closes — expected to occur by late third quarter
of 2021 — Lasso will be operating under Zing’s leadership but continue to
offer its Medicare Savings Account (MSA) plans like it always has.
In
general, a Medicare Advantage Plan, like an HMO or PPO, is offered by private
companies approved by Medicare. They are sometimes referred to as “Part C” or
“MA” plans.
Whitaker
noted the Lasso Medicare Advantage plan includes a medical savings account. “We
believe that as more employers have offered health savings accounts as part of
insurance, that the potential customers will have more familiarity with this
potential product, and we hope to be the leading company that offers this
option across the country.”
So how
does this acquisition set Zing apart from other insurance providers?
“This is
a capital-intensive business,” Whitaker says. “Most of the other players we’re
competing against have raised near $1 billion plus. We are Black physician
founded. We are targeting both urban and rural diverse populations. That sets
us apart from other insurers; that’s not their mission.”
Plus,
Zing is eyeing home-based care providers as potential partners as it expands
and targets seniors.
“I think
that home health and home care is a critical component to the health of senior
members living their best lives,” Whitaker told Home Health Care News. “And
we’re excited — as Zing Health and Lasso Healthcare — to be working with the
industry to come up with new and better ways to serve our senior members.”
Whitaker
reflected on how the deal came to be.
“Our
investors were trying to understand third-party distribution. Ritter Insurance
Marketing, which owned Lasso, is the fourth largest field marketing
organization in the country. In the midst of doing due diligence on another
topic, we came across Lasso. We didn’t seek to go get an acquisition of any
kind. It just was opportunistic.”
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