Fortune 500 insurance company Molina Healthcare Inc. (NYSE: MOH) has agreed to buy ConnectiCare, a subsidiary of nonprofit EmblemHealth Inc., for $350 million in cash.
ConnectiCare is a health plan in the state of Connecticut serving approximately 140,000 members across Marketplace, Medicare, and certain commercial products. The purchase price represents 25% of ConnectiCare’s expected 2024 premium revenue of $1.4 billion.
EmblemHealth said it is refocusing on New York City and building EmblemHealth Neighborhood Care centers to address health equity and the social barriers members face in accessing care.
“ConnectiCare has been a valued part of the EmblemHealth Enterprise, providing top-tier access to high-quality health insurance coverage. It has been an honor to serve the people of Connecticut for more than four decades. We are proud that our plan has been recognized for its outstanding customer service, commitment to the community, and strong clinical partnerships," said Karen Ignagni, EmblemHealth CEO, in a statement. “We are taking a major step to support ConnectiCare's growth by entering into an agreement with Molina Healthcare. We believe Molina's commitment to delivering on the promise of the Affordable Care Act, bringing coverage to so many Americans through the federal and state exchanges, makes it the ideal partner to take on ConnectiCare's mission."
Long Beach, Calif.-based Molina called the acquisition a strong strategic fit, adding an established government business, recognized brand, and a statewide provider network.
Molina currently offers health plans in Arizona, California, Florida, Idaho, Illinois, Kentucky, Massachusetts, Michigan, Mississippi, Nevada, New Mexico, New York, Ohio, South Carolina, Texas, Utah, Virginia, Washington and Wisconsin. Molina also offers a Medicare product and has been selected in several states to participate in duals demonstration projects to manage the care for those eligible for both Medicaid and Medicare.
In its first-quarter earnings report, Molina reaffirmed its full year 2024 guidance with expected premium revenue of approximately $38 billion and adjusted earnings of at least $23.50 per diluted share.
“The addition of ConnectiCare to Molina brings a well-rounded government-sponsored healthcare plan, and a new state, to our portfolio,” said Joe Zubretsky, president and CEO of Molina. “Today’s announcement demonstrates the continuing success of our strategy of acquiring stable revenue streams, deploying capital efficiently, and delivering value through the application of the standard Molina playbook.”
The transaction is subject to the receipt of applicable federal and state regulatory approvals, and the satisfaction of other customary closing conditions. It is expected to close in the first half of 2025.
