Dive Brief:
- Medical Mutual announced it will acquire HealthSpan, a former Kaiser Permanente of Ohio insurance company, according to a Crain's Cleveland Business report.
- HealthSpan will continue coverage of its employer-sponsored plan members until their renewal date or Aug. 31, whichever one comes first, and coverage for individual members until Dec. 31.
- Medical Mutual Chief Ccommunications Officer Jared Chaney said it will offer plans comparable to what HealthSpan offered, and will likely have the same physicians in their network.
Dive Insight:
HealthSpan's operations will cease on Jan. 1, 2017. The company announced earlier this year it was planning to dissolve its medical group and move forward only as an insurer. However, the market's tough competition proved too much.
"We were a small plan and not able to make the growth needed to be sustainable or viable in the marketplace," said HealthSpan's spokesman, Chuck Heald.
Mergers and acquisitions among health insurance companies and hospitals have been gaining steam over the past few years, with the megamergers of Anthem/Cigna and Aetna/Humana still pending a Department of Justice final decision.
The individual market has been stumbling and UnitedHealth has threatened to pull out of exchanges due to losses. Humana announced last month in a Securities and Exchange Commission (SEC) filing it expects financial losses and a commercial membership decline up to 300,000 from its Affordable Care Act (ACA) plans, as reported by FiercHealthPayer.