Dive Brief:
- Molina Healthcare, a for-profit Medicaid HMO, is set to purchase specific assets of the Medicaid and MIChild businesses of Flint-based HealthPlus of Michigan and its subsidiary, HealthPlus Partners, Inc.
- Molina has licensed health insurance plans in 11 states and Puerto Rico that currently serve more than 3 million members.
- HealthPlus' decision to sell its Medicaid business is part of a strategy to attempt to save the financially troubled company.
Dive Insight:
The deal comes almost three months after the Michigan Department of Financial and Insurance Service put HealthPlus Insurance Co. under supervision as a result of its financial issues. HealthPlus' losses during the past two years had put its reserves below the state minimum.
As Modern Healthcare reports, the company had attracted sicker-than-average members and its claims were regularly exceeding its premium revenue. At the same time, HealthPlus was suspended by the CMS from enrolling new Medicare Advantage members.
"This strategic move will provide us the needed capital to maintain the HealthPlus brand as well as to strengthen and grow our Medicare and commercial lines of business," Nancy Jenkins, president and CEO of HealthPlus of Michigan, said in a prepared statement.
The terms of the deal have not been disclosed, but Molina says it will pay cash and is looking to close the transaction during the third quarter.