- Anthem has entered into a deal with InnovaCare Health to acquire its Puerto Rico subsidiaries, which include Medicaid and Medicare Advantage plans, the payer said Tuesday. Financial terms of the deal, expected to close by the second quarter, were not disclosed.
- Anthem's entrance into Puerto Rico will net the Indianapolis, Indiana-based insurer the largest Medicare Advantage plan and the second-largest Medicaid plan on the island, which conduct business as MMM.
- Anthem touted that MMM has a network of specialized clinics with more than 10,000 providers across Puerto Rico, allowing for a more whole-health experience.
Anthem's government business fueled the bulk of its enrollment growth in 2020 as commercial enrollment was stagnant.
Overall, Anthem's government business experienced a growth of nearly 17% year over year from 2019 to 2020, while the commercial and specialty unit increased just 0.2%.
As part of this latest deal, Anthem is poised to add more than 572,000 government members, a significant one-time pickup.
Anthem is set to gain more than 267,000 MA members in the MMM plan, which is the ninth-largest MA plan in the country, according to Anthem, which ended 2020 with 1.4 million MA members, a nearly 18% increase from 2019.
Its Medicaid book of business will add more than 305,000 members through the deal, which needs approval from various regulators including the Commonwealth of Puerto Rico. Anthem's Medicaid business pegged enrollment at nearly 9 million at the end of 2020, about a 22% increase from its 2019 Medicaid enrollment.
2021 EPS guidance will not change as a result of the acquisition, Anthem said.
Anthem cut its outlook for 2021 as it experienced a rebound in care in the fourth quarter, which weighed heavily on its quarterly profit. Although some insurers reported large profits during periods of 2020 as members deferred care due to the pandemic, companies have warned the trend will ultimately swing in the opposite direction when patients return for care they put off. Insurers expect some members may even be sicker as diagnoses went undetected.
Anthem is acquiring the units from InnovaCare and its equity investor Summit Partners, which has invested in a slew of healthcare companies, including U.S. Renal Care, a dialysis operator and MD VIP, a concierge physician practice.