Dive Brief:

• Looking to seize on the massive expansion of Medicaid, Blue Shield of California said it has agreed to acquire Monterey Park health plan Care 1st for an undisclosed sum.
• Until now, nonprofit Blue Shield hasn't participated in Medi-Cal, the state’s Medicaid program for lower-income people. With Care 1st, the San Francisco insurance giant said Monday it will gain 473,000 Medicaid managed-care members as well as 46,000 Medicare patients.
• The majority of Care 1st HMO members are in Southern California, but it also covers patients in Arizona and Texas.

Dive Insight:

Blue Shield's move is part of a larger national trend, and one that has investors happy. By not participating in Medi-Cal, Blue Shield has been missing out on the program's to 11.3 million Californians as part of the expansion under the federal Affordable Care Act, the LA Times article notes. Also notable—though perhaps not that surprising—is reports that insurers that specialize in the Medicaid managed-care market, such as Woodland Hills insurer Health Net Inc., have seen their shares soar this year thanks to the ACA expansion.