Molina Healthcare has entered into a definitive agreement to acquire substantially all of the assets ... [+]
Molina Healthcare said it will buy Affinity Health Plan for $380 million in cash, expanding the health insurer’s Medicaid government health benefits businesses deeper into New York.
Affinity, a Medicaid health plan with more than 280,000 subscribers in New York City, Westchester, Orange, Nassau, Suffolk, and Rockland counties in New York, has $1.3 billion in annual premium revenue.
“The acquisition of Affinity provides us with a stable base of membership and revenue and will deepen Molina’s service offerings in New York, allowing us to meet the needs of hundreds of thousands of additional Medicaid members,” Molina chief executive officer Joe Zubretsky said. “The transaction provides added stability to Affinity’s Medicaid members and its state partner during this critical time.”
It’s the latest acquisition this year for Molina, a large operator of government-subsidized health plans including Medicaid coverage for poor Americans, Medicare benefits for seniors and individual coverage known as Obamacare under the Affordable Care Act. Molina competes with Centene, Humana, UnitedHealth Group, Anthem and array of other health insurance companies in the business of providing health benefits via contracts with state Medicaid programs and the federal government.
Earlier this year, Molina agreed to buy the Magellan Complete Care line of health plans from Magellan Health for $820 million, expanding the health insurer’s Medicaid and Medicare government health benefits businesses into new markets.
“The addition of Affinity is yet another important marker in activating our growth strategy, and is a perfect product line and geographic fit,” Zubretsky said. “We believe Molina’s strengths, including its strong balance sheet and demonstrated operating capabilities, will allow us to strengthen the financial base of Affinity and improve the business’s cost structure and operating margins.”
