Health Net (NYSE:HNT) is selling its Medicare prescription drug plan to CVS for about $160 million, the insurer announced Monday. It expects to gain $140 million in net cash from the deal, Bloomberg reported.
Jay Gellert, Health Net's chief executive, said the insurer is "confident that the transition of members will proceed smoothly with no disruption in services" because it already has worked with CVS to deliver certain services for its members, reported the Los Angeles Business Journal.
"We believe this proposed transaction is in the best interests of our Medicare (Part D Plan) members and our stockholders," Gellert said. "Our Medicare PDP members, who have received certain services from CVS Caremark for five years, will now be affiliated with one of the nation's largest Medicare PDP sponsors."
Health Net's Medicare Advantage plan, which has about 400,000 in 49 states and the District of Columbia, earns about $490 million in annual revenue, Bloomberg noted.
The deal is subject to approval from the Centers for Medicare & Medicaid Services. Health Net acknowledged that the purchase price may be adjusted based on the actual number of enrollees in the Part D plans when the deal closes sometime in the second quarter, according to the Wall Street Journal.
To learn more:
- read the Wall Street Journal article (subscription required)
- see the Los Angeles Business Journal article
- check out the Bloomberg article
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