Molina Healthcare has bought the Medicaid business of the New York-based YourCare Health Plan in a $40 million deal.
The insurer, whose business is focused primarily on government plans, announced Wednesday that it will serve the plan’s approximately 46,000 Medicaid members across seven counties in Western New York and the Finger Lakes region.
“This agreement represents an exciting opportunity to build upon our existing operations in
Molina will get the money through available cash and expects the transaction to close in early 2020. The estimated premium revenue for 2019 from YourCare is approximately $285 million, the insurer said.
YourCare is a not-for-profit subsidiary of Monroe Plan, which will continue to provide “certain management and administrative services related to member care and provider relations,” Molina said in a release.
The acquisition can help Molina recover from losing several Medicaid contracts that contributed to a loss in revenue last quarter. Premium revenue in the 2019 second quarter was $4 billion, a 10% decline compared with the same period in 2018.
Molina has retreated from several Medicaid markets and lost its contract in New Mexico. The insurer also resized its Florida Medicaid contract and made a bid to acquire a Medicaid contract in Kentucky.