Amerigroup adds to Houston clout. A subsidiary of Amerigroup Corp., Virginia Beach, Va., last month agreed to acquire Humana's Houston-area Medicaid HMO, which has more than 23,000 enrollees. Terms weren't disclosed. The deal is expected to close by fall, pending state approval, giving Amerigroup about 175,000 enrollees in its low-income health plans, including 85,000 in the Houston market. It is Amerigroup's second major transaction this year.
Aetna selling N.J. unit. Continuing to shed businesses in an effort to turn around operations, Aetna, the nation's largest health insurer, said last month that it will sell its New Jersey Medicaid HMO and FamilyCare plan, an expanded children's health insurance program that also covers adults. AmeriChoice, Vienna, Va., is buying the plans, which cover about 118,000 people, for an undisclosed price. AmeriChoice insures more than 200,000 people in Medicaid, Medicare and publicly funded children's health plans in New Jersey, New York and Pennsylvania.
Nevada plan adding members. Las Vegas-based NevadaCare last month won state regulatory approval to acquire the 15,000 members of UnitedHealth Group's Nevada HMO. Terms of the deal were not disclosed. This transaction, set to close on July 1, will boost NevadaCare's HMO enrollment to 77,000, making the health insurer the state's second-largest HMO. UnitedHealth, based in Minneapolis, will continue to offer PPO and indemnity coverage in Nevada, as well as to serve large employers in the state through its Uniprise business.
Kaiser reports solid earnings. Kaiser Permanente, the nation's largest not-for-profit HMO, last month reported solid first-quarter results that it attributed to increased membership and greater operating efficiencies. The Oakland, Calif.-based health insurer, which in 2000 operated in the black for the first time in four years, reported first-quarter net income of $156 million, up 10% from $142 million in the year-ago period. Revenue rose 14% to $4.9 billion from $4.3 billion. Before starting an aggressive turnaround in 1999, Kaiser had lost control of its costs. In 1998 it posted a net loss of $288 million. By raising rates and divesting some of its money-losing subsidiaries, the company has regained control of its finances.