Big business
Skip to main content
Sister Publication Links
  • Modern Healthcare Metrics
MDHC_Logotype_white
Subscribe
  • Subscribe
  • Register
  • Login
  • News
    • This Week's News
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • People
    • Regional News
    • Digital Edition
    • House Democrats would use drug-pricing bill savings to expand Medicare benefits
      Analysts to CommonSpirit Health: Show us the savings
      Employers, insurers, unions urge full repeal of Cadillac tax
      McLaren Healthcare plans to acquire Ohio hospital
    • Primary-care provider ChenMed to enter five new markets
      Lacking specialist access drives health disparities
      Genetic Counseling
      Addressing barriers
 to expanding 
genetic counseling
      2,200 University of Chicago nurses ratify contract
    • Silver-loading, CSR elimination lowered premiums for some rural enrollees
      Centene to sell Illinois plan to CVS Health
      Blue Cross of Idaho unveils souped-up short-term health plans
      Health insurers' debt obligations have soared in the last decade
    • MedPAC says ambulatory surgical centers don't need a pay raise
      States focus on healthcare costs to address coverage problems
      Hospitals sue HHS over negotiated price disclosure rule
      Michigan governor: Legislature should help pause Medicaid work rules
    • Analysts to CommonSpirit Health: Show us the savings
      Smallest hospitals saw biggest earnings gains last month
      Sutter Health postpones financial filing
      doctor helping patient stock image Sandoz
      Sponsored Content Provided By Sandoz
      As hospital executives look to reduce costs, biosimilars offer a compelling option
    • astronaut
      Astronauts developed bloodstream issues in space
      Sponsored Content Provided By ABM Healthcare
      Protecting and Maintaining Medical Devices
      human hand robotic hand stock image
      Sponsored Content Provided By Deloitte
      The Health System of the Future: How Digital Health Technology is Transforming Care
      EHR
      EHR vendors most in-use throughout Medicare incentive program
    • MRIs of dense breasts find more cancer but also false alarms
      Flu season takes off quickly in Deep South states
      Uber driver says South Carolina hospital dumped patient on him
      1 in 3 adults age 45 and older reported being lonely in a 2018 AARP survey
      Data Points: Loneliness and its impact on health
    • Mayo Clinic taps Dr. John Halamka to lead its Google partnership
      Jay Shannon out as CEO of Cook County Health
      Cleveland Clinic names Dr. James Merlino as chief clinical transformation officer
      Former Cone Health CEO Dennis Barry dies
    • Midwest
    • Northeast
    • South
    • West
  • Special Features
    • Best Practices
    • InDepth Special Reports
    • Innovations
    • Arkansas Children’s was a founding partner in Solutions for Patient Safety.
      Children's hospitals collaborate rather than compete on patient safety
      Peer recovery specialists at St. Barnabas Medical Center work with nurse Brenna Zarra.
      Peer recovery helping patients with addiction seek treatment
      UNC Health Care trains staff to treat dementia patients
      Doctor running
      Plain language alerts help Piedmont Healthcare patients, staff avoid confusion
    • Linda Kenney
      Patient advocate recalls two medical errors that nearly killed her
      Betsy Lehman
      Recent safety scandals suggest healthcare leaders haven't learned lessons
      Doctors and nurse with patient
      20 years after 'To Err is Human,' hospital care quality measures are still of little use
      Dr. Christine Cassel
      To err is human. That’s still true 20 years later, but some solutions to the problem aren’t helping
    • Advanced ICU Care
      Telemedicine helps rural hospitals meet intensivist shortage
      Randy Oostra, CEO of ProMedica
      HCR ManorCare deal laid foundation for ProMedica’s growth
      Paging Dr. Robot: Artificial intelligence moves into care
      A child being screened for vision problems using a smartphone.
      App screens kids for eye problems before they can talk
  • Transformation
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • ProMedica doubles down on social needs data analysis
      Amazon taps first pharmacy for Alexa Rx management
      Trump administration unveils new price transparency rules
      A child being screened for vision problems using a smartphone.
      App screens kids for eye problems before they can talk
    • Home health to pare down therapy services, up telehealth offerings
      Amazon launches medical transcription service
      Hospitals' uncompensated care continues to rise
      Supply chain tweaks could help average hospital hire up to 165 more nurses
    • Advanced ICU Care
      Telemedicine helps rural hospitals meet intensivist shortage
      Peer recovery specialists at St. Barnabas Medical Center work with nurse Brenna Zarra.
      Peer recovery helping patients with addiction seek treatment
      UNC Health Care trains staff to treat dementia patients
      UPS to kick off drone delivery service with hospital campuses
    • Value-based pay still struggles to improve costs, quality
      Hospitals sue HHS over negotiated price disclosure rule
      Bundled payments get a boost in two states with employee programs
      CMS wants primary-care docs to take on financial risk
  • Data/Lists
    • Rankings/Lists
    • Data Points
    • Modern Healthcare Metrics
  • Op-Ed
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
    • Randy Oostra, CEO of ProMedica
      HCR ManorCare deal laid foundation for ProMedica’s growth
      Steve Strongwater
      How Atrius Health stayed independent by not shying away from risk
      Why moving the VA to a new EHR was a pivotal decision
      Why AdventHealth's rebrand was more than a name change
    • Terry Shaw
      A diverse and inclusive culture should empower others
      Paving the path to diversity and inclusion
      The next step in healthcare evolution
      Breaking Bias: A road map to boost women and minorities into healthcare leadership
    • David Dill and Keith Myers
      Healthcare partnerships are a proven path to better care, healthier communities
      Health systems need to devote more resources to caring for the caregivers
      Chip Kahn and Alan Morgan
      Rural healthcare needs innovation, policy changes to survive
      Fawn Lopez and Bernard Tyson
      In remembrance and gratitude for a life well-lived
    • Hospital with money
      Letters: Let providers set their prices,
 and then publish them all
      Letters: Ambulatory surgery centers aren't getting a break on regulation
      Letters: Rising Medicaid spending isn't a windfall for providers
      Letters: The complexity of prior authorization runs deep
    • Sponsored Content Provided By Optum
      How blockchain could ease frustration with the payment process
      Sponsored Content Provided By Optum
      Three steps to better data-sharing for payer and provider CIOs
      Sponsored Content Provided By Optum
      Reduce total cost of care: 6 reasons why providers and payers should tackle the challenge together
      Sponsored Content Provided By Optum
      Why CIOs went from back-office operators to mission-critical innovators
  • Awards
    • Nominate
    • Award Programs
    • Previous Award Programs
    • Other Award Programs
    • Nominations Open - Top 25 Minority Leaders
      Nominations Open - Health Care Hall of Fame
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Top 25 Minority Leaders
    • Top 25 Women Leaders
    • Excellence in Nursing Awards
    • Design Awards
    • Top 25 COOs in Healthcare
    • 100 Top Hospitals
    • ACHE Awards
  • Events
    • Conferences
    • Galas
    • Webinars
    • Kronos webinar logo lockup
      Sponsored Content Provided By Kronos
      Webinar: The Future of Work in Healthcare
    • Leadership Symposium
    • Healthcare Transformation Summit
    • Critical Connections: Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Workplace of the Future Conference
    • Strategic Marketing Conference
    • Health Care Hall of Fame Gala
    • Top 25 Women Leaders Gala
    • Best Places to Work Awards Gala
    • Top 25 Minority Leaders Gala (2020)
  • MORE +
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. News
December 20, 2004 12:00 AM

Big business

Humana agrees to acquire CarePlus for $450 million

Laura B. Benko
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    In the latest sign that the market for Medicare HMOs is heating back up, Humana last week agreed to acquire 50,000-member CarePlus Health Plans of Florida for roughly $450 million.

    The addition of the privately held, Miami-based Medicare HMO would boost Humana's total Medicare enrollment to about 418,000 members in 15 states and Puerto Rico, and make it the overwhelmingly dominant player in the lucrative south Florida market, with 181,000 Medicare members.

    The announcement comes just six months after life and health insurer Universal American Financial Corp., Rye Brook, N.Y., closed on its $98 million acquisition of Heritage Health Systems, a 16,000-member Medicare HMO based in Houston. And industry observers say more deals could be on the horizon.

    "Medicare HMOs are poised for a comeback," said Allan Baumgarten, a Minneapolis-based healthcare consultant. "Insurers are once again seeing a strong business opportunity in Medicare, so I wouldn't be surprised to see this trend continue."

    In the late 1990s, HMOs began quitting Medicare markets in droves, arguing that skimpy federal reimbursement increases were failing to keep pace with soaring medical costs, making the former Medicare+Choice program a money-losing venture. Other insurers that remained in the program began scaling back their benefits or charging higher premiums, deductibles and copayments.

    But now, insurers are being lured back into the newly renamed Medicare Advantage program thanks to substantial payment increases and other incentives earmarked for them under the Medicare Modernization Act of 2003. This year alone, private Medicare plans got an average rate increase of 10.6%, and that extra cash has allowed them to expand their coverage areas, sweeten benefits and reduce premiums-all while still turning a profit.

    Industry experts caution that the windfall may not last long. A report published last week by the journal Health Affairs questioned whether Congress, facing a growing budget deficit, would be forced to scale back payments as early as 2006. "What the federal government giveth, it can also taketh away," Baumgarten said.

    Still, the improved funding has prompted many insurers to expand their role in Medicare Advantage in the coming year. Humana, in particular, announced earlier this month that it received CMS approval to offer Medicare PPOs in 14 markets and has hopes to get the go-ahead to enter another 15 markets.

    The CarePlus acquisition is expected to close by Jan. 31, pending regulatory approval. Humana officials said the deal would add 15 cents to 18 cents to per-share earnings in the first year, bringing the company's 2005 projected earnings to $2.10 to $2.13 per share.

    The acquisition includes CarePlus' pharmacy management business and 10 medical clinics, which Humana said it would operate through 2005. The clinics serve about 19,000 CarePlus members throughout Miami-Dade, Broward and Palm Beach counties.

    The purchase price includes $408 million in cash and allows CarePlus' current owners to keep their insurance reserve fund, which comes to another $42 million. Humana said it plans to borrow about 75% of the money, with the rest coming from cash on hand.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Sponsored Content
    Get Free Newsletters

    Sign up for free enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today

    The weekly magazine, websites, research and databases provide a powerful and all-encompassing industry presence. We help you make informed business decisions and lead your organizations to success.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS
    • Instagram

    Stay Connected

    Join the conversation with Modern Healthcare through our social media pages

    MDHC_Logotype_white
    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    Modern Healthcare
    Copyright © 1996-2019. Crain Communications, Inc. All Rights Reserved.
    • News
      • This Week's News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition
    • Special Features
      • Best Practices
      • InDepth Special Reports
      • Innovations
    • Transformation
      • Patients
      • Operations
      • Care Delivery
      • Payment
    • Data/Lists
      • Rankings/Lists
      • Data Points
      • Modern Healthcare Metrics
    • Op-Ed
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Awards
      • Nominate
      • Award Programs
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Top 25 Minority Leaders
        • Top 25 Women Leaders
      • Previous Award Programs
        • Excellence in Nursing Awards
        • Design Awards
        • Top 25 COOs in Healthcare
      • Other Award Programs
        • 100 Top Hospitals
        • ACHE Awards
    • Events
      • Conferences
        • Leadership Symposium
        • Healthcare Transformation Summit
        • Critical Connections: Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
        • Workplace of the Future Conference
        • Strategic Marketing Conference
      • Galas
        • Health Care Hall of Fame Gala
        • Top 25 Women Leaders Gala
        • Best Places to Work Awards Gala
        • Top 25 Minority Leaders Gala (2020)
      • Webinars
    • MORE +
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing