Lutheran Medical Center to sell insurance company

Lutheran Medical Center, New York, said it reached an agreement to sell its insurance company Health Plus to Amerigroup Corp. for $85 million.

The deal, which must win approval from regulators, is expected to close during the first half of 2012, the Virginia Beach, Va.-based insurer said in a statement announcing the deal. Health Plus, a managed-care not-for-profit, covers about 320,000 enrollees in Medicaid managed care, other New York state plans and Medicare, the hospital said.

Cash from the transaction will be used to create Lutheran Medical Center’s first endowment, said Wendy Goldstein, CEO of Lutheran HealthCare, which includes Lutheran Medical Center, said in the written statement. “It will strengthen our financial viability allowing us to reinvest in patient care for our traditional Medicaid and uninsured populations,” she said. Lutheran HealthCare reported income of $5 million on revenue of $524.8 million, according to unaudited financial figures released in its 2011 annual report.

Amerigroup, a publicly traded insurer, said Health Plus’ revenue for 2011 is projected to total $1 billion and once closed, will give the company one of the largest New York Medicaid managed-care plans.