(This article has been updated with a correction.)
Lovelace Health System in New Mexico is getting out of the insurance business with a deal to sell its affiliated health plan to Health Care Service Corp., the fourth-largest insurance company in the country in terms of membership.
The system's plan lost 84,000 members in August when the state Medicaid agency ended its managed-care contract with the company and went with Molina Healthcare instead.
“While this is a difficult decision and one we did not foresee making, we believe it is necessary to ensure the long-term financial health of our system,” said Ron Stern, president of Lovelace Health System, in a statement. Lovelace is a division of Ardent Health Services, a for-profit company based in Nashville.
Lovelace Health Plan's remaining 110,000 customers in individual plans, employer-run plans and Medicare Advantage would be transferred to HCSC-owned Blue Cross and Blue Shield of New Mexico, which currently has more than 400,000 customers.
Pending regulatory approval, the deal is scheduled to take affect at the end of the year. Terms were not disclosed.
Health Care Service Corp. has more than 13 million customers nationwide. It operates Blue Cross and Blue Shield plans in Illinois, Montana, New Mexico, Oklahoma and Texas.
“Blue Cross and Blue Shield is a proven, trusted and local partner, and we are confident this is the right option for our patients and health plan members,” Stern said.
While few hospital systems operate insurance arms, such crossovers are becoming increasingly common as providers and plans seek to aggressively manage population health and cut costs.
Follow Paul Demko on Twitter: @MHpdemko
(This article has been updated to correct the name of Molina Healthcare.)
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