Health Alliance Plan, the health plan owned by Henry Ford Health System in Detroit, entered a deal to acquire troubled insurer HealthPlus of Michigan, the insurance companies announced.
Officials will more closely examine the deal and hope to sign a definitive agreement “in the near future,” the insurers said in a news release. HealthPlus of Michigan, which was sanctioned earlier this year for financial distress, in May announced it entered an agreement to sell its Medicaid managed care business to Long Beach, Calif.-based Molina Healthcare.
HealthPlus of Michigan lost $17.7 million on revenue of $502 million last year, about half of which ($8.9 million) was losses on its Medicaid plan.
Molina acquired HealthPlus of Michigan's Medicaid plan HealthPlus Partners and its children's Medicaid contract on Sept. 1. HealthPlus of Michigan officials described the sale as a bid to survive.
Health Alliance Plan, which relies heavily on Michigan's automobile industry for customers, has 690,000 members. Last year, the health plan's commercial membership declined but saw an increase in business under the Affordable Care Act, from newly created health insurance exchanges and expanded enrollment in Medicaid.
HealthPlus of Michigan has 120,000 members after the sale of its Medicaid business, which covered roughly 96,000 adults and children.
"We believe by combining our strengths we will achieve greater value and stability in the Mid-Michigan region for our members, employer groups, labor and providers," said James Connelly, president and CEO of the Health Alliance Plan, in a news release about the planned deal.