Molina Healthcare is buying the Medicaid business of Columbia United Providers, a not-for-profit health insurer based in Washington state, the company said Thursday. It's the seventh acquisition in what has turned out to be a busy year for Molina.
Molina's acquisitions of smaller Medicaid plans contrast with and have been overshadowed by the mega-mergers that are consuming its competitors. Centene Corp. and Health Net are nearing the completion of their $6.8 billion deal. Aetna and Anthem are in the process of finalizing their separate, mammoth transactions, which have received widespread scrutiny and have been put through three congressional hearings.
Most of Molina's transactions this year have been "tuck-in” acquisitions that are smaller in size and therefore may not raise immediate antitrust issues, but they still immediately enhance Molina's scale.
Molina, a Medicaid managed-care insurer based in Long Beach, Calif., has purchased the Medicaid assets of other health plans in Florida, Illinois, Michigan and now Washington. It also paid $200 million for behavioral health provider Providence Human Services, which has since been renamed Pathways.
The agreement with Columbia United Providers will add 55,000 Medicaid beneficiaries to Molina's membership. Molina has 3.47 million members, a vast majority of whom are in some kind of Medicaid plan. Approximately 568,000 Molina members live in Washington.
Chris Rigg, a financial analyst at Susquehanna Financial Group, estimates Molina paid upwards of $45 million for Columbia's Medicaid plan, and it will add about $130 million to $165 million of annual revenue. Molina, which is projected to collect more than $14 billion of revenue this year, did not disclose official terms of the deal.
Pending regulatory approval, the deal could close during the first quarter next year, Molina said.
