Years since it first announced it wanted to exit the insurance business, Catholic Health Initiatives is selling its Arkansas insurance plan QualChoice to health insurer Centene Corp.
The companies have not yet disclosed any terms of the deal, which must be approved by regulators. The deal includes QCA Health Plan and QualChoice Life and Health Insurance Co., owned by parent company QualChoice Holdings.
A CHI spokesman was unable to provide a comment, and Centene did not respond. The Arkansas Democrat-Gazette first reported the news Friday.
Not-for-profit CHI has been trying to shed its consolidated insurance division QualChoice Health, formerly called Prominence Health, for several years. QualChoice operated plans in seven states. CHI acquired the Little Rock-based commercial health plan Qualchoice Holdings in 2014, but in May 2016 announced it wanted to get out of the insurance business altogether after struggling to turn a profit.
That year, CHI reported its consolidated insurance business experienced an operating loss before interest, depreciation and amortization of $85.4 million. While looking for buyers, CHI managed to improve QualChoice's operating performance, reporting the subsidiary had a positive operating EBIDA before restructuring, impairment and other losses of $8.6 million in the fiscal year ended June 30, 2018. CHI's operating EBIDA was $892.2 million and its net income totaled $222.1 million in 2018.
CHI said in its annual report published in September 2018 that it had entered into a nonbinding letter of intent to sell QualChoice's commercial operations in Arkansas, though it didn't name the potential buyer at the time. CHI sold its Medicare Advantage contract in Washington to Premera Blue Cross in 2018.
St. Louis-based Centene mostly handles Medicaid and ACA exchange plans. Its net income totaled $828 million in 2017. A week ago, Centene announced it bought another big stake in the University Hospital of Torrejon de Ardoz in Madrid, Spain, bringing its total stake in the hospital to 89%.