Anthem is acquiring InnovaCare Health's Medicare Advantage and Medicaid plans in Puerto Rico. A spokesperson estimates the Indianapolis-based insurer's total number of members in the combined plans will reach 10.5 million once the deal is complete.
Anthem, which operates Blue Cross and Blue Shield plans in 14 states, will add more than 267,000 Medicare Advantage members and 305,000 Medicaid members to its rolls with the acquisition, making it the fourth-largest Medicare Advantage insurer behind Aetna.
The company said InnovaCare's MMM umbrella in Puerto Rico represents the ninth-largest Medicare Advantage plan in the country and the largest MA plan on the island. It also serves as the second-largest Medicaid plan in the commonwealth.
In addition to adding members, Anthem will bring on MMM's network of 10,000 healthcare providers from specialized clinics and independent physician associations.
In September 2020, InnovaCare CEO Dr. Richard Shinto said the insurer issued these providers at least a $160 million advance before they shut down their offices, in a move to keep the healthcare system financially viable during the COVID-19 crisis. Shinto said many of its specialists on the island operate under fee-for-service models.
The move comes just half a year after Molina Healthcare sold its Puerto Rico Medicaid business to an on-island competitor and officially exited the island.
Terms of the Anthem deal were not disclosed. The acquisition is expected to close in the second half of 2020, pending federal approval and permission from the commonwealth. Anthem said the purchase does not update its 2021 earnings per share guidance of $24.50.
During the company's fourth-quarter earnings call on Jan. 27, CEO Gail Boudreaux noted that Medicare and Medicaid represented the fastest-growing segments of Anthem's business. The company reached 8.8 million Medicaid members at the end of 2020, up 21% year-over-year, and also counted 2.3 million people as Medicare customers, up 11% from 2019.
This year, the company expects total membership to reach 44.7 million, with Medicaid continuing to drive growth.
"We are pleased to expand Anthem's commitment to serve Medicare and Medicaid-eligible individuals and consumers to Puerto Rico," Boudreaux said in a statement. "We remain focused on providing services that drive greater value while giving members access to care and services that meet their diverse needs, enhance their experience and help them lead healthier lives."