Novant Health plans to invest in HealthTeam Advantage, a Medicare Advantage plan owned by Cone Health, the two North Carolina-based health systems said Wednesday.
Novant Health, a 15-hospital system based in Winston-Salem, and Cone Health, a five-hospital system based in Greensboro, have signed a letter of intent that would allow Novant Health to make an investment into the plan, dubbed HealthTeam Advantage. Once the deal is completed, the two systems will jointly own the insurance company, with Cone Health maintaining majority ownership.
A Novant Health spokesperson declined to disclose the deal's financial terms.
As part of the agreement, Novant Health will bring HealthTeam Advantage into new markets.
"Beginning with serving our seniors, Cone Health and Novant Health will use their combined reach to effectively partner with physicians and provide more and better insurance program choices across the state," said Carl S. Armato, president and CEO of Novant Health, in a news release.
Medicare Advantage plans, which provide Medicare benefits through private companies, are a rapidly growing business as more older adults choose their services for their insurance coverage. Private insurers captured another 3% of the market from traditional Medicare this year.
Greensboro-based HealthTeam Advantage, a wholly owned subsidiary of Cone Health, covers more than 15,000 Medicare beneficiaries across seven counties in North Carolina.
HealthTeam Advantage offers members dental, vision, hearing and fitness benefits, as well as Medicare Part D prescription coverage, according to a news release. The Medicare Advantage plan has also launched Chronic Condition Special Needs Plans, or C-SNPs, for diabetes and heart care in four counties.
Cone Health launched the HealthTeam Advantage plan in 2015.
Cone Health has tested various ways to diversify revenue, including investing millions into a diabetes app it shuttered last year. The health system ended its fiscal 2021 with $2.5 billion in revenue, up from $2.3 billion in fiscal 2020, and $44.9 million in operating income, down from $62.7 million, which Fitch Ratings attributed to COVID-19 spikes and increased staffing costs.
