Health insurance companies SCAN Group and CareOregon called off their merger Tuesday amid skepticism about the merits of the proposed deal.
The companies in December 2022 announced their intent to combine into a $6.8 billion Medicaid and Medicare Advantage insurer, to be called HealthRight Group. The insurers had expected to complete the deal last year.
Related: SCAN, CareOregon plan to merge into the HealthRight Group
The Oregon Health Authority twice delayed offering a recommendation on whether to approve the proposed transaction at the request of the companies and was scheduled to offer its opinion on the matter March 18.
The Oregon Health Authority did not immediately respond to an interview request.
“Our intent in coming together was to support Oregon’s healthcare system and the people that CareOregon services,” the companies said in a joint statement. “However, despite our efforts, there are still questions about our combination. As a result, SCAN Group and CareOregon have mutually agreed to withdraw our applications with the Oregon regulatory agencies and to terminate our affiliation agreement.”
SCAN Group—the parent company of SCAN Health Plan—declined to comment on why the deal was called off, what the next steps for the companies are and whether a termination fee was involved in the deal. CareOregon did not immediately respond to interview requests.
When the merger was announced, company executives described the deal as necessary for the small, nonprofit insurers to compete in the increasingly consolidated government-sponsored health plan market dominated by large carriers. SCAN Group would have brought approximately 287,000 members, and CareOregon about 500,000 enrollees, to the combined company. Under the definitive agreement, CareOregon would have contributed $120 million to affiliate with HealthRight.
SCAN Group CEO Dr. Sachin Jain would have led HealthRight Group, and CareOregon President and CEO Eric Hunter would have served as president of the insurer’s Medicaid operation.
