NextLevel Health is closing in July, CEO Dr. Cheryl Whitaker told employees during a town hall meeting today.
The Chicago-based Medicaid managed care plan's 56,000 members will be transitioned to another health plan, according to an employee who attended the meeting.
"Insurance is a very capital-intensive business," Whitaker said in a statement to Crain's confirming the closure. "COVID-19 has exacerbated the difficulty of black-owned businesses to access capital. NextLevel Health's community-based approach combines a culturally sensitive lens and the recognition of social determinants of health to provide Medicaid members access to quality care that has the power to improve lives immediately and long term. We look forward to lending our expertise to community partners and other providers to holistically treat and heal our communities. Our work is not done."
The Illinois Department of Healthcare & Family Services, which oversees Medicaid in the state, did not respond to a request for comment.
The news comes nearly two months after NextLevel's failed $50 million buyout.
Long Beach, Calif.-based Molina Healthcare CEO Joe Zubretsky said during a February earnings call that acquiring "financially underperforming health plans" was part of the insurance company's growth strategy. But Molina ultimately terminated the agreement "due to the seller's stated unwillingness to close pursuant to the terms of the acquisition agreement," according to an April Securities & Exchange Commission filing.
At the time, NextLevel said it would "continue to seek a capital partner to help us positively impact our communities and save lives."
Meanwhile, Illinois Attorney General Kwame Raoul filed a complaint against NextLevel this week in Cook County Circuit Court. The nature of the complaint isn't clear. Crain's was unable to obtain a copy and Raoul's press office did not respond to numerous calls and emails. A NextLevel representative said she had not seen the complaint.
With about 56,000 enrollees, or nearly 3 percent of the market, NextLevel is one of two plans that serve Medicaid managed care members only in Cook County, and one of six private insurers contracted by the state to administer Medicaid benefits under a managed care program intended to improve care and save money.
Private insurers in 2017 vied for state contracts in a competitive bidding process. Rejected initially, NextLevel appealed and won a four-year contract.
"Medicaid managed care plan NextLevel Health closing" originally appeared in Crain's Chicago Business.