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September 15, 2007
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MHMR Sept. 15, 2007: Volume 15, Number 15
Molina to buy Mercy CarePlus...Amerigroup to buy TN plan...M-Plan to exit commercial...VIEWPOINT: News Flash--Healthcare premiums are still rising...’08 premium hikes vary by state...Aetna to acquire Goodhealth...MO HMO net falls 12%...Chart: ’06 MO HMO financials...AZ HMO net grows 42%...Chart: ’06 AZ HMO financials...Molina sets growth goals...Coventry raises ’07 outlook...Cigna affirms ’07 projections...CO HMO net rises 137%...Chart: ’06 CA HMO financials...LA HMO profits soar...Chart: ’06 LA HMO financials...Amerigroup names Carlson CEO...CA clears United-Sierra deal...Cigna taps Woolf...and more...
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MOLINA TO ACQUIRE MERCY CAREPLUS
Molina Healthcare (Long Beach, CA) has announced a definitive agreement to acquire Mercy CarePlus (St. Louis, MO) for $74 million, marking the company’s entry into the Missouri Medicaid market.
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AMERIGROUP TO ACQUIRE MEMPHIS PLAN
Amerigroup Corp. (Virginia Beach, VA) announced an agreement to pay $12 million to acquire the assets of Memphis Managed Care Corp., which serves about 167,000 Medicaid enrollees in west Tennessee through its TLC Family Care Health Plan.
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M-PLAN TO EXIT COMMERCIAL HMO
Provider-owned M-Plan (Indianapolis) has announced its intention to exit the commercial HMO market and has endorsed WellPoint Inc. (Indianapolis) as the insurer of choice for the 125,000 commercial HMO members it serves.
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VIEWPOINT: NEWS FLASH--HEALTHCARE PREMIUMS STILL RISING
April may be the cruelest month, but August is when Corporate Research Group publishes its annual healthcare premium rate forecast. For 2008, CRG is projecting premium rates to rise 7.5% after accounting for reductions in benefits (MHMR, Aug. 31) That’s well above the nation’s overall inflation rate of 2% to 3%, but is still below the double-digit rate hikes of a few years ago.
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’08 PREMIUM RATE HIKES VARY FOR 11 STATE GOVERNMENTS
MHMR’s recently released 2008 premium survey (MHMR, Aug. 31) includes data on rates hikes to be paid by 11 state governments to provide coverage for their employees—with expected 2008 increases varying from zero in Georgia to between 9% and 10% in Illinois, Oregon and Texas.
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AETNA TO ACQUIRE GOODHEALTH WORLDWIDE
Aetna Inc. (Hartford, CT) has agreed to acquire Goodhealth Worldwide (Hamilton, Bermuda), a provider of individual, small group and mid-sized group health insurance to expatriates, for an undisclosed amount in cash.
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MO HMO NET INCOME DECLINES 12.2% IN 2006
HMOs in Missouri reported net income of $161.9 million, down 12.2%, on revenues of $3.831 billion, up 4.2%, in 2006, according to an MHMR analysis of state insurance department data. Membership dropped 3.9% to 832,392.
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AZ HMO NET INCOME INCREASES 42.3% IN 2006
HMOs in Arizona reported net income of $208.8 million in 2006, up 42.3%, on revenues of $4.418 billion, up 9.2%, according to an MHMR tally of state insurance department data.
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MOLINA RAISES ‘07 OUTLOOK, SETS GROWTH GOALS
Molina Healthcare (Long Beach, CA) said it now expects 2007 earnings per share of $52.9 million to $55.8 million, or $1.85 to $1.95 per share, up from a prior expectation from $1.75 to $1.90 per share.
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COVENTRY RAISES 2007 EARNINGS OUTLOOK
Coventry Health Care (Bethesda, MD) said it has raised its 2007 earnings outlook to between $3.95 and $3.99 per share, after announcing that it had completed the acquisition of Florida Health Plan Administrators, owner of Vista Healthplans, for $685 million in an all-cash transaction.
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CIGNA AFFIRMS ‘07 EARNINGS, MEMBERSHIP OUTLOOK
Cigna Corp. (Philadelphia) reaffirmed that it expects 2007 adjusted income from operations of $1.03 billion to $1.095, or $3.55 to $3.75 per share. Cigna also reaffirmed its 2007 membership growth projection of 5% to 6%.
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CO HMO NET INCOME INCREASES 137.2% IN 2006
HMOs in Colorado posted a 137.2% increase in net income to $171.9 million in 2006, while revenues increased 7.6% to $3.776 billion, according to an MHMR tally of state insurance department data on 11 leading plans.
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AMERIGROUP PROMOTES CARLSON TO CEO
In other news, Amerigroup Corp. (Virginia Beach, VA) announced the promotion of James Carlson to president and chief executive; he was previously president and chief operating officer.
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