Health

Molina Healthcare drops $110M on AgeWell’s managed long-term care in New York

Molina Healthcare is set to acquire AgeWell New York’s Medicaid Managed Long Term Care business in a deal priced at roughly $110 million, the former announced late last week.

Molina said that it’s intending to fund the purchase using cash on hand. It’s set to close by the third quarter of this year, pending regulatory approvals and other customary closing conditions.

In the announcement, Molina said that it expects the new acquisition to drive immediate gains in adjusted earnings per share.

AgeWell New York’s MLTSS business pairs well with Molina’s existing Senior Whole Health of New York MLTSS and “presents an opportunity to leverage Molina’s fixed cost base,” the larger managed care company said.

“The addition of AgeWell to Molina’s expanding New York footprint is not only complementary to our existing [managed long-term services and supports (MLTSS)] business, but also representative of our strategic growth strategy,” Joe Zubretsky, president and CEO of Molina Healthcare, said in a statement. “Our highest priority is to serve all Molina members with quality care and compassion, and we anticipate a seamless integration.”

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AgeWell, a specialty managed care organization, brings in about $700 million in full-year premium revenue. According to the announcement, it served roughly 13,000 MLTSS members as of Aug. 31.

Molina, meanwhile, upped its full-year revenue 15% to $19.4 billion for 2020, although its net income dipped down about $60 million to $673 million. The company said it served roughly 4.7 million members as of the end of June, a roughly 30% jump from the same time last year.

The Fortune 500 managed care company has been growing its business with the help of few acquisition deals.

Back in April, Molina unveiled a $60 million cash purchase of Cigna’s Texas Medicaid business. Molina said at the time that the deal, expected to close during the second half of the year, would add approximately 50,000 members to its collection.

Other Molina transactions over the past year include the January close on Magellan Health and its 200,000 members for $820 million, the announced purchase of Affinity Health Plan and its 284,000 members for $380 million and the September 2020 close on Passport Health Plan’s Medicaid line and its contract with the state of Kentucky.

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