Molina Healthcare continued its buying spree with the acquisition of a long-standing Kentucky Medicaid managed care plan. It will acquire Passport Health Plan’s Medicaid and dual-eligible businesses for $20 million, the companies announced on Friday.
Passport Health Plan is Kentucky’s second largest Medicaid managed care plan, with 320,000 members, according to the Louisville Courier Journal. Most of its business comes from serving Kentucky Medicaid patients.
In recent years, the company had run into financial trouble after the state cut Medicaid rates in the Louisville region. To shore up its finances, Virginia-based healthcare consulting firm Evolent Heath bought a majority stake last year for $70 million.
But Passport faced trouble again in when it lost its Medicaid contract with the state.
Molina said it would acquire the Passport name as part of the acquisition, and would keep 500 of its staff. The Long Beach-based insurer, which manages Medicare, Medicaid and marketplace plans across the U.S., gained a foothold in Kentucky when the state awarded it a Medicaid managed care contract for 2021. Molina plans to use the Passport acquisition to help ease the transition for members in Kentucky and jump start its new plan in the state.
“Acquiring the operations as well as transferring over employees of Passport Health Plan provide us with a well-known brand in Kentucky and position us well to compete even more effectively in the market,” Molina CEO and President Joe Zubretsky said in a news release. “We look forward to being able to achieve a major objective of this transaction, which is the continuity of care for Passport’s members.”
The news is on top of Molina’s plans to acquire Magellan Complete Care for $820 million, a deal the two insurers announced in April. If approved, the acquisition would expand Molina’s footprint in six states, giving it a new presence in Arizona, Massachusetts and Virginia.
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