FLINT TWP. — Hitting a 60-day deadline set on March 15 by state insurance regulators, HealthPlus of Michigan announced on May 15 that it will sell its Medicaid and MIChild assets to Molina Healthcare of Michigan Inc.
In mid-March, the Michigan Department of Financial and Insurance Services (DIFS) gave Flint-Township based HealthPlus two months to find a financial partner to offset significant operating losses and a surplus decline reported in December 2014.
As a part of last week’s announced transaction, Molina Healthcare of Michigan will assume HealthPlus Partners’ Medicaid contract and HealthPlus of Michigan’s MIChild contract, as well as certain provider agreements, according to a press announcement. HealthPlus Partners and HealthPlus of Michigan currently arrange for healthcare services for approximately 90,000 Medicaid and 6,000 MIChild patients.
Molina Healthcare of Michigan currently operates Medicaid and Medicare health plans with total membership of approximately 256,000, as of March 2015. Additionally, Molina Healthcare of Michigan is a certified Qualified Health Plan issuer on the Michigan Health Insurance Exchange in the non-group health insurance market in Wayne, Oakland and Macomb counties.
HealthPlus officials said they do not know at this time how this acquisition will impact operations or employees at the Flint-Township headquarters, 2050 Linden Road.
“We are still working through the details of how the sale will impact our operations and work force. I can tell you that our employees have been a top priority throughout this process,” according to a statement attributed to Graham Smith, vice president of sales and marketing.
“The deal with Molina Healthcare is a strategic move that will provide HealthPlus the needed capital to maintain the HealthPlus brand and strengthen and grow our Medicare and commercial lines of business,’’ Smith said. “The agreement with Molina stipulates that it will assume our Medicaid and MIChild contracts with the state as well as certain provider agreements. The transaction will reduce HealthPlus membership by approximately 90,000 Medicaid and 6,000 MIChild members.”
A key factor in the decision to sell the Medicaid and MIChild business to Molina Healthcare was Molina’s shared dedication to providing members with unparalleled customer service and high quality care through innovative care models, according to Nancy Jenkins, president and CEO of HealthPlus of Michigan.
Molina Healthcare will fund the transaction with available cash on hand. Subject to regulatory approvals and the satisfaction of other closing conditions, the closing of the transaction is expected to occur during the third quarter of 2015, according to the announcement.
In the interim, HealthPlus will continue serving Medicaid and MIChild members as usual. HealthPlus also will continue providing benefits and paying claims for all of its customers in its employer group and individual commercial and Medicare products.
“Molina Healthcare of Michigan is excited about this opportunity to expand our health plan in the State of Michigan,” said Stephen Harris, president of Molina Healthcare of Michigan. “This agreement with HealthPlus further reinforces our commitment to the Medicaid and MIChild programs, the State and the local provider community. We look forward to a smooth transition and delivering on our commitment to provide quality care for our members.”
A spokesperson for the Michigan DIFS did not respond to a request for comment on this development.