A big nonprofit New York health plan has agreed to acquire an investor-owned Connecticut health plan with 270,000 members.[@@]

Health Insurance Plan of Greater New York says it will be scooping up ConnectiCare Holding Company, Farmington, N.Y., by buying ConnectiCare’s stock.

HIP, a health maintenance organization with 1.1 million members and more than $3.5 billion in annual revenue, is not disclosing the price of the deal, but analysts at Moody’s Investors Service, New York, say the deal will be expensive enough to reduce HIP’s risk-based capital ratio by more than one-third, to less than 250%.

HIP ended 2003 with $651 million in statutory net assets, according to the company’s annual report. That suggests that a deal that reduces HIP’s RBC by one-third might have a value of about $200 million, according to National Underwriter calculations.

ConnectiCare was founded in 1981 and now generates more than $600 million in annual revenue. One of the lead investors in the investment group that owns it is The Carlyle Group, Washington. President George H.W. Bush served on a Carlyle Group advisory board from 1999 to 2003.

HIP might benefit from diversifying its membership base and adding providers in Connecticut, but integrating ConnectiCare’s operations could be challenging, the Moody’s analysts predict.

The analysts note that HIP is exploring the possibility of converting to for-profit status.