UnitedHealth Group Inc. has agreed to pay a total of up to more than $500 million for the Northeastern health insurance operations of Health Net Inc.
Health Net, Woodland Hills, Calif., has a total of about 3.6 million civilian health plan enrollees, and about 578,000 in the operations in Connecticut, New York and New Jersey that UnitedHealth, Minnetonka, Minn., has agreed to acquire.
Health Net’s Northeastern enrollees include 437,000 in insured commercial plans, 55,000 in Medicare Advantage plans, and 51,000 in Medicaid plans. Health Net also administers coverage in the Northeast for self-insured group plans with 35,000 enrollees.
The Northeastern operations will generate about $2.7 billion in revenue this year, Health Net estimates.
UnitedHealth and Health Net hope to close on the deal within 12 months.
UnitedHealth already has millions of enrollees and 79,000 network providers in the Northeast. It says it will work with Health Net to encourage Health Net group health clients to buy coverage from UnitedHealth subsidiaries.
Health Net, which operates mainly in California, Arizona and Oregon, wants to focus its resources on its health plans in the West, according to Health Net President Jay Gellert.
Health Net notes that it now wants to keep its Arizona operations. The Arizona commercial market “has become much more rational,” Gellert reports.