Blues Team Up to Acquire Control Over Medicaid Plan

Blue Cross Blue Shield of Michigan and Independence Blue Cross are making a deal that could help Blue Cross and Blue Shield companies get a bigger share of the Medicaid plan market.

Michigan Blue, Detroit, and Independence Blue, Philadelphia, have agreed to pay $170 million to buy a 50% stake in the AmeriHealth Mercy Family of Companies, Philadelphia, now owned by Mercy Health System, Philadelphia.

Independence Blue — a Blue Cross plan that provides or administers health coverage for 3.1 million Pennsylvania residents — has split ownership of AmeriHealth with Mercy Health System since 1996.

Michigan Blue, a carrier that provides or manages health coverage for 4.3 million people in Michigan, will get a minority stake in AmeriHealth, the companies say.

AmeriHealth manages coverage for 800,000 Medicaid managed care enrollees in Indiana, Pennsylvania and South Carolina, and it provides pharmacy benefits management and behavioral health management services in 11 states. The company provides Medicaid administrative services in Kentucky and New Jersey.

The companies hope to complete the deal within 120 days.