Essence Healthcare says it has reached an agreement to acquire Medicare Advantage operations from Mutual of Omaha.
Essence Healthcare would end up owning Mutual of Omaha Medicare Advantage Company and Medicare Advantage Company of Omaha.
- Government reports on Medicare Advantage plan enrollment numbers are available here.
- An article about the early years of Essence and Lumeris is available here.
The two Mutual of Omaha Medicare Advantage subsidiaries are offering Medicare Advantage plans in Cincinnati; Dallas; Denver; El Paso, Texas; and San Antonio.
The deal would not affect Mutual of Omaha’s other businesses, such as its Medicare supplement insurance business or its Medicare Part D prescription drug plan business.
The companies are not saying how much Essence Healthcare is paying for the Medicare Advantage plan business.
They hope to complete the deal by the middle of this year, according to Essence Healthcare.
Representatives from Mutual of Omaha were not immediately available to comment on the deal announcement.
Essence Healthcare is the St. Louis-based sister company of Lumeris.
Essence Healthcare was founded in 2004. It now runs Medicare Advantage plans that provide coverage for about 64,000 people in Missouri and Illinois.
Lumeris manages health plans. It also offers systems and services that help health care providers assume care-related financial risk, rather than depending on insurers and public health programs to absorb all of the risk.
Mutual of Omaha provides Medicare supplement insurance for 1.4 million people, or 10% of all Medicare supplement insurance users, according to Mark Farrah Associates.
Mutual of Omaha moved into the Medicare Advantage plan market in 2018. The company’s Medicare Advantage plan business now offers Medicare Advantage health maintenance organization plans that provide coverage for about 2,500 people, according to enrollment figured posted by the Centers for Medicare and Medicaid Services, the agency that runs Medicare.
Lumeris has already been running Mutual of Omaha’s Medicare Advantage plans, and it would continue to run the plans after the transaction is completed, Essence Healthcare says.
Essence Healthcare and Lumeris are both subsidiaries of Essence Group Holdings Corp.
“Mutual of Omaha is a significant long-term investor in Essence Group Holdings,” according to Essence Healthcare.
Richard Jones, the chief executive officer of Essence Healthcare, said in a comment accompanying the deal announcement that Essence Healthcare has enjoyed a close working relationship with Mutual of Omaha.
“The acquisition of these plans will significantly accelerate our footprint in Medicare Advantage, and materially change our expansion plans,” Jones said. “Accordingly, we will need to reorganize and restructure our business to accommodate this opportunity.”
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