UnitedHealth to Buy Baltimore-based Medicare Insurer
UnitedHealthcare, a subsidiary of UnitedHealth Group, Inc., announced Tuesday that it has agreed to acquire XLHealth Corporation, a Baltimore-based Medicare insurer.
Financial terms of the all-cash acquisition were not disclosed. UnitedHealthcare expects to complete the transaction in the first half of 2012.
XLHealth specializes in plans for Medicare recipients with chronic illnesses-such as diabetes and heart disease-and those who receive Medicaid government coverage. The company serves approximately 113,000 Medicare members in Arkansas, Georgia, Maryland, Missouri, South Carolina, and Texas.
UnitedHealthcare said XLHealth plans to expand its presence to Illinois, Indiana, Iowa, New Mexico, New York, and Wisconsin in 2012 and that it estimates that its 2012 revenues will exceed $2 billion.
UnitedHealthcare already serves the most Medicare customers in the country-with more than 7 million as of September 30, according to a Pioneer Press report. The company said the acquisition will broaden its capabilities in serving Medicare enrollees with chronic illnesses and those who are eligible for both Medicare and Medicaid.
“As more Americans enter Medicare with multiple chronic conditions, including many who are also eligible for Medicaid, health plans that deliver effective complex care management can make an enormous difference in the quality of care beneficiaries receive,” Gail Boudreaux, CEO of UnitedHealthcare, said in a statement. “We greatly admire the work of the XLHealth team and look forward to leveraging XLHealth's clinical management expertise to better serve our membership.”
Revenue from managed-care plans for Medicare may rise by $10 billion by 2015 as baby boomers-people born between 1946 and 1965-reach retirement age, according to the Pioneer Press. The purchase of XLHealth is reportedly the seventh acquisition in the country this year involving companies that manage Medicare coverage, including UnitedHealth Group's purchase of Brentwood, Tennessee-based Inspiris-another Medicare insurer-in March.
Minnetonka-based UnitedHealth Group is Minnesota's largest public company based on its revenue, which totaled $94.2 billion in 2010. The company offers health and well-being products and services through two platforms-UnitedHealthcare, which provides health care coverage and benefits services, and Optum, which provides information and technology-enabled health services.