Molina Healthcare Inc., based in Long Beach, has announced its acquisition of ConnectiCare Holding Co. Inc., a subsidiary of EmblemHealth Inc. based in New York, for $350 million. ConnectiCare operates as a health plan in Connecticut and currently serves approximately 140,000 members.
Joe Zubretsky, Molina’s president and CEO, highlighted the strategic significance of this acquisition, stating, “The addition of ConnectiCare to Molina brings a comprehensive government-sponsored healthcare plan and expands our presence into a new state. Today’s announcement underscores our successful strategy of acquiring stable revenue sources, deploying capital efficiently, and delivering value through Molina’s established playbook.”
The acquisition will be financed using Molina’s existing cash reserves and is anticipated to be finalized in the first half of the upcoming year.
Founded originally as a single clinic in 1980, Molina has evolved its focus to specialize in government-sponsored health plans. In the last fiscal year, the company reported revenues of $34 billion, establishing itself as one of the largest publicly traded companies in Los Angeles County by revenue.
Molina’s significant growth trajectory includes a notable expansion in 2022, when it secured the opportunity to provide coverage for an additional 600,000 low-income residents of Los Angeles through the state’s Medicaid program, effectively doubling its prior enrollment. Recently, Molina completed the acquisition of Bright HealthCare’s California Medicare business for $425 million.
Following the ConnectiCare acquisition announcement, Molina reported its quarterly earnings. In the second quarter, premium revenue increased by 17% year-over-year to $9.4 billion, while adjusted net income rose by 4% year-over-year.
