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Molina Purchases Health Insurance Plan for $350 Million

by Kaia

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.

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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.”

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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.

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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.

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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.

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