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Health Net Picks Up 100,000 Members

Posted on: Wednesday, 5 April 2006, 00:00 CDT

By Brent Hopkins, Daily News, Los Angeles

Apr. 4--WOODLAND HILLS -- Health Net Inc. picked up more than 100,000 new members with its recent acquisition of Universal Care Inc.'s health plan assets, the managed-care company announced Monday.

Terms of the deal were not announced, but Health Net had been in the process of acquiring its smaller, Signal Hill-based rival for several months. It will fold the added membership into its Health Net of California subsidiary, bringing both commercial members and participants in Medi-Cal and Healthy Families.

"It was a way for us to maintain the relationship with the members we already had and gain some new ones," said Stephen Lynch, president of Health Net of California. "We're committed to the Medi-Cal market, so this was a way to further our involvement."

Executives with the privately held Universal Care were unavailable for comment on the deal.

Health Net will get 86,000 new paying customers to add to its pool, along with 8,000 Medicare Advantage beneficiaries. Its existing Medi-Cal and Healthy Families business in nine counties, currently with 692,000 beneficiaries, will get a boost of 17,000 new members. In addition, it will add nearly 20,000 members enrolled in the programs in Orange County.

The companies also had a previous agreement in which United Care administered 120,000 of Health Net's Medi-Cal members throughout the state. They will now fully revert to Health Net, which will not affect the company's overall membership of 2.3 million.

The company expects to completely integrate the new members into its own plans within three months. Most members will see no difference in service, though commercial enrollees will be offered additional Health Net products in the future.

The state Department of Managed Health Care approved the deal with the provision that commercial members will see no changes in their benefits for at least the next 18 months. Given that the two companies had a 90 percent overlap in their provider network, John Puente, deputy director of plan and provider resources, said the approval process went smoothly.

"They'd been partners for a long time, doing business together for many years, so there was a lot of overlap already," Puente said.

"This is essentially just the changing of the names on people's ID cards."

Health Net shares slipped 67 cents, or 1.32 percent, to close at $50.15 on Monday.

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Source: Daily News - Los Angeles, California

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