Catholic hospital giant buying small health plan
The nation's largest nonprofit health system is quietly getting into the insurance game under the auspices of population health.
Greater St. Louis-based Ascension Health is spending $50 million to acquire U.S. Health and Life Insurance, a Michigan-based for-profit insurer licensed in 20 states, five of which the health system is eying for small group policies in the short-term.
Ascension Care Management LLC, the population health unit of the nation's largest nonprofit and Catholic health system, filed a notice of the acquisition with the Michigan Department of Insurance and Financial Services.
U.S. Health and Life Insurance was previously acquired through U.S. Health Holdings, a benefits-focused LLC founded in 1995 by Anthony Lapiana, a businessman who specialized in insurance for labor unions like the Teamsters (and with alleged though vigorously denied links to the Detroit mafia). Now 73-years-old, Lapiana stands to be a main benefactor of the sale to Ascension, as the shareholder and former director of the holdings company.
U.S. Health and Life Insurance serves around 500 employers, most of them small businesses, and brings in more and $60 million in premiums. Selling PPOs and self-funding services, the company "is consistently profitable," one overview boasted, and offers a more traditional "real-person" experience: "Our telephones are still answered by live operators, we still invite employers and members to visit us in our offices," its website reads.
Ascension Health was long rumored to be mulling a health plan acqusition, with for-profit HMO WellCare even tossed around by analyst Ana Gupte as a possible buy.
Though less expansive than WellCare, in terms of current membership, the acquisition of U.S. Health and Life could offer Ascension a launching pad for a potentially huge health plan and integrated delivery network. The health system operates 130 hospitals in 23 states and provides more than $1 billion charity care.
For now, though, Ascension plans to target its new health plan at small businesses in Illinois, Indiana, Michigan, Ohio and Wisconsin, according to the notice with Michigan regulators.
Dominant insurers in those states could still see a new level of competition, including Blue Cross Blue Shield of Michigan and Blue Cross and Blue Shield of Illinois, each of whom currently have more than 50 percent market share in their respective states.
In Michigan, in particular, Ascension has a formidable potential as the owner of Borgess Health, St. John Providence Health System, Genesys Health System, St. Mary's and St. Joseph's. Ascension also co-owns, with Trinity Health, a physician-led clinically integrated provider group called Together Health Network, which could be solid base for a narrow network health plan sold in Michigan's insurance exchange.
