UnitedHealth is joining a number of other major US health insurers that have entered the Medicare Advantage market.
This comes with the announcement that it is to acquire XLHealth, a sponsor of Medicare Advantage health plans with a primary focus on Medicare recipients with special needs, such as those with chronic illness. Terms of the cash deal were not announced.
UnitedHealthcare CEO Gail Boudreaux commented that combining XLHealth’s capabilities in serving high-risk, chronically-ill Medicare beneficiaries with UnitedHealthcare’s Medicare and Medicaid will “significantly enhance” UnitedHealthcare’s ability to serve older Americans.
XLHealth currently serves some 113,000 Medicare Advantage members in Arkansas, Georgia, Maryland, Missouri, South Carolina and Texas, and will expand into Illinois, Indiana, Iowa, New Mexico, New York and Wisconsin in 2012. XLHealth anticipates that it will generate revenue of more than $2bn in 2012.
UnitedHealth’s acquisition of XLHealth follows closely on the heels of rival Cigna Corporation’s announcement in October that it had made a successful cash offer of $3.8bn for Medicare Advantage firm HealthSpring which has about 340,000 Medicare Advantage members.