On Friday, Humana Inc. (HUM) announced a deal to acquire California-based MD Care for an undisclosed amount. The deal is expected to close by the end of the year, after obtaining approval from both state and federal regulatory bodies.
MD Care is a three-year old privately-held health maintenance organization that operates in four southern-Californian counties, namely Los Angeles, Orange, San Bernardino and Riverside. It provides the Medicare Advantage medical plan, prescription drug plan and special needs plan to about 15,000 members.
The deal is not expected to significantly affect Humana’s 2011 earnings. MD Care generated revenues of $155 million in 2010, while Humana generated $33.9 billion in the same year.
Humana is one of the leading Medicare providers in the US and has been rapidly expanding its Medicare business through acquisitions as well as workforce expansion. On September 14, 2011, the company had announced its plans of adding 200 new full-time employees at the company’s National Medicare service center in Louisville, a majority of which will be working at Humana’s Medicare call center as customer care specialists and front-line supervisors.
Last month, the company had announced the purchase of another Medicare Advantage health maintenance organization, Arcadian Management Services, which has members in 15 U.S. states.
Prior to this, in July 2011, Humana had announced its plan to hire 200 full-time employees, including customer care specialists and front-line supervisors, at its national Medicare service operations center in Tampa Bay.
Humana is a leader in the insurance and healthcare industry, which has other major players like CIGNA Corporation (CI), Aetna Inc. (AET) and UnitedHealth Group Inc. (UNH). The company currently carries a Zacks #1 Rank, which translates into a Strong Buy rating for the near term.
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