Health Net to sell its East Coast operations
Woodland Hills-based Health Net Inc. announced plans Monday to sell its Northeast U.S. health insurance operations to UnitedHealth Group Inc. for about $510 million.
UnitedHealth, the country’s largest commercial health insurer, will pick up Health Net’s 578,000 members in Connecticut, New York and New Jersey. This year’s operations are expected to generate about $2.7 billion in revenue.
In a statement, Health Net Chief Executive Jay Gellert said the deal would enable the company to concentrate its efforts on health plans in the Western U.S.
“We determined that there are greater synergistic opportunities among our three Western health plans than we originally thought,” he said.
The companies said they expected to close the deal within 12 months, pending federal and state regulatory review.
The deal comes on the heels of the U.S. Defense Department’s July 13 decision to award its $2.8-billion annual military healthcare contract to Aetna Inc. instead of Health Net. The contract, which Health Net has held since 1996, covers millions of retired and active-duty military personnel in 20 East Coast and Midwest states.
Health Net covers about 6.7 million people through its commercial and military-related programs.
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