MemberHealth fetches big price in deal


By SHANNON MORTLAND

 

9:28 am, May 8, 2007

 

Solon-based MemberHealth Inc. is being acquired by Universal American Financial Corp. for $630 million.

Universal American, a health and life insurance holding company in Rye Brook, N.Y., will pay 55% of the purchase price in cash and the rest in Universal American common stock, which is valued at $20 a share. The deal is expected to close late in the third quarter.

MemberHealth has grown significantly in the last two years after it was selected by the federal government to provide prescription drug coverage to senior citizens under the Medicare Part D program. The company covers more than 1.1 million people in its prescription drug coverage plans and had net sales of $1.24 billion last year.

MemberHealth and Universal American together will create new programs that aim to keep seniors healthy by focusing on prevention, wellness and taking medicines correctly.

“Both MemberHealth and Universal American share the philosophy of keeping seniors healthy and have programs to support such initiatives,” said Charles Hallberg, president and CEO of MemberHealth, in a statement. “That’s what made Universal American an attractive partner for us. They strongly believe in empowering physicians and pharmacists in health care decisions.”



The acquisition of MemberHealth will enable Universal American to expand its Medicare Part D business and to provide more access to community pharmacists, said Richard Barasch, chairman and CEO of Universal American. MemberHealth and Universal American combined will provide health benefits for more than 2.1 million people.

People currently enrolled in MemberHealth’s CCRx Medicare Part D plans will retain their benefits, premiums, co-payments, network pharmacies, customer service numbers and identification cards. Pharmacies that are part of the MemberHealth network will see no changes in their claims submission procedures, customer service numbers or reimbursement rates.

MemberHealth has 150 employees in Greater Cleveland, but Malissa Bodmann, a company spokeswoman, said the company expects to grow its employee roster due to the sale to Universal American.

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