Healthy Palm Beaches sold its Medicaid HMO business, with about 11,500 members, to Molina Healthcare.

The Long Beach, Calif.-based health insurer (NYSE: MOH) paid $7.5 million for the acquisition, said Thomas Cleare, chief program officer at the Health Care District of Palm Beach County. The district owns Healthy Palm Beaches, which retained ownership of its Vita Health plans for individuals and families.

“The combination of Healthy Palm Beaches and Molina Healthcare of Florida’s existing Palm Beach County membership confirms our commitment to Palm Beach County,” said David Pollack, president of Molina Healthcare of Florida, in a news release. “We are well-prepared to care for these additional members as Florida’s new Managed Medical Assistance program rolls out.”

Florida is putting most Medicaid beneficiaries into HMOs this year.

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Cleare said the district decided to divest its Medicaid HMO because the new state program requires any Medicaid HMO operating in Palm Beach County to also cover several neighboring counties and it wasn’t willing to do that. The proceeds from the sale will support the district’s remaining programs, he said.

“Our current programs that serve low income operations have been growing over the past year and this revenue will help to fund that growth,” Cleare said.

He does not expect major staff reductions as a result of the sale.

Healthy Palm Beaches lost $1.9 million on premiums of $51.2 million in 2013, according to the Florida Office of Insurance Regulation. Of that, $23.7 million in premiums came from its individual and family plans and $27.7 million came from its Medicaid plans. It had 13,217 members in its individual and family plans and 14,069 members in its Medicaid plans on Dec. 31.

Molina Healthcare of Florida lost $5.6 million on premiums of $264.9 million. It had 84,924 members in its Medicaid plans, including 13,096 in Palm Beach County. It also offers individual plans through the Affordable Care Act’s insurance exchange program.

Molina owns health clinics in Riviera Beach and West Palm Beach.

By: Brian Bandell
South Florida Business Journal