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Anthem (ANTM) to Acquire Integra to Enhance Medicaid Business

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  • ANTM
  • MOH
  • CNC
  • HUM

Anthem, Inc. ANTM recently entered into an agreement to buy Integra Managed Care from a wholly-owned indirect unit of Personal Touch Holding Corporation. Once the deal is closed, Integra will join Anthem’s Government Business Division. This move is in line with ANTM’s goal to enrich its Medicaid business portfolio.

Integra Managed Care, a Managed Long-Term Care Plan in New York, enables individuals with long-term care requirements to live comfortably and safely in their own homes. Currently serving 40,000 Medicaid members and providing government-sponsored coverage for long-term care, Integra focuses on delivering the best care to adults so that they experience better health outcomes.

Subject to certain closing conditions, the deal is expected to close by the end of the second quarter of 2022. However, financial terms of the buyout were kept under wraps.

Anthem’s Medicaid business remains well-poised for growth on the back of its constant efforts to devise cost-effective health plans, growing membership and contract wins.

The recent move is a well-timed one, considering the ample growth prospects prevalent in the Medicaid market, primarily targeting low-income individuals. The latest economic downturn wherein people witnessed job losses and reduction in income saw more people becoming eligible for Medicaid coverage.

This led to increased Medicaid enrolment. Besides, continuous program expansions across several states can be cited as one of the primary factors driving the Medicaid market growth.

Other healthcare providers boasting a strong Medicaid business across the United States include Humana Inc. HUM, Centene Corporation CNC and Molina Healthcare, Inc MOH.

Humana's Medicaid business has also been contributing to its top line for years now. Revenues from Medicaid and other businesses for HUM increased 6.7% year over year in the first nine months of 2021. The South Carolina plan is also on track, which is expected to go live in 2022.

Centene's Medicaid business is also poised well for growth owing to contract wins and membership growth. CNC's 2020 buyout of WellCare diversified its business by strengthening its scale and adding more than 12 million Medicaid members.

Molina Healthcare's Medicaid business has been contributing to its overall growth for a while. MOH's Medicaid business line is expected to grow on the back of contract wins and strategic initiatives In April 2021, Molina inked a deal to purchase Texas Medicaid and Medicare-Medicaid Plan (MMP) contracts and specific operating assets of Cigna for $60 million in cash.

Shares of Humana, Centene and Molina Healthcare have gained 9.3%, 25% and 42.3% in a year’s time.

Zacks Rank and Price Performance

Shares of this currently Zacks Rank #3 (Hold) company have gained 28.8% in a year’s time, outperforming its industry’s growth of 26%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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