Health Net to Acquire Universal Care

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Health Net Inc. on Thursday said it agreed to acquire the health plan assets of Long Beach-based health care company Universal Care Inc., in a move that further consolidates managed-care insurers in the California market.


Terms of the acquisition were not disclosed. The transaction, which is contingent upon regulatory approval by the Department of Managed Health Care and the Department of Health Services, is expected to close in the first half of 2006.


As a result of this acquisition, Health Net which already serves approximately 700,000 Medi-Cal and Healthy Families beneficiaries in nine California counties will add approximately 20,000 Medi-Cal and Healthy Families beneficiaries. Upon closing, Health Net will add about 5,000 Medicare Advantage beneficiaries and approximately 75,000 commercial members that have received coverage through contracts with Universal Care’s health plans. Also, the Woodland Hills-based managed health care company will have the opportunity to enroll an additional 20,000 Medi-Cal and Healthy Families beneficiaries in Orange County.


After the transaction closes, Universal Care will maintain its 10 medical clinics, 12 dental clinics and two vision clinics, and will continue as a provider of care to members Health Net covers under the Medi-Cal, Healthy Families, Medicare Advantage and commercial programs.


Universal, a smaller family-owned and -operated health maintenance organization, has struggled financially in recent years, drawing the attention of state regulators. Meanwhile, it has faced increasingly larger and well-financed competition.


In late December, Minnetonka, Minn.-based UnitedHealth Group Inc. completed its $9 billion purchase of Cypress-based PacifiCare Health Systems Inc. Before the PacifiCare purchase was Indianapolis-based Anthem Inc.’s acquisition of Thousand Oaks-based WellPoint Health Networks in 2004, which created the nation’s largest health insurer.

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