UnitedHealth Group Inc. plans to acquire privately held XLHealth Corp in the health insurance industry’s latest deal involving Medicare plans for the elderly since rival Cigna Corp. scored a similar coup earlier this month, Reuters reports.
XLHealth, which is owned by private equity firm MatlinPatterson, specializes in plans for Medicare recipients with special needs, including chronic illness, and those low-income beneficiaries who also receive Medicaid government coverage.
The parties did not disclose the deal price, but UnitedHealth said it expected to close the acquisition in the first half of next year and that it would add to earnings.
The deal is similar to Bloomfield-based Cigna’s $3.8 billion acquisition of HealthSpring Inc. earlier this month, which will boost Cigna’s Medicare Advantage business.
Medicare is becoming an increasingly enticing market for U.S. health insurers, as the entry of the postwar baby boom generation into retirement looks to swell the ranks of privately run Medicare Advantage plans.
