Minnetonka-based UnitedHealth Group is acquiring a large Medicare Advantage health plan in Louisiana, a state that’s one of the few where the company’s UnitedHealthcare insurance business in 2017 wasn’t already one of the largest in the Medicare market.
UnitedHealthcare, which is the nation’s largest health insurer, said Friday that it’s acquiring Peoples Health, an HMO with about 63,000 enrollees in Medicare health plans that posted $768.3 million in revenue last year, according to a regulatory filing.
Financial terms of the deal were not disclosed.
“Our joining together will lead to an expanded choice of affordable plan options for Louisiana seniors,” UnitedHealth Group said in a statement.
Medicare Advantage health plans are an increasingly popular option for seniors who elect to have their health insurance benefits provided through a private managed-care company.
About one-third of the 61 million people eligible for Medicare select a Medicare Advantage plan, according to a report in March from Mark Farrah Associates, a Pennsylvania-based supplier of market data.
The consulting firm’s report found that UnitedHealth Group in February was the nation’s largest Medicare Advantage company with 5.25 million enrollees, an increase of 13 percent compared with the year-ago period.
Last year, a report from the California-based Kaiser Family Foundation found that UnitedHealth Group was one of the three largest sellers of Medicare Advantage plans in 42 states plus the District of Columbia.
UnitedHealth wasn’t in the top three in terms of market share in Louisiana, where Peoples Health ranked No. 2 last year, according to Kaiser.
Minnesota is another state where UnitedHealth Group isn’t a top seller of Medicare Advantage plans, although the insurer has said it hopes to start selling the coverage here in 2019.
Peoples Health employs 850 people.
The company said nothing will change for current subscribers this year. A UnitedHealth Group spokeswoman said coverage will continue to sell under the Peoples Health brand in 2019.
“Joining with UnitedHealthcare preserves our foundation as a local company with deep ties to Louisiana,” Peoples Health said in a statement.
People who opt for Medicare coverage of both hospital and physician care typically receive those benefits through the traditional government program or a Medicare Advantage plan.
Many of those in original Medicare opt for supplemental coverage that’s sometimes described as a “Medigap” plan.
Mark Farrah Associates reported in May that enrollment in Medicare supplement plans grew by 3.8 percent year-over-year to 13.1 million people as of the end of 2017. UnitedHealthcare, which has long marketed Medigap plans through a partnership with AARP, was the largest seller of Medicare supplement plans with 4.5 million members, according to the report.