Published in Health Care

Priority Health bolsters SE Michigan presence with acquisition of Total Health Care

BY Wednesday, August 28, 2019 04:28pm

GRAND RAPIDS — Priority Health would expand its market presence in Southeast Michigan with the acquisition of Detroit-based HMO Total Health Care Inc.

The two health plans announced plans this afternoon to join together. The deal should close in early 2020, pending approval by state regulators.

Priority Health President and CEO Joan Budden COURTESY PHOTO

Terms of the deal were undisclosed, although the Grand Rapids-based Priority Health agreed to establish a $25 million foundation to support health initiatives in the Detroit area.

“I have a great deal of respect for the leadership team at Total Health Care and the business that they have built,” Priority Health President and CEO Joan Budden said in a statement. “Throughout my long career in the region and as a Detroit native, I’ve seen first-hand their passion for serving their members and their commitment to the Detroit community.”

Priority Health first entered the Detroit-area market more than a decade ago with the acquisition of the former CareChoices HMO from Trinity Health

Between its two health plans, Total Health Care had more than 92,000 members in Wayne, Oakland, Macomb, Genesee and portions of Monroe County as of June 30 who were enrolled in individual, group and Medicaid HMO policies. Total Health Care’s two health plans had combined midyear revenue of $383.5 million and $17.1 million in net income, according to a quarterly financial report filed with state regulators.

“This partnership with Priority Health, one of Michigan’s leading health insurance plans, will provide Total Health Care with additional resources and stability, and allow us to continue to provide our members with the quality care they have come to expect from Total Health Care at a price they can afford,” said Total Health Care CEO Randy Narowitz, who called the deal “a great fit for both companies.”

Priority Health has about 830,000 members statewide across all products lines. Grand Rapids-based health system Spectrum Health owns a 93.9-percent stake in Priority Health. Munson Healthcare in Traverse City owns 5.5 percent and McLaren Northern Michigan in Petoskey owns a 0.6-percent stake.

As of midyear, Priority Health’s commercial HMO business had 537,575 members with total revenue of $1.70 billion and $116.7 million in net income, according to quarterly report to the state. The Medicaid HMO Priority Health Choice Inc. had 118,742 members with $203.7 million in total revenue through the first six months of 2019 and $16.8 million in net income.

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