Simply Healthcare Holdings, a Coral Gables-based managed care company, has reached an agreement to sell to Anthem Inc., a publicly traded health insurer with headquarters in Indianapolis, for an estimated $1billion.
The two companies confirmed the deal but would not release the final sales price. An industry source with knowledge of the deal valued the purchase at about $1billion.
Founded in 2010, Simply Healthcare covers more than 192,000 Floridians on Medicare and Medicaid in 60 Florida counties through two affiliates, Simply Healthcare Plans and Better Health. It also offers Clear Health Alliance, a Medicaid specialty plan available in Florida for people with HIV/AIDS.
Anthem, formerly known as WellPoint Inc., offers coverage in 26 states. In Florida, it provides coverage through its affiliate Amerigroup, company spokeswoman Kristin Binns said.
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Both companies said policyholders should expect no changes to their health coverage.
Florida’s demographics make it an important healthcare market. Medicare spent about $1.87 billion in South Florida in 2012, according to federal data, and more than 3.6 million Floridians receive Medicaid benefits, according to state figures.
Simply Healthcare’s high profile comes in part from its association with spokesman and basketball legend Earvin “Magic” Johnson, who invests in the company and sits on its board of directors.
Johnson, who announced in 1991 that he had been diagnosed with HIV, is expected to continue in his role as the company’s public face, according to sources at both companies. A representative of Johnson could not be reached for comment.
South Florida serial healthcare entrepreneur Miguel “Mike” Fernandez, whose private investment company MBF Healthcare partners owns a majority stake in Simply Healthcare, said that the sale “validates the quality of the company which management and the Simply team has built.”
Four years ago, Fernandez created Simply Healthcare by combining two other HMOs. At the time, the firm had about 38,000 insured in Miami-Dade and Broward counties, a few dozen employees and 2010 revenues of $38 million. Today, it has more than 202,000 members, serves 60 Florida counties and employs 821 statewide. Its revenues rose to $458 million last year, up from $182 million in 2012, and are expected to reach around $1billion in 2014.
Fernandez said the deal could take as long as five months to clear because it requires regulatory approval from several state and federal agencies, including federal antitrust regulators, the federal Centers for Medicare & Medicaid Services, the Florida Office of Insurance Regulation and the state Agency for Health Care Administration.
Fernandez plans to step down as chairman of Simply Healthcare once the deal closes, he said.
In September, Fernandez’s firm sold Navarro Discount Pharmacy, a drugstore chain with a 50-year-history in Miami-Dade County, to the national giant CVS Caremark. Financial details of that purchase were not released to the public.
Lourdes Rivas, Simply Healthcare’s CEO, said she and the company’s 840 employees would keep their jobs after the sale. “As the leadership teams at both companies get to know each other better in the next few months, then it will be time for us to start thinking about how to best steer the ship,” Rivas said.
This report was supplemented by reporting by Joseph A. Mann Jr.
Follow @MHhealth on Twitter for health news from South Florida and around the nation. This article was produced in collaboration with Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.