Pennsylvania regulators have approved Highmark Health’s deal to become the sole owner of Gateway Health, instantly expanding Highmark’s insurance rolls by more than 350,000 members.
“This acquisition will help us further our mission and better serve current and future Medicaid and Medicare members across Pennsylvania,” Deborah Rice-Johnson, president of Highmark Health Plan, said in a statement.
The deal grows the Downtown Pittsburgh-headquartered nonprofit health giant’s insurance arm from 6 million to 6.355 million members, a roughly 6% increase.
Gateway offers Medicaid, Medicare and dual-eligible coverage across Pennsylvania. Insurance products offered under Gateway now will be branded Blue Cross/Blue Shield under the trade name “Highmark Wholecare.”
Highmark had owned 50% of Gateway for nearly three decades before striking a deal with Livonia, Mich.-based Trinity Health subsidiary Mercy Health to acquire full ownership.
“Through our Medicaid and Medicare programs, Gateway Health has long focused on coordinating health care that goes beyond doctors and medicine to deliver whole-person care,” said Karen Hanlon, chief operating officer of Highmark Health and interim CEO of Gateway Health. “With this agreement, we can now fully leverage Highmark’s innovative ‘Living Health’ model to deliver a more coordinated, personalized, technology-enabled experience for our members.”
Highmark and Trinity submitted the proposed agreement they inked to the Pennsylvania Insurance Department in July. The deal’s financial terms were not disclosed.
Highmark officials said the transaction was completed as of Monday.
A spokesperson for the Pennsylvania Insurance Department could not immediately be reached.
The transition is not expected to lead to any layoffs or eliminations of employee positions, according to Highmark spokesman Aaron Billger. Gateway will continue to operate with existing employees as an independently operated, wholly owned subsidiary under the Highmark corporate umbrella, though a new board will be appointed to oversee it.
“Service to Gateway members, participating health care professionals and key partners will remain unchanged,” Billger told the Tribune-Review earlier this year.
The search continues for Gateway’s next chief executive.
Hanlon has been serving as interim CEO of Gateway Health since the recent departure of former Gateway CEO Cain Hayes. Hayes was hired in June as CEO of the Massachusetts-based Harvard Pilgrim Health Care and Tufts Health Plan.
Highmark also has been growing its reach across New York, Delaware and West Virginia.
Its insurance arm added more than 500,000 members when it merged with Blue Cross of Northeastern Pennsylvania in 2015.
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