The deal is expected to clear regulatory hurdles, but one observer says "a possible snare going forward is that insurers start to look at Ascension as less of a provider partner and more of an insurer competitor."
Together Health Network, a subsidiary of Ascension Health, has notified the state of Michigan that it plans to buy US Health and Life Insurance Company for $50 million in cash.
Together Health Network is a clinically integrated network that was formed in July 2014 as a collaboration of Ascension Health Michigan, Trinity Health, and physician groups across the state.
USHL, based in Sterling Heights, MI, operates in 20 states and specializes in providing insurance products for small employers. The company is authorized to sell plans under the Patient Protection and Affordable Care Act.
Requests for comment on the deal from St. Louis, MO-based Ascension were not immediately returned.
Allan Baumgarten, a healthcare analyst working in Michigan and throughout the Midwest, says the acquisition is not a surprise.
"There were reports last year that Ascension would acquire an insurer, but the focus then was on large players like WellCare and Centene," Baumgarten said by email.
John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.