BUSINESS

New York HMO buys for-profit insurer in Connecticut

HIP Health Plan of New York says it will remain nonprofit when it buys for-profit ConnectiCare -- at least for now.

By Robert Kazel, AMNews staff. July 12, 2004.

The biggest HMO in the New York City area, HIP Health Plan of New York, is setting the stage for a regional expansion by buying a large Connecticut managed care network, ConnectiCare.

HIP, a nonprofit plan with more than 1 million subscribers and more than 22,000 doctors and other medical professionals, announced June 23 that it planned to buy Farmington, Conn.-based ConnectiCare, a privately held insurer. ConnectiCare has 270,000 members and 14,000 physicians and other health care professionals in its networks.

Details of the proposed deal, which is contingent on regulatory approvals, were not released.

ConnectiCare operates in its home state as well as portions of Massachusetts, and in the past two years also has tried to attract businesses in New York's suburbs in Westchester, Rockland, Putnam and Orange counties, said Deborah Hoyt, ConnectiCare spokeswoman.

HIP primarily serves Medicare and Medicaid patients, union members and employees of municipalities, while ConnectiCare is especially strong in the small business market, Hoyt said. So the two payers see their ability to attract plan sponsors as complementary.

"It's good synergy," Hoyt said. "I think we make a good fit. It's not like they're going to just buy ConnectiCare and dismantle it."

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